The society around us is governed by law and order. There are certain rules and regulations with which we govern our lives as well. These laws play an important role in protecting us from any legal action that has the potential to drain a significant amount from our finances. Before engaging in taking any sensitive decision if a legal document is not provided for the same, then it’s our responsibility to ask for one.
A lot of us don’t focus much on the pre-drafting process of a legal document which can definitely pose as a potential financial risk factor. This is because most people usually don’t emphasize much on any long term implication of the legal deal or the legal document. In fact if a legal document is framed strongly, the chances of it backfiring on you in any unpredictable or untoward incident are minimal.
Below are five points to remember while framing a legal document:
- How will your legal document be impacted if you are no more?
- In case you become disabled, how will it impact the whole process and the relationship of that legal document?
- In case you’ll be facing a chronic illness or any situation that puts you into a challenging situation, then how does this legal document take care of that?
- In case you’re facing a problem where your goodwill is at stake, how will this legal document contribute in minimising the risk eg: risk of any default payments etc.
- While you’re still alive are you clear with the terms and conditions with the people surrounding you?
Upon knowing what things are to be kept in mind while framing a legal document, it is but a must that one should also know which legal documents are to focus upon:
- Do you have a proper contract or legal document between you and your employee?
- Do you have an absolute legal document between you and your landlord?
- Do you have an absolute legal document for your life (i:e; your will statement) in case of any untoward incident occurs?
- Do you have an absolute legal document with all the vendors that you deal with through your organisation whereby what relationship will these vendors share with the organisation if something happens to you is ascertained or taken care of too or not?
- Do you have an absolute legal document with all your clients, customers whereby you have a clear relationship between service timeline, the products and services you’re going to deal with and in case of your absence whom the client is going to speak with and how this money transaction going to take place.
- Do you have an absolute legal document between you and your Chartered Accountant?
- Do you have an absolute legal document with all those agencies that you hire for your business commitments?
These legal documents among others serve the purpose of acting as a safety valve especially for your financial health. The stronger the legal document, the lesser the chances of you facing any unfavourable legal risk.
You need to focus on all areas of life where you share a sensitive relationship and draft you legal agreement accordingly. Your legal documents should also take into account your tax laws as well. Therefore have amazing contracting systems, surround yourself with the right and the best tax planners, financial consultants, estate planners, lawyers and the tribe who never settles with the statement, “it’s okay” but instead work towards getting everything right and strong.