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Friendly ways to bring estate planning together with clients

None of us like to contemplate our own mortality, and that goes double as paying a qualified attorney to do estate planning. But failing to do so doesn’t delay or deny death—it only makes it more complicated and costly for heirs, who have to sort out the post-mortem mess.

Here are some phrases you can use to inspire customers to get their stories in order—before it’s too late.

“Pay a lawyer a little now, or much later”

Depending on the complexity of the situation, setting up a proper estate plan can cost anywhere from a few hundred to several thousand dollars in legal fees. And unless customers simply pass away soon after the plan is implemented, there may be additional costs to update documents to reflect material changes in customers’ lives, applicable regulations, or both.

But if it is seen as paying for “insurance” then all this unnecessary expense is more tolerable. In this case, spending some time and money now documenting the client’s wishes is insurance that can prevent heirs and executors from having to hire (and pay) attorneys to settle the property in court. , a cost that can easily run into the six digits and last for years.

“Save Family Discord / Argument”

Prolonged emotional disputes over succession can generate resentment and hatred among surviving family members that last much longer than actual legal conflicts.

Even the most stringently written property documents can still be contested; But, the more complete and up-to-date the documents are, the less likely it is that lawyers opposing the plan will take on a case, and the more likely the courts will quickly rule in favor of the decedent’s will.

And if customers have already established their wishes in writing, perhaps disgruntled heirs are more likely to broadcast their displeasure to departed customers, sparing surviving family members.

“Just wanna dot me”

Clients who are hesitant to talk about dying will be more receptive to instinctively going over the beneficiary designations of their investment accounts, just to make sure the nominees are accurate, up-to-date and ones that clients like.

Start with retirement accounts like IRAs and Roth IRAs, but don’t forget about annuities, life insurance policies, and pension payments to survivors. And if you really want to spark clients to dive deeper into the overall estate planning process, point out that the beneficiary designations on these types of accounts usually supersede any language contained in clients’ wills—even if Both are contradictory to each other.

Also, these accounts will not be transferred through probate in the event of death. Therefore, the current documented beneficiary can take possession of the property without the knowledge of the other likely heirs.

“Give now, and maybe later”

You can mitigate the doom and gloom of wills, estates, and death by focusing on how customers want to help their family members, friends, and favorite organizations right now, and then what happens after customers pass away. , see to it.

Once you provide a figure that can be given today, without jeopardizing the financial security of the clients, clients will find that they pay less today than they would simply bequeathing all of their assets at the time of death. can get more pleasure. As part of this conversation, you can ask clients if they would like to earmark some or all of their assets for charity and, if so, discuss what tax benefits may be available to clients, or So now or at the time of death.

“Account for all assets”

A safe way to start an estate planning conversation is to offer to help clients create a simple one- or two-page list of properties and estimated values. Customers can also choose to include account numbers, passwords and contact information for each asset.

This document, although often not legally binding, will not only make the executor’s obligatory task easier but will also ensure that all assets are accounted for during the estate’s settlement.

It may be helpful to prompt clients to state that, depending on the state laws governing their assets, any assets “exempt” during the settlement process can be given to the state government, not the intended heirs. Hopefully, clients will keep the listing with the rest of their estate planning documents. They may also give their attorney, final executor or you an updated version.

“Let’s Cut Some Taxes”

With the current 2022 federal estate tax exemption amount more than $12 million for an individual (and twice that for a married couple), it’s unlikely that estate taxes will be an issue for most of your clients. But there are other taxes that can be levied to reduce or completely avoid your customers (or their heirs) sooner.

Start by deciding whether it’s better to keep clients’ IRAs intact, or convert them to Roth IRAs now to allow higher-income beneficiaries to avoid larger income tax bills. Or leave IRAs to heirs who are likely to be in a lower income tax bracket, and designate non-retirement accounts and other assets for those who will be in the upper income zone.

Finally, the older the client is, the less likely they are to want to sell the highly appreciated property now and pay the associated capital gains tax. Instead, they want to keep the assets until their death, and allow their spouse or children to benefit on a stepped-up cost basis.

“How do you want to be remembered?”

Setting up an estate plan now will save the surviving family members time, money, stress and heartache. And it is a gift that can be worth even more than an inheritance.

Kevin McKinley is the principal/owner of McKinley Money LLC, an independent registered investment advisor. He . is also the author of Make your child a millionaire (Simon & Schuster).

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