My custom-designed asset protection and estate plans save you money because you get exactly what you need and you don’t pay for things you don’t want.

by J.L. Siefers, Jr.
Asset Protection and Estate Planning Attorney

No one likes misunderstandings about fees. These misunderstandings can be the source hard feelings and embarrassment for both the lawyer and the client.

I discuss fees openly and honestly, before you hire me, so you have a clear understanding of the investment needed to protect your assets and your family. Over the years, clients have told me they like to learn about fees in advance. Plus, I know they like the opportunity to ask questions before they make an important commitment. So here’s how I handle the subject of fees.

What will my estate plan cost?

Every client asks this question and every client deserves a straight answer.

Most lawyers answer this question in one of two ways. The first group says, I’ll quote a fee after we discuss your estate plan in detail. This doesn’t tell you much. The second group says, An estate plan for a single person is $900. An estate plan for a married couple is $1400. And while this satisfies some folks, often it’s not accurate because most people’s estates don’t fit into one of these two neat little boxes.

Here’s what often happens: Lawyers design basic estate plans to include the documents most people need. If you’re single, you get package A. If you’re married, you get package B. Some people pay the package price, and get the package of documents, even though that package may not provide exactly what they need. (If you know two people who bought the same estate plan, you can be sure neither of them got exactly what they needed, and at least one of them paid for documents he didn’t want.)

In other cases, lawyers start by giving you a low-ball fee. Then they add... and add... to your plan until you get what you want. As a result, the basic plan that you thought would cost $900 or $1400 might cost $3,000 or $5,000 by the time the lawyer finishes adding up the costs on his calculator.

In this case, you might think it’s like the car you see advertised on TV for $9,999. When you go to the dealer, you discover that the $9,999 price includes the engine and not much else. If you want a steering wheel, tires and seats, then it’s $17,999. If you want windshield wipers and a trunk, it’s $21,999.

And then even if you don’t want this stuff the dealer adds electric seats, power windows, driver’s seat warmer, electric trunk latch, extra-shiny sparkle paint, polished chrome wheels, upgraded tires, and an electronic/computer/laser/digital/stereo/wave sound system with speakers under the hood so you can listen to your favorite music while you change your oil. For these gadgets, the dealer wants another $18,000. Then the salesperson says, You can buy this car today for only $39,999. Tax, license and registration not included. Have you ever heard anything like this before? I know I have.

So which car do you buy? You don’t want the $9,999 car because it doesn’t provide what you need. And you don’t want the $39,999 car because it costs much more than the TV commercial led you to believe.

The same is true with your asset protection and estate plan. Either you choose the package at the fee you want, but then discover that the package doesn’t fit your needs. Or, you choose the customized estate plan and then discover that the lawyer charges you triple what you expected to pay. Neither are good results.

Here’s what should happen: First, you should get the estate plan that perfectly fits your family, protects your assets, provides for your spouse and children, and does everything you want it to do. Second, you should pay only the exact amount you were quoted, without any additional costs or fees. And third, you should have a good idea what the lawyer charges before you meet for your initial discussion.

The Indiana State Bar’s ethical rules for lawyers require that lawyers base their fees on a number of criteria, including (1) the time required do the work, (2) whether the work is routine or complex, (3) the urgency of the project, (4) the results obtained, and (5) the lawyer’s skill.

Suppose you are a home builder and someone comes up to you and asks, What does a house cost? You respond, It depends on what you want. A custom home or a tract home? A Spanish tile roof or shingles? Top-rated insulation or the bare minimum? With or without a swimming pool? And so on.

In the same way, the cost of your estate plan depends on what you want. Consider this example:

Couple A and Couple B are next-door neighbors. They attend the same church and shop at the same stores. They both drive late model Cadillac’s. Each couple has an estate valued at roughly $500,000.

Now, here’s my question for you: If I design an estate plan for Couple A and Couple B, will their estate plans be similar? Based on what you know, you would probably say, Yes, their plans will be similar.

Here is what I discovered when I met with each couple:

Couple A: The couple are retired and live off the husband’s pension. They have been married 43 years and have three grown children. Their house is paid for, and they have a few CDs, but no other assets.

Instructions: When one spouse dies, they want to leave their assets to the surviving spouse. On the death of the second spouse, they want their estate to go to their three children in equal shares.

Couple B: The couple own a business with another couple. They have been married 8 years. They have four children from previous marriages and one child together, who has special needs. The wife inherited $50,000, which is her separate property. Each couple owns life insurance with the other couple as beneficiary. If either spouse dies, the remaining couple can buy the surviving spouse’s share of the business.

Instructions: When the wife dies, she wants her money to go to charity. Regarding their joint assets, the couple wants to give each child $20,000 on the child’s wedding day, and $20,000 on their 10th anniversary. They want their special needs child to receive care for life. Upon their death, if their older son gets out of prison, he gets dad’s travel trailer. Their older daughter gets mom’s doll collection. The younger son receives dad’s golf clubs. And the younger daughter gets mom’s antique clock. What’s left in the estate is then divided equally among the children, after caring for the child with special needs.

