Category: Breakfast at Epiphany’s

Introducing a new weekly blog that covers legal matters, business strategy, and life perspectives… all from the mind of a non-attorney (Project Specialist: Kelton Dopp).

 

Exit Planning: Not for the Faint of Heart

I’m a true believer in this: Of the things in life that truly matter, that truly make a difference, that truly help us “level up” as people – those things are almost never easy.

It’s a mindset and lifestyle I first adopted at a team building event in 2009. It was actually more than an event, it was a week-long camp that 90% of our High School basketball team attended. “Do Hard Things” was the challenge our speaker continued to make to us over the course of the week. It just clicked with me, and I latched on right away.

“Hard things” are the things that have been placed in front of us that we DO NOT want to do. We know they are there, but we want to avoid them at all costs (Examples may include: difficult conversations, moving on from something/someone, breaking a bad habit, etc.). For purposes of this post, I’m going to refer to them as “challenges” rather than “hard things”; cuz, ya know, I don’t want it to get weird.

For a little extra context, let me give you a couple examples of “challenges” I’ve taken on in my own life:

  1. Quitting high school football. You should know that I come from a really small hometown. My graduating class had less than 50 students. When you’re in a small school, and you have some athletic ability, it’s basically a sin to NOT participate. “We need all the athletes we can get” is a very public sentiment. So it was a HUGE deal when, during the summer before my sophomore year, I started to get that feeling: “I really don’t want to play anymore.” I tried like hell to brush it away, to ignore it, to avoid it. As the summer grew to an end, the feeling was still there and in the pit of dread in my stomach was unbearable. I didn’t want to let anyone down, and I didn’t want to face the backlash that I knew was coming if I decided not to play. But I knew I had to be true to myself and accept this “challenge”. I definitely lost sleep over it. I’ll never forget the first day of school, when I had to walk into the head football coach’s office and tell him I wasn’t playing. To this day, it’s one of the hardest things I’ve ever done. The backlash was actually worse than I’d expected it would be: There were a lot of adults who looked down on my decision and former friends who turned their backs on me. To this day, there are “upstanding” adults in the community who won’t talk to me because I didn’t play football in high school. It’s crazy. But it’s one of the best decisions I have ever made, hands down. It was the first time that I can remember choosing to stay true to myself in the face of public scrutiny.

*And by the way, my decision had nothing to do with wanting to “specialize” in a single sport. There is enormous value in participating in multiple sports. There is also enormous value in respecting people’s personal decisions.*

  1. Becoming a financial advisor. I’m naturally introverted. So you can understand my hesitation towards starting a career where prerequisite #1 = ability to talk someone’s ear off. But I did it. In part, because I gravitated toward the analytical side of the job. The other reason that I did it is because it scared the s*** out of me. By the time I was a senior on college, I had begun forcing myself to take the challenging path, when there was one available. I learned a few things:
    • The 10% of the career that is the actual PLANNING, I was really good at. No surprise.
    • I still sucked at “networking”, and my personal network was not large enough to allow my career to truly take off. No surprise.
    • My listen-first disposition actually served me extremely well when I met with clients. I was much better than most at assessing needs, and people really enjoyed working with me. Surprise.

*I’m extremely thankful for my experience as a financial advisor. Again, it was one of the most challenging things I’ve ever done, but the life lessons I learned extend far beyond the three I have listed.*

I promise I’ll tie this into Exit Planning soon… But for the sake of completely beating a dead horse, I want to address what happens to us, internally, when we are faced with a “challenge”:

It always starts with a little voice in our head. That voice, in its own annoying little way, declares what needs to be done. We then have a decision: Act or Avoid. The natural instinct is to avoid, and while every person is different, there are generally two methods for avoiding a “challenge” that pushes us outside of our comfort zone:

  1. Avoidance by procrastination. We suppress the voice and avoid the “challenge” until the window of opportunity to act has expired (Examples: the other person ends the relationship first, the application window for the job has expired, etc.). When we handle it this way, we usually experience a lot of guilt, because we have acknowledged the “challenge”, and possibly admitted to ourselves that we should act, but we avoid action anyways.
  2. Avoidance by rationalization. Others of us have become adept at “walling off” our “challenges” by rationalizing why we shouldn’t act. “That promotion would come with so many headaches. It’s not even worth it.” The rationalization allows us to “wall off” the challenge almost as quickly as it announces itself, and we are able to pretend like it was never there in the first place.

