Construction contractors understand that a successful project is possible only when it is properly planned and executed. It is curious, then, that many of them do not employ similar planning in other areas of their lives — especially estate planning.
By their nature, contractors are practical and down-to-earth individuals. Though many are incredibly successful in business, when they hear the term “estate plan” they do not think of themselves or their colleagues in the construction trades. Rather, they think of senior executives at Microsoft or Boeing — high-net-worth people who have multiple homes and massive investment portfolios. It is a misconception typical with many individuals and small-business owners.
When we discuss estate planning with our construction clients, the response is often dismissive, as if to say, “I’m not the kind of hot shot who needs an estate plan.” Too often, our successful construction industry clients could not be more wrong. Our approach is to initiate a face-to-face meeting with the client.
In this meeting, we convey the fact that a successful contractor is responsible not only for his or her own needs and the needs of family, but also for the long-term needs of the company and its employees. A good estate plan achieves these goals — during the owner’s life and after the owner’s retirement, incapacity or death.
How does an estate plan do this? By addressing the use, management, conservation and transfer of assets generated by a well-run construction business; by preserving and protecting assets from creditors, unnecessary taxes and excessive costs; and by using these assets to create a personal or public legacy.
Demystify Estate Planning
Construction business owners are innately smart business people. However, their knowledge base focuses on their industry. Their strategic planning often fails to include a look ahead to the owner’s personal life and the continued success of the business.
Contractors are often visual people. Understanding this is critical to lawyers, who are often word people. Lawyers must find a way to communicate important concepts and lessons. Estate plans may be better presented in a diagram — complete with boxes and arrows — which will be a familiar format to contractors and other business clients. By using a language that builders understand, you immediately reduce any anxiety about the process.
Prior to your first meeting, present the client with a checklist of records that will be discussed when coming up with an estate plan. We find that contractors understand and are comfortable with lists.
Keep It Simple
Construction is governed by contracts and most clients in this industry are well acquainted with contract language. However, they are not familiar with the language used in other legal documents — like those involved in estate planning. All too often, these standard documents are long and crammed with complex jargon. The client won’t want to sign what he can’t understand.
We find that contractors, whose very livelihood is based on the ability to manage the risks and duties prescribed in a legal agreement, express fear of “being taken” by the legal and financial aspects of agreements they do not completely understand.
Our approach is to address this fear by creating custom estate-planning documents that are as brief and jargon-free as possible, while still meeting the requirements of the law.
Give a Cost Estimate
Contractors work in a world where goods are normally delivered for an agreed-upon price. Generally, they do not bill by the hour. As a result, they can have a hard time with a lawyer who proposes an hourly billing arrangement. As far as possible, try to work within the contractor’s mind-frame when it comes to billing.
Usually, an estate planning lawyer will bill for the hours it takes to meet with a client, review relevant financial documents, create the estate plan, draft documents and sign documents.
In order to allay fears and make the contractor-client comfortable, we try to generate a realistic estimate for basic estate planning services (like wills, powers of attorney and healthcare directives).
Contractors like and appreciate the commitment of another professional to name a price and abide by it. When the contractor brings along the documents included in the checklist, the complexity of the tasks (and a price) are relatively easy to determine.
For more sophisticated services, such as trusts, family limited partnerships, limited liability companies or private foundations, we try to present the client with a list of typical fees for preparation of the various kinds of estate planning documents.
We let the client know that the charge for a document will not increase without prior notification, discussion and approval.
Teamwork, Detail and Schedule
Finally, contractors are used to working in teams where the team members play different roles designed to move the project forward and are in constant communication with each other. Use this understanding to explain to a contractor-client how an estate planning team — consisting of a client, a lawyer, an accountant and a financial planner — works together to accomplish a similar goal.
Contractors are used to performance on a set timeframe and immediate communication when something upsets the plan. In order to satisfy a contractor’s need for detail, we provide diagrams, clear documents and timelines of the estate planning process. Just as contractors are rigorous about meeting construction deadlines, they expect their counsel to meet deadlines as well.
When discussing estate planning with contractor-clients, the successful lawyer will use language the clients understand as well as approaches that make the client comfortable.
Too often, contractors fail to appreciate just how much a good estate plan can contribute to the continued success of their businesses. It is a good lawyer’s job to demonstrate that knowledge and to communicate in a way that makes the planning neither onerous nor mysterious.
Adopting the methods and style of the client’s business is an effective way to accomplish those aims.
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Paul A. Tonella grew up in a construction family and focuses his legal practice on estate planning and probate services for businesses owners in the construction industry. He is a partner at Seattle law firm Oles Morrison Rinker & Baker LLP (www.oles.com) — a firm that represents companies in the construction industry. For more information, contact Tonella at 206-623-3427 or tonella@oles.com.
