Beyond the Boilerplate
Peter R. Moison, J.D. TEP, President
Business Dictionary.Com defines the word “boilerplate” as follows:
Standard legal language (the fine print) used by banks, insurance companies, landlords, service providers, etc., and printed often on the back of common insurance, loan, and tenacy agreements, and bills, invoices, receipts, etc. Boilerplate clauses are drawn from the long legal experience of big firms, normally cannot be negotiated by the client customer.
The emphasis was added for purposes of this article. Boilerplate does have its place but in the high net worth planning market, a one size fits all approach may not be the best approach. Life insurance policies are products: products that use only boilerplate language.
In planning for the high net worth client life insurance must first be utilized as a concept that has the potential to solve many estate and long term planning issues. Only after it is determined how to use the conceptual benefits of life insurance to help solve the planning issues is it time to start drafting the contract of life insurance. Sure there will be some boilerplate language in the contract. There is benefit to using what is proven language but there should also be the ability to go beyond the boilerplate in order to specifically address the planning objectives and issues of the high net client. Here are a few examples of items to consider adding to the contract language that go beyond the boilerplate:
- Coordination with overall long term estate and financial planning
- Coordination with multi-jurisdictional issues for clients who may reside outside the U.S. either permanently or temporarily
- Specific design of death benefit to maximize the same when it is needed the most
- Privacy and protection issues
- Coordination with foreign trust matters where there may be future U.S. beneficiaries
When it comes to the high net worth client a pre-packaged and standardized approach seldom serves the best interest of the client. Only a complete understanding of the planning goals and objectives of the client coupled with advice that is specific to those objectives will create the best plan. To think that the documentation can be drafted in advance is backwards thinking. Backwards thinking is not part of CastleRE.
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