So I’m thinking we’re on the same page now… If I lost you, I’m sorry. That took more words than I thought it was going to take.

But the bottom line is this: life gives us opportunities to “level up”. To get outside our comfort zone. And even though it’s really, really, really difficult to do it, I believe that when we accept those challenges, amazing things can happen.

That’s why I love Exit Planning.

It is the quintessential “challenge” that business owners want to avoid. Why do they want to avoid it?

I’ll give you a couple reasons here:

  1. Business owners are afraid of getting old. Exiting the business represents “the end” of an era that they have spent nearly the entirety of their adult lives building! A classic reason for avoidance.
  2. “I don’t even have enough time in the day to run my business, how am I supposed to have time to plan for an exit?” They have priorities that feel way more urgent than exit planning. A classic rationalization technique.

I would strongly encourage you to read this article to learn more about the various reasons business owners choose to avoid Exit Planning.

Basically, it’s the end of an incredibly long, challenging, amazing, stressful, wonderful, painful, rewarding journey. Business owners, even more-so than “normal” people, have a tendency to allow work to equal life. When that happens, the end of work naturally feels like the end of life. It’s pretty easy to understand why someone would avoid that.

BUT! For the few that are able to accept the “challenge” and proactively PLAN FOR THEIR EXIT, the rewards (financially and emotionally) are unmatched. ß More on the benefits of Exit Planning in a future post.

I am so filled with admiration and respect when we engage with a new Exit Planning client for the first time. Despite the façade of confidence they cloak themselves in, those of us who understand this process appreciate the internal battle that was likely waged in order for that business owner to walk through our door. A major challenge was accepted.

They say, the first step is always the hardest, and so it is with Exit Planning. That fact is not lost on us. I only hope that if I was in their shoes, I would be brave enough to do the same.

I continue to be humbled by the likes, comments, shares and general love that you have shown our blog. If you have questions, comments, or topic suggestions for us, please direct those to: [email protected]

What is a Power of Attorney?

When I was little, sometimes mom and dad would go on vacation and leave me and my brother with Nana.

One of the things I can remember about that is mom pulling me aside and telling me that she was leaving an important note. It said something along the lines of, “If either of my children should need medical treatment between the dates of ____ and ____, I authorize _____________ [Nana] to make those decisions on my behalf.”

Then mom and dad would both sign it.

I won’t get into the psychology behind why THAT is something I vividly remember… I’ll just chalk it up to: I’m weird.

From mom and dad’s perspective, obviously the hope in leaving the note was that whoever was watching us – usually Nana – could show this note to a doctor, and be able to make immediate medical decisions on our behalf – if it was ever necessary.

In legal speak, we would refer to this as a Power of Attorney (POA) for Minor Children. Albeit an unofficial one.

To make it “official”, an attorney would likely draft it and it would be signed by a public notary. It would say essentially the same things as what my mom wrote on a notepad, but there would be no questions as to its legitimacy if Nana ever had to use it. Parents who have an official Power of Attorney for Minor Children can be 100% confident that a doctor will immediately listen to the direction of whoever is granted authority. It’s a small thing, but as we know, minutes can sometimes make a big difference in a medical emergency.

I start there because most of you who have been away from your kids for a period of time can relate to it – you probably did something similar to what my parents did, or at least thought about doing it.

Of course, the POA for Minor Children is not the only Power of Attorney you should know about…

 

Healthcare Power of Attorney: A legal form that says, “Hey, guys, if I’m ever so ‘out of it’ that I can’t think straight and make decisions for myself, I want _______________ to be able to make health care decisions for me.”

Financial Power of Attorney: A legal form that says, “Hey, guys, if I’m ever so ‘out of it’ that I can’t think straight and make decisions for myself, I want _______________ to be able to make financial decisions for me.”

Special or Limited Power of Attorney: A legal form that says, “Hey, guys, if I’m ever so ‘out of it’ that I can’t think straight and make decisions for myself, I want _______________ to be able to make ___________ decisions for me.” It designates a specific person for a specific kind of decision. Business owners, for example, often have a Special Power of Attorney, just for their business.

 

More Stuff Related to Power of Attorney:

Living Will: First, you should know that this document is completely unrelated to the conventional will and living trust that can be used to leave property at death. The LIVING WILL is used to provide guidance or state choices for treatment at the end of life. It says, “Hey, guys, if I’m ever so ‘out of it’ that I can’t think straight and make decisions for myself AND I (have a terminal condition/am in a persistent vegetative state), I (want you to/don’t want you to) pull the plug.”

Advance Directive: This term is just annoying to me. I think it exists just to confuse people. It is used to describe a legal document that tells doctors how you want them to carry out medical decisions you have made, even if you cannot communicate these decisions for yourself.

  • Healthcare POA and Living Will are two kinds of Advance Directives.
  • It’s really smart to have BOTH a Healthcare POA and a Living Will. In this case, you have designated a person AND given them instructions for handling your health.
  • Having an advance directive does not affect the quality of your care.
  • Having an advance directive does not affect life insurance or health insurance.

Final Disposition: Instructions for your burial.

Healthcare Proxy/Healthcare Agent/Surrogate: These terms are interchangeable. It is the person who you have given authority to make your healthcare decisions.

The word “Durable”: In the vast majority of cases, a Healthcare or Financial Power of Attorney can also be described as “durable”. Anyone who uses the word is simply emphasizing the fact that the Power of Attorney remains effective, even after the individual is unable to make decisions. It’s kind of like going to a restaurant and exclaiming, “I want my food to TASTE GOOD!” Duh. Of course you do… That’s the whole point of it.

  • Bottom line: “Durable” POA’s are the norm, and it takes a unique situation for a “non-durable” POA to become relevant.

Food for Thought:

So this post is all fine and dandy, and my sincere hope is that you have picked up a bit of clarity on the topic in exchange for your time. But… We really haven’t accomplished anything if nobody chooses to act on that clarity.

Science will tell us that 20% of the population will never bother themselves with a something like a POA… They just don’t give a damn.

Another 20% seemingly came out of the womb knowing that this is something they needed to do. They got it done ASAP, and probably convinced a smattering of their closest friends/family to do the same.

The remaining 60% of us are somewhere in limbo. Swaying in the breeze of indecisiveness. Somedays – like today perhaps – thinking, “Yeah, that guy makes some good points. That seems like a really smart idea. I need to do that,” only to have the thought drift away. After all, it doesn’t feel very urgent.

Imagine, for a second, that you are hosting a birthday party for your 2 year old child. Friends and family are planning to attend, and they will be at your house in about an hour. Then, like clockwork, your husband forgets to pick up a cake on the way home from work. Ooo… Triggered. What are the chances that you would make him turn around and drive 30-45 minutes to go get the cake? Pretty high, right? It feels urgent because people are going to be at your house in about an hour and the house is a mess and the world is falling apart. But, REALLY, on a scale from 0-10 where:

  • 0 = Completely Irrelevant
  • 10 = Life or Death

How IMPORTANT is it to have a cake at the party? For your husband, yeah it might be a solid 10. But for everyone else? Probably in the 1-2 range. We know they will be happy to be sipping coffee and eating the ice cream or whatever else you have for them. The point: It feels super urgent so it gets done. No question about it.

Now, it’s tough to draw a direct comparison… But on the same scale (0-10), how IMPORTANT is it to have a Power of Attorney? Probably in the 7-9 range? Clearly way more IMPORTANT than having a cake at your 2 year old’s birthday party.

Problem: It doesn’t feel urgent. So 60% of us do nothing, even though it would take about as much time and effort as going to pick up a cake from the grocery store. That 60% of us remains in limbo until some crazy life event smacks us in the face that makes it feel SUPER urgent: A parent, family member, friend, etc. goes through a nightmare situation. Such is life.

Please. Spare yourself the theatrics, strap on your big-boy pants, and generate your own sense of urgency. Don’t wait for life to do it for you.

Thanks to all for the continued support! If you have questions, comments, or topic suggestions for us, please direct those to: [email protected]

What is a Revocable Trust?

As a sophomore in college, I spent 5 months in Bordeaux, France.

