Offering estate planning services can also be a powerful strategy for forging a network of professionals for generating client referrals.

The need to retain deceased clients’ beneficiaries as clients shouldn’t be downplayed. Indeed, many planners frequently fail to become advisors for widows of deceased clients, which can lead to a substantial loss of assets under management. Simply offering estate planning services, however, isn’t sufficient for capturing beneficiaries as clients.

Rather, advisors need to develop a comprehensive and detailed strategy for ensuring that beneficiaries will turn to them for advice. As part of the process, advisors should work closely with their clients and their clients’ beneficiaries when forging estate plans.

The term financial planning can be ambiguous. Broadly speaking, it involves making plans to minimize taxes that may exist when a client’s assets are transferred to beneficiaries. It also involves making sure that adequate measures have been taken, such as creating wills, to ensure that a client’s plans for the distribution of assets can occur with minimal complications.

Financial planning can also involve the use of life insurance, which can be used for generating cash to pay taxes or for providing beneficiaries with cash in lieu of income that clients, who were the family breadwinners, may have been earning.

Annuities may also be used to defer the start of income payments or to provide guaranteed payments over a specified time period. In many instances, trusts are created to control the timing of the distribution of assets and the income that assets may generate. Trusts can also be used to protect assets when beneficiaries have special medical needs that can require costly healthcare services. During the planning process, advisors frequently work closely with insurance agents and estate planning attorneys which can result in an expanded network of professionals for generating referrals.

When undertaking estate planning, advisors should ensure that clients’ beneficiaries are involved in the process after asking their clients if they are willing to share the information. Advisors should emphasize to their clients that involving beneficiaries in estate planning can help streamline the process.

Clients, of course, are the primary decision makers when establishing estate plans. Yet, by involving clients’ spouses, relatives, or other interested parties in the process, advisors can start to generate trust with beneficiaries that can increase the likelihood of the individuals becoming clients.

When working with beneficiaries, the primary objective should be to provide education. The goal is that beneficiaries should understand that an advisor has taken great care to ensure that the estate plan will make the eventual transfer of wealth as simple as possible while facing only minimal taxes.

Estates often require substantial amounts of cash for various requirements, such as paying taxes, maintaining real estate, and hiring professionals such as appraisers or tax preparers. Therefore, advisors should explain provisions that they have made for such needs. In another example, a married couple may want to use the joint tenancy form of ownership for their home.

With joint tenancy, the husband and wife will each own an equal portion of the home. Upon the death of one member of the couple, the surviving spouse will automatically receive full ownership of the house. The form of ownership can play a big role in simplifying the transfer of home ownership.

As part of educating clients’ beneficiaries, advisors should also provide illustrations that show how financial planning will limit taxes that will occur when assets are transferred from an estate to individuals. The illustrations should be customized to illustrate the expected amount of money that will be saved as a result of estate planning.

In some cases, the use of a special needs trust may be warranted. Such trusts protect assets from medical creditors, which can be important when beneficiaries have health issues that require costly care. As with other aspects of estate plans, the provisions of special needs trusts should be explained to beneficiaries so that they will understand that great care has been exercised in protecting assets that would otherwise be used to pay medical bills.

After the death of client, advisors need to be ready to reach out to beneficiaries and offer to help them with the process of settling the deceased’s estates. In the process, advisors should be ready to ask beneficiaries if they are interested in becoming clients.