Insurance Brokers

Insurance brokers often refer clients to professionals specialising in wills and powers of attorney for several important reasons:

Comprehensive financial planning:

Insurance brokers aim to provide holistic financial advice. A crucial aspect of this is ensuring that clients have Wills and powers of attorney in place to protect their assets and wishes in case of incapacity or death.

• Asset Protection: Wills and powers of attorney are essential tools for protecting a client’s assets. A will ensures clients' assets are distributed according to their wishes after death. At the same time, a power of attorney allows a designated person to manage their affairs if they become incapacitated.
• Scenario: Adrian, 45, has a high net worth and wants to ensure his business and personal assets are protected in the short, medium, and long term. As part of the long-term plan, his insurance broker refers him to Fern Wills to draft a will specifically designed to protect business continuity and his family's wealth.
  The will writer sets up a Business Protecting Relief Trust (BPR) to ensure the business is run by preferred individuals and placed in trust so it does not have to pass through probate and is tax efficient. Business Lasting Powers of Attorney (BLPA) are established to protect the decision-making process in case of long-term incapacity. Additionally, a General Power of Attorney (GPA) is put in place to cover project decisions while Adrian oversees his other business.
• Tax Efficiency: Proper estate planning can help minimise taxes on the estate, ensuring that more of the client’s assets go to their intended beneficiaries rather than being lost to taxes.
• Scenario: Brian and Carol, who are retired and have a substantial estate, have worked hard for their money and have paid hundreds of thousands of pounds in taxes. They are reluctant to pay any more. They are referred to Fern Wills, who helps them create a will with tax-efficient strategies, such as gifting and charitable donations. Fern also consults with Carol's accountant & IFA to maximize the effectiveness of these strategies.
• Continuity of Care: For clients with dependents, especially those with special needs, having a will and power of attorney ensures that there is a clear plan for their care and financial support.

• Scenario: Donna, a single parent with a special needs child, was referred to Fern Wills while reviewing her insurance needs. Fern Wills helped Donna set up a Will with Guardianship and a Letter of Wishes. The Letter of Wishes provided specific instructions to the courts and guardians regarding Donna's requests for guardianship. Additionally, a Vulnerable Persons Trust was established to protect assets for Donna's daughter, ensuring they are not subject to means-tested benefits.

Risk Management: 

Brokers help minimise risks related to inadequate estate planning by referring clients to professionals, preventing legal disputes and ensuring clients' wishes are honoured.

• Avoiding Intestate Succession: Without a will, a person’s estate is distributed according to the laws of intestate succession, which may not align with their wishes. This can lead to disputes among heirs and potential legal battles.
• Scenario: The broker is searching for the best health insurance and mortgage protection insurance for Ethan, a divorced 50-year-old man. The insurance broker also discussed nominations for his various other insurance policies. Ethan mentioned that he has no immediate family. He doesn't mind who benefits but is clear about who should not. The insurance broker reminded him that a nomination form could help with insurance outside his estate. Still, intestacy laws dictate that his parents and brothers will inherit first from his estate. The broker introduced Ethan to Fern Wills, who can set up a standard Will for less than £200. The estate will now go to a select few nieces who visit him, and the rest will go to his fishing club, where his friends are. Ethan added a Letter of Wishes to explain his decisions so they are less likely to be challenged.
• Preventing Financial Abuse: A power of attorney can help prevent financial abuse by ensuring that a trusted person is in charge of the client’s financial affairs if they are unable to manage them themselves.
• Scenario: Frank, an elderly wealthy man with declining physical health though moderate mental health is reviewing the nomination forms with his insurance broker. The broker hears faint signs of potential financial abuse. After further investigation, it turns out to be a false alarm, but an actual situation is possible. This is mainly due to Frank's overly agreeable and easy-going nature. The broker refers Frank to Chris, who specialises in setting up Lasting Powers of Attorney for vulnerable adults. Chris at Fern Wills & LPAs provides a full Certificate Provider Service and witnessing in accordance with the Mental Capacity Act of 2005. Chris communicates with all attorneys and relevant individuals and drafts a letter of wishes to ensure Frank's continued protection.
• Healthcare Decisions: A healthcare power of attorney allows a designated person to make medical decisions on behalf of the client, ensuring that their healthcare preferences are respected.
• George, a 38-year-old with a history of medical issues, consults with his broker, who is arranging specific health and travel insurance. The broker identifies problems that may occur if George is temporarily incapacitated due to his condition. George is referred to Fern Wills and LPAs, who arrange a General Power Of Attorney to cover his trip while the lasting Powers of Attorney are being processed.

Client Trust and Satisfaction: 

Offering referrals to trusted legal professionals can enhance the broker’s reputation and strengthen client relationships. Clients appreciate the added value of being connected to reliable experts for their legal needs.

• Added Value: Insurance brokers provide value beyond their primary services by referring clients to estate planning professionals. This can enhance the client’s perception of the broker as a comprehensive advisor.
• Scenario: Hattie is a young professional with preschool-age children seeking comprehensive advice. Her insurance broker helps with her policies and, as part of her future planning, refers her for a Will review.
• Building Relationships: Clients are more likely to trust and remain loyal to brokers who demonstrate a genuine concern for their overall well-being, including their legal and estate planning needs.
• Scenario: Ivan and Julia are married with teenage children. Their insurance broker refers them to Fern Wills, who creates their Wills and guardianship with a discretionary trust for the longer term. This strengthens their confidence in the broker's commitment to their families' well-being.
• Professional Network: Establishing a network of trusted legal professionals can also benefit the broker, as these professionals may reciprocate by referring their clients to the broker for insurance needs.
• Keelan, a high-net-worth individual, takes business insurance from the broker. The broker refers to Fern Wills, demonstrating the broker's professional network and holistic overview, enhancing Keelan's confidence in the broker's service. 

Legal and Ethical Obligations: 

In some cases, brokers may have a duty to ensure that their clients know the importance of having these documents. This is especially true for clients with significant assets or complex family situations.

• Fiduciary Duty: Insurance brokers may demonstrate a fiduciary duty to act in the best interests of their clients. This includes ensuring that clients know the importance of a will and power of attorney.
• Scenario: Lizzie, and wealthy Widow, has significant assets and complex family dynamics. Her broker, fulfilling a fiduciary duty, refers to Fern Wills to ensure her assets are managed and distributed according to her wishes, protecting her interests and those of her heirs.
• Ethical Standards: Adhering to high ethical standards means looking out for the client’s best interests, which includes making sure they have the necessary legal documents to protect themselves and their families.

• Scenario: Michael, a local businessman, tells his broker that his younger brother passed away recently. Michael has adopted children and stepchildren, one of whom has learning support needs. The insurance broker, adhering to ethical standards, refers to Fern Wills, who ensures Michael's wishes estate wishes are complied with, clearly documented, and legally binding.