Another example of me pushing myself WAY out of my comfort zone, it turned out to be one of the most valuable/memorable/amazing – and difficult – experiences of my life. I might write a little more about it another time – specifically the lessons learned. But, we’ll see.

In preparation for that trip, I started learning French. #RosettaStone. It sucked. Like… I’m a reasonably intelligent person, but for whatever reason my brain just wants NOTHING to do with learning another language. 2 years of Spanish in high school were an absolute prison sentence for me.

Something to know about me: If I’m not good at something… and I know I’m not good at it… I’m not trying to do that thing anymore.

So, naturally, after about 1 month of struggle-fest with Rosetta Stone French I started looking for a reason not to do it. It was pretty easy to find one. Everyone I talked to about the trip – advisors, former exchange students, current exchange students – asked me, “How’s your French?” … “Uhhh… Not very good,” … “Don’t worry, almost everyone there speaks English, so you’ll be fine.”

Bingo!

So yes, I was the lazy American that spent 5 months in a foreign country relying on others to speak my primary language.

And it worked out just fine.

My Points:

  • I recognize, respect, and envy anyone that takes the time to learn another language. It is an amazing skill. I don’t care who you are, you have not gotten enough credit for it… Especially if you did it as an adult (sorry kids, it’s just easier for you).
  • Those of us who are born speaking English are lucky. English is the Universal language of the world. By some estimates, almost 2 billion people speak English as their Secondary language. People in other countries STRIVE to perfect their English. Parents PUSH their children to excel in speaking it the way we push ours to excel in sports. We were born speaking it. It’s a real blessing. We may not realize it or appreciate it, but it is.
  • Finally – and this is the point that will link into this week’s content – I feel bad for the people who have to learn our language.

By almost all accounts, French is one of the easiest languages in the world to learn (talk about a blow to the ‘ole self esteem). English is among the most difficult.

There are probably thousands of examples of why that is true. Here is one from NapoleonMidnight, commenting on this blog:

“The plural of chicken would be chickens only if you are speaking about chickens – the animal. Once they have been slaughtered and are used for food, all of the multiple pieces of chicken that you might cook are always referred to as chicken, no matter how many pieces you use. UNLESS you specifically cooked 2 or more whole chickens and somebody specifically wanted to know how many of them you were cooking. Then you would say ‘two chickens’. Is this confusing enough?”

At this time I’d like to direct your attention to a term from Lawyer-Land that I expect would be puzzlingly confusing for anyone trying to learn the English language:

The Revocable Trust.

Trust: An unwavering reliance on the character, ability, or strength of someone or something.

Revocable: Capable of being cancelled.

I’m sorry, what?

You want me to put all my most valuable assets into something called… “Revocable Trust”?

So the lawyer marketing people had a bad day that day. But don’t let that discourage you from learning what a Revocable Trust is!

It’s approximately 1,327% better than its name would lead you to believe.

Explain it to me like I’m 5 please… 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.

But that’s why I have a will… (3) Things to know: 1) The legitimacy of a will must be verified by a court of law. This is called Probate. Probate costs money. 2) Probate takes a long time and can be very stressful for your loved ones 3) When a will is verified by a court of law, everything in your estate becomes public record. Trusts, on the other hand, are private.

Ok. But what if I still need my assets after I put them in the basket? No problem. Most people do. With a revocable trust, you can still use your assets.

Isn’t this just for rich people? No it isn’t. If you don’t want people knowing how much “stuff” you had after you die – a trust is what you need. Period. End of story. Privacy is a very legitimate, non-financial reason to own a trust. You are also doing your loved ones a big favor when you create a trust – it’s one less stressful thing they have to deal with after you are gone.

Do YOU own a trust? No. Why not? 1) As of today, my estate is rather small. Avoiding the cost of probate doesn’t help my family out a whole lot. 2) Privacy is not a concern of mine at this point in life. After all, I just told you that my estate is small… So if I die tomorrow and you look up public records of my estate and find out that it’s… Small… I don’t really care.

Ok, I get the privacy thing and I don’t want anything to be stressful for my family… But I’m still not convinced it’s right for me. If you’re looking for further rationalization that your estate is “big enough” to need a trust, try this:

Think about the value of your estate, minus anything that has a named beneficiary. As a general rule:

 This Counts      

This Doesn’t

Home Equity

401(k)/403(b)/IRA

Real Estate / Land Equity

Life Insurance Proceeds

Guns

Anything held in a Trust

Jewelry

Cash

In the state of Wisconsin, probate generally costs 4% of ‘Probate Assets’ (roughly half of that going to attorney fees. The other half going to the state fees.)

So, for an estate that has $100,000 in ‘Probate Assets’… The probate process will cost roughly $4,000.

The Google Machine tells us that the average cost of creating a Trust is about $2,500 for married couples.

Does it make financial sense for YOU to get a Trust? Make a simple comparison between the expected cost of Probate and the cost to create a Trust to find out:

Estate Size (Assets subject to Probate)

Cost of Probate (Assuming 4%) Cost of a Trust (Average)

$1,000,000

$40,000 $2,500

$750,000

$30,000 $2,500

$500,000

$20,000

$2,500

$250,000 $10,000

$2,500

$100,000 $4,000

$2,500

$50,000 $2,000

$2,500

Is it worth it for you to spend $2,500(ish) on a Trust now in order to avoid ______ financial cost when you die, privacy to your estate, and less stress for your family? Only you can decide that.

For me, right now, the answer is no. It’s not worth it. But I can also tell you that at some point down the road, the answer will be an emphatic YES.

A couple things to keep in mind:

  • What I have done here is very rudimentary in nature. These are purely estimates to give you some sort basis upon which you can start making your decision.
  • In reality, the cost of a Trust varies greatly based on the specific Firm and Attorney you are working with. In many cases, costs are based on the amount of time (Billable Hours) an attorney takes to draft your document.

Give Epiphany Law a call if you want to find out what our Fixed Pricing is for Estate Plans w/ a Trust.

Question for the Crowd: Have you ever had to deal with an extended/stressful Probate process? Do you wish a Trust would have been involved? Please comment below or send us an email (Re: Probate Experience) and we will post your story anonymously.

I continue to be humbled by the likes, comments, shares and general love that you have shown our blog. If you have questions, comments, or topic suggestions for us, please direct those to: [email protected]

Crazy decisions… And what is Exit Planning?

For me, the kid from a real small town in central WI, the path that led to Epiphany Law was pretty crazy.

Not much happens in Wild Rose, WI. It’s classic small town USA. No movie theatre, no stoplights, and a grocery store that is best known for selling expired food (sorry, Benny’s, you brought this on yourself). In High School, my friends and I didn’t throw crazy house parties or vandalize public property, we “rebelled” by bringing in lawn chairs to lunch and wearing shorts outside of our sweatpants. Damn, we were cool.

One thing always amazes me, though. For as small and seemingly insignificant as the town is, it seems like whenever I have the chance to tell people I’m from Wild Rose, they always have some story to tell me about going there. Shout-out to Nordic Mountain, Evergreen Campground & Resorts, and the public beach at The Red Fox, three destination spots on the outskirts of the Big City, for putting us on the map!

Despite being a family-friendly tourist location, the bottom line is this: The town itself is small and it’s quiet, and that’s the way we like it. The lack of excitement leaves more time for the things that really matter: Friends, Family, and High School Sports.

All that to say:

On a “crazy” scale from 1 – 10, where:

  • 1 = The kid who brings a peanut butter sandwich with the crust cut off (S/O Luke Thompson)
  • 10 = The kid who mixes his peaches, mashed potatoes, and milk together (S/O Matt Roemer)

Growing up in Wild Rose was like a -4.

It was great, and I loved every minute of it, but you should know:

When YOU read the story that brought Kelton to Epiphany, you might be like, “Yeah, Kelton, cool story bro. That’s how EVERY PERSON WHO HAS EVER BEEN EMPLOYED SINCE THE BEGINNING OF TIME got their job. That’s not crazy.” Then I’ll be like, “Ha-Ha! See above. I put a lengthy and altogether unnecessary disclaimer addressing that very point 🙂 .”

For the love of everything beautiful, just shut up and tell us your story! Ok, ok. I will.

If you read our previous blog post, you’ll know that my professional career began as a financial advisor. That’s where this story begins.