Summary: The couple’s homes look alike. Their cars look alike. Their assets have similar value. But their estate plans are completely different because their circumstances and needs are completely different.

Lesson: People can look pretty much the same even to the point of having estates of equal value. But their estate plans could be vastly different in both complexity and cost.

When a lawyer offers a package price, you can be sure all his clients get pretty much the same thing, regardless of whether they want it or need it. And if the lawyer is willing to customize the plan and provide better service, some of his clients pay a much higher fee than they expected to pay.

I know that people don’t like financial surprises. During our meeting, as I learn more about your family’s needs, I’ll explain the best way to protect your family. Together, you and I will build your custom asset protection and estate plan exactly the way you want it. When we’re done, I’ll quote your fee to the penny. If it falls outside this range and this is rare it will be because we discovered important issues that we didn’t anticipate but still need to address to protect your assets and your family.

To give you an idea of what increases the complexity of estate plans and often increases the fee here are subjects that your custom asset protection and estate plan should address:

Do you and your spouse have unequal estates? Is this a second marriage for either spouse? Do you have children from a previous marriage? Does any child or spouse have special needs, such as a mental or physical disability? Does any child or spouse have problems with drugs or alcohol? Does your estate include issues that relate to retirement planning? Do you have a taxable estate valued at between $650,000 and $1,300,000? Do you have a taxable estate valued at over $1,300,000? Does your estate include any generation-skipping issues? (They could result in additional taxes up to 55% if not properly designed into your estate plan.) Does either spouse want to control the distribution of what is left to the survivor after his or her death? (If so, this requires a QTIP trust.) Do you need to adjust your estate plan so you can receive government benefits for a spouse or handicapped child? Do you need to do Medicaid planning so your estate qualifies for government benefits? Are you self employed? Will we set up a business succession plan along with your estate plan? Do you need a life insurance trust? Are you interested in educating your heirs, which you can do through the use of an education trust? Do you want to provide for the care of your pets? Do you want to protect your assets for your heirs and keep them away from the IRS, creditors, and future ex-spouses? Do you want to safeguard your assets so they are not wasted due to someone’s inexperience? Do you want to leave money to a charity? (If so, you might benefit from a charitable trust.) Do you have an unusual plan for distributing assets to your heirs? Is your distribution plan built on multiple contingencies. (For example, if this happens, this I want this to happen. If this doesn’t happen, they I want this to happen.) And so on.

The more of these factors that are present, the more complex your estate plan. And, understandably, the more time and skill your lawyer needs to make sure everything is handled correctly. As you can see, the size of the estate doesn’t matter. But the size of the estate often causes more of these factors to be present.

Your lawyer needs an extremely high level of knowledge, skill and experience to examine each issue and create the plan that best addresses these important subjects. Not surprisingly, most people including insurance agents, investment advisors, financial planners, and many lawyers don’t understand these key issues. And, in fact, often, they don’t even know the right questions to ask!

One example of terrible planning is when people try to provide for a child with special needs. Believe it or not, some lawyers suggest that the best thing you can do is to disinherit the child to avoid disqualifying the child from government benefits.

But the truth is, you have a much better option, and it’s relatively easy. You simply set up a trust that provides the extras you want the child to have. The trust does not disqualify the child from receiving government aid. The worst result is when the parents and their lawyer try to help the child and, without realizing it, inadvertently disqualify the child so he receives no government aid at all.

Other examples of poor planning abound:

For example, statistics prove that 98% of people who receive life insurance proceeds do not have any of the money left just two years after they received the funds. You can prevent this problem by explaining in your estate plan how, when and to whom you want insurance proceeds paid.

Other events can also make a dramatic impact on your assets and your family. They include disability, illness, divorce, remarriage, blended families, lawsuits, creditors and bankruptcy. You and your lawyer can address all these situations, and more, in a carefully designed asset protection and estate plan.

As you consider whom you will hire to set up your estate plan, keep in mind...

J.L. Siefers' Seven Laws of Estate Planning

Law #1: At best, you get what you pay for. You never get more than you pay for. And you often get much less.

Law #2: If you have your estate plan prepared by anyone other than an estate planning lawyer, you deserve what you get.

Law #3: If the lawyer’s low fee looks good to you, he probably left something out.

Law #4: If you decide not to spend over $1000 on your estate plan, you should buy a book for $29.95. Because when you discover that your estate plan doesn’t work, you’ll be much happier if you’ve wasted only $29.95 than if you had wasted $1000.

Law #5: You’ll never know how good your estate plan really is until you are disabled or dead. And then it’s too late.

Law #6: The people who will most appreciate the money you invest in your asset protection and estate plan are your spouse and children. It’s the greatest gift you can give your family.

Law #7: If you think hiring a skilled estate planning lawyer is expensive, wait until your spouse and heirs pay the costs of not hiring one: Estate taxes, probate, quarrels, guardianships, conservatorships, unintentional disinheriting, problems with joint tenancy, and more. Hiring a skilled, experienced estate planning lawyer is the best investment you’ll ever make.