Legal matters, business strategy, and life perspectives from the mind of a non-attorney.
For the record, I am not an attorney.
I did not go to Law School. The extent of my legal experience is the handful of general “Business Law” courses that were required to graduate with a BS in Finance from my alma-mater UW-Green Bay. When I joined Epiphany Law, I honestly didn’t know the true difference between a TRUST and a WILL… Good thing they didn’t ask me to explain it in my interview… It begs the question though, if I have no legal background, what the hell am I doing working for one of the top law firms in the Fox Valley? No idea. The boss, Kevin Eismann, regularly introduces me to others as “a really smart guy”. I don’t think he even knows what I do here.
I was hired on at Epiphany as a “Project Specialist”, helping to enhance a program called Exit Planning. Exit Planning is all about helping business owners transition out of their business on favorable terms. It has become a great passion of mine – but that’s a topic for another time. In addition to Exit Planning, I assist attorneys in drafting legal documents, help out with marketing projects, and generally find ways to make our company more efficient.
All of that backstory helps me to arrive at this point: When our Marketing Director asked me to start a weekly blog, it was only natural for me to want to do it with a twist; “I’ll do the blogs if I can speak ‘normal person’ language.”
Why? 1) I think readers will appreciate it 2) It’s honestly a way for me to vent thoughts that I don’t get to during the course of the week (a bunch of people with legal backgrounds don’t exactly share my sentiments.)
Example: When I figured out the difference between a will and a trust, I was like, “That’s it? Wow, I thought it was going to be way more complicated.” As I’ve come to find out, such is the nature of much of the legal system: Out-dated vocabulary, over-description, and run-on sentences. Check out this “short” excerpt from a basic Buy-Sell agreement:
“In the absence of written consent and if the Transferor still desires to Transfer all or any portion of his or her Ownership Interest, the Transferor shall offer in writing to sell the Ownership Interest to the Company at the lesser of the price set forth in the Request or the price determined in accordance with the purchase price provisions of this Agreement (the “Lesser Price”).”
Want to know what this means in “normal person” language? If one owner wants to sell his portion of the company, he can ask the other owners to buy it, but they don’t have to pay more than whatever price is listed in the buy-sell agreement.
To be fair, many professions overcomplicate things with industry jargon that nobody understands. Doctors, Financial Advisors, Accountants, and many others are all guilty at times.
I want to make this abundantly clear: The purpose of this or any future post does not serve to discredit the work of the many brilliant legal minds around the world. Their contribution to society is absolutely vital. This blog humbly serves to help the rest of us understand what the hell you people are talking about.
Here’s the deal: I’m committed to writing content that is relevant, light-hearted, and accurate without being… how do you say it… DRY AF. In exchange, you agree to do (2) things for me: 1) Like and Share the post if it was worth your time to read (mostly because it makes me feel good inside); 2) Give one of our attorneys a shout the next time you need some sage legal advice. If you want, tell them Kelton sent you in, maybe they’ll give you the ‘ole “friends and family discount” that doesn’t actually exist. It’s worth a shot.
ON TO THE CONTENT!
Here are a handful of common legal terms, defined:
Power of Attorney: It’s a document that allows someone else to legally make decisions on your behalf. It’s not just for woefully indecisive people who need someone else to tell them what to do – although maybe we should start marketing it that way… … … I digress. POA’s are generally valuable in the event that you literally cannot make decisions for yourself anymore – you could be in a coma or other mentally absent state. You could get a general POA if you trust the same person to handle all of your affairs, OR several – more specific – POA’s if you want to choose different people to handle different things (your health, your business, your assets, etc.)
Estate: Simple. It’s everything that you own. For you: Your house, your car, your money, your family cottage, your land, etc. For me…. Eh. Let’s not go there.
Will: It’s a document that directs who your assets go to once you die. If I may be so bold, it’s instructions to the court for distributing your estate. Some people write them on napkins (not recommended). Most people avoid them because they don’t want to think about dying (also not recommended). As an ode to my favorite fantasy football analyst, Matthew Berry, only (3) things are guaranteed: Death, Taxes, and Aaron Rodgers at home (#GoPackGo). My point: Death is undefeated, people, and a will is the basic equivalent of wearing underwear to your funeral. If you don’t do it, you just look like an ass.
Trust: Think of it like a special basket. This basket is created by an attorney for you to put assets in. When you die, the basket will be delivered directly to whoever you said it should go to. You might think, “Well that’s pointless, I can do the same thing with a will, can’t I?” Not exactly. (2) Things to know: 1) The legitimacy of a will must be verified by a court of law (which costs money and can be stressful) 2) When a will is verified by a court of law, everything in your estate becomes public record. Trusts are more private, more efficient, and honestly make things so much easier on the people you leave behind.
Billable Hours: Over the course of history, law firms have made money by selling the time of their employees. The more educated and experienced employees (Attorneys) cost more than the less educated and less experienced (Paralegals and other Staff). DUH! Here’s how the traditional client engagement works: A client comes in with a need, maybe it’s for the creation of a trust to hold the family cottage. Attorney says, “Ok, we can do that. I expect that it will take us 8 hours to draft it for you. 2 of those hours will be my time ($400), and 6 will be my assistant’s time ($600). Total estimated cost is $1,000.” Suppose the attorney truly does work for 2 hours, but the assistant is incredibly efficient and finishes in 3 hours. By the billable hour system, a firm with integrity will only charge you for the $700 worth of time that was put into the project. Question: How often do you think firms finish projects in less time than what is quoted? Answer: Never. More on this concept and an alternative in next week’s post.