It was September 21st. Almost 8 months after I had passed my “financial advisor” tests and signed on for real. And I was already starting to feel the squeeze. I was running out of actual prospects to call; and, while I pushed myself to attend events – I sucked at “working a room”. I have some gifts, but the “gift of gab” is definitely not one of them. It was the beginning of the end of my brief career as an advisor. I sort of knew I wasn’t going to make it, even then. Determined as I was, though, it would take me almost 7 more months to waive the white flag.

What I didn’t know on September 21st, 2016 was that while one door was slowly closing, another door was opened.

I had a flip-of-the-coin decision to make that evening. Two different events that I could go to, and I’ll be honest, it made no difference to me. Boy am I glad I chose to go to Epiphany’s.

It was the first time I had ever heard of Exit Planning, and my passion for it was immediately sparked. I listened on as Kevin Eismann captivated a room of professionals, talking about what Exit Planning was, the huge need for it in our community, and the team of advisors (CPA, Attorney, Banker, Financial Planner, etc.) that was needed to get it done right. Something clicked for me then. It wasn’t fanboy mentality – I didn’t even know who this guy was – it just made sense.

I was lying in bed that night, thinking about this cool new thing that I had learned, when an idea came to me: If those are the different advisors who are needed in an Exit Plan, why don’t we get one of each of them together and do a panel discussion? We can make it available to the public, and – who knows – maybe each of us will get some work out of the deal.

Something very important happened next: I followed through on my idea. So often, dreams and ideas die on the pillow because we wake up the next morning seeing all the work it’s going to take to make the dream reality. I didn’t let that happen. I worked with the Chamber of Commerce and Mr. Eismann to set it up. We found some great professionals to fill the remaining seats on our panel, and by all accounts the event was a success.

During the course of that time, it is my belief that Kevin must have seen something in me – either that or he’s just a really nice guy who likes to give away free books to acquaintances. He gave me (2) books to read so I could learn more about Exit Planning, and told me to come back and see him when I had finished.

Again, something very important happened: I read the books. After all, this wasn’t my job (yet). I was still just a financial guy. I knew some business owners who could use Exit Planning, but I wasn’t the guy who offered it. The reality is that it would have been SO EASY to leave the books on a shelf in my office, because I had “more pressing matters”. You know, stuff that might actually get me paid. I didn’t. I knew Kevin was the real deal, and I knew this was something I had a passion for. Those books helped me to begin understanding HOW to help people Exit their business. In my next meeting with Kevin, I presented him a mini business plan, summarizing what I had learned. I think that impressed him.

At that point we sort of went our separate ways for a while. I struggled through a few more months of failure. When I finally decided to hang it up, I really didn’t know what I was going to do next…

I interviewed at like 3 different places, right off the bat. I got an offer right away from a company that was pretending to do marketing, but I’m pretty sure was fronting some kind of pyramid scheme. Sketchy. That was a strong no. The second interview was for an opportunity to work in ESOP’s. I was really hopeful that one would work out, but I ended up not getting an offer. The last opportunity was to work in suitability for a pretty large financial firm. It was basically the “behind the scenes” part of what I had been doing as a financial planner. I would keep my licenses, and have some opportunity to move around in the company, if I wanted to. They made me a really nice offer, which I thought about for a few days, and I accepted.

Kevin was one of the first people I told – he knew I had been looking for something new. I sent him an email, telling him the things I liked and didn’t like. I think I even told him how much I was going to be making…

Then, at the bottom of the email, I wrote something really important: “I don’t start for a couple weeks. If you have anything available, what I really want is to work with you.”  I just put it all out there. No pride. No shame. Just did it.

We met. He didn’t exactly have a spot for me, but he said he would make something work. The offer was to help him build an Exit Planning program. My dream gig. The catch: I’d be earning half what I had just accepted at the other place.

That is not an exaggeration. Half. Exactly half.

Coming off about 14 months of real struggle. Like mentally, emotionally, and financially grinding it out as a fresh-outta-college dude. I cannot tell you how nice that previously accepted offer looked. It meant I could stop eating like s***. It meant I could start digging myself out of this nice pile of debt I had built. It meant I could buy my longtime girlfriend a ring. It meant I could R-E-L-A-X… Relax.

Of course, you know how this story ended up. Crazy? You tell me.

