At a local meeting on health care financing, a lawyer neighbor of mine, “Sam,” offered a free half-hour consultation on estate planning at the large law firm on whose staff he serves.
Being hopelessly naïve, and forgetting the rule “there is no such thing as a free lunch,” I signed up, also thinking I’d be doing him a favor as he’d get a little credit from his colleagues for having gotten an enrollee.
A few days before the consultation, a six-page questionnaire came from the firm, seeking lots of information, some of which I did not bother to ferret out and some of which was useful to me.
Mildly alarmed at the formality and complexity of the request, I filled out the form partially and brought it to the appointment, wondering whether all this was needed for a simple review of our estate planning.
Sam and I met in the firm’s large, handsome meeting room; we occupied a small fraction of the giant central table. His secretary made copies of my back-up material and left us to explore my plans.
Most of the free half-hour was consumed in Sam’s reading my material and asking me questions. Toward the end, he mentioned that any time over the half-hour would be billed to me at $300 per hour, six times what I made when I retired as a scientist 15 years ago. I indicated we’d have to wrap this up in an additional half-hour or less, as the free consultation was going to cost me more than I had expected. And so we did, with my free consultation costing us $150.
Our wills and our Power of Attorney forms were in good shape, and the trust fund for Tina, my beloved, disabled wife was appropriate. We did not make plans to minimize our marital net worth to qualify for Medicaid subsidies, as a philosophical position (we are not really the deserving poor) and a prudential one (you end up giving other people control over your finances).
What we did do, and what I advise our readers to do, is to assure that our assets became held in joint ownership or with the spousal partner named as the beneficiary, thus passing upon death to the other spouse without charge.
Our home is jointly owned, as are most of our investments. However, several investments, totaling over $200,000, were in my name only, without a designated beneficiary. As advised by the lawyer, adding Tina’s name as beneficiary only required a few calls and filling out a few short forms. Furthermore, the search of our financial records also turned up a stock certificate we’d forgotten about.
Where we live, a lawyer gets 5% of the estate as executor, which means $10,000 on $200,000 in investments that are not jointly owned or have a named beneficiary. Avoiding this, for my $150 “free” consultation, turned this lemon into lemonade.
There is no such thing as a free lunch, although occasionally you can find a diamond in the tuna salad sandwich… or take home a lemon and make lemonade.
Have you checked your financial assets to be sure you have the correct owners and beneficiaries? Have you been charged for “free” advice? What financial lemons have you made into lemonade? Please join the conversation.