Anyone who knows me knows that I am a very thoughtful, careful person when it comes to making big decisions or having important conversations. It wasn’t a decision I made on a whim.

Some people may call my decision stupid. Crazy. Foolish. That’s fine. I respect that.

For me, it came down to an acknowledgement of the fact that we as humans have a very limited window of opportunity to do things that we really believe in. If this opportunity had come to me 5 years later and I was a married man with a kid on the way, I wouldn’t have been able to do it. It would have been out of the question. The window of opportunity to seize moments and take risks – for those of us that are into that sort of thing – is really very small.

Patience. Delayed Gratification. Two very unattractive terms in today’s society. They are not lost on me.

I am thankful every day for the decision I made.

I made it because I really, truly believe in this thing called Exit Planning.

 

What is Exit Planning?

I suppose any good blogger would actually answer the question posed in the title… Unfortunately, I am not that good blogger.

I’m just going to give you one piece of it here:

From 20,000 feet, Exit Planning is just good business strategy.

If you want the full story on Exit Planning, I humbly ask you to visit our Exit Planning page. There, you can read along as I break it down from the most basic definition possible to its vital, core benefits.

Question for the Crowd: Are there any major risks that you have taken in life (or not taken)? How do you feel about that now? Got any advice for the young adults out there who might be reading this? Please comment below or send us an email (Re: Big Risk) and we will post your comments anonymously.

As always, I genuinely appreciate your likes, shares, and feedback.  If you have questions, comments, or topic suggestions for us, please direct those to: [email protected]

Past, Present, and Death of the Billable Hour

Prior to joining Epiphany, my professional work experience was in financial planning.

Eat, breathe, and sleep it, I did – for about 3 years in total. It was fun, at times; but if I’m being completely honest it was mostly stressful. For a kid right out of college with a rolodex the size of a fortune cookie, the financial planning gig only had one probable outcome.

To make things more difficult, I was – and still am – the type that really wanted to help my clients, as opposed to the many who just want to make a sale. It’s harder to stick around in the industry when you adhere to a moral obligation to do the right thing. I’ll admit, I was bitter about it for some time after I had thrown up the white flag: “I have the knowledge. I have the true intentions. I should be the one succeeding.” But it wasn’t so. In the end, I’m incredibly thankful for my time spent as an advisor. By most measures, I suppose it was a failed experiment. If you want to call it that, it’s fine with me. I’m calling it a stepping stone.

That stepping stone has led me to one of the top law firms in the Fox Valley (I’ll recap what that path looked like another time – it’s a mildly interesting story).

Joining the firm was interesting… The general atmosphere of this place is not anything like what I expected. I guess I assumed that law firms fit into most-if-not-all of the following criteria: Elitist, tense, cut-throat, stale, shrewd… As a smaller, specialized law firm, I knew it wouldn’t be super hard-core. But I still figured I’d find some of that culture. Strangely, I haven’t. I would go into a diatribe about what our culture IS like (blah, blah, blah), but I know you really don’t care. Just know that it isn’t like that ^^^, it’s a lot better.

For those that read last week’s blog, consider this me holding up my end of the bargain:

I’m committed to writing content that is relevant, light-hearted, and accurate without being… how do you say it… DRY AF.

Are you going to hold up yours??

On to the Content!

As I referenced in last week’s blog: Over the course of history, law firms have made money by selling the time of their employees. It’s called Billable Hours. Most of you are aware of how they work. (If not, quickly check out this article from Eli Mattern) The biggest problem with Billable Hours? They promote inefficiency!!

Let’s look at an example:

Joe Smith comes into XYZ Law Firm and tells them he wants a trust to hold his family cottage (smart planning Joe!). The attorney takes down a bunch of information and gives Joe an estimate based on the projected billable hours. Let’s say the attorney and support people work together well and finish the project ahead of schedule: Joe is happy because he got exactly what he wanted and it even cost a little less than what they originally told him.

Steve Wilson comes into XYZ Law Firm the very next week with the same request: he wants a trust to hold his family cottage (smart planning Steve!). Herein lies the problem though: Joe and Steve’s requests were exactly the same, but will be treated like they were completely unique. A firm that needs to bill hours will start Steve’s trust from scratch, even though they have a template (Joe’s) that could be used to do the project faster.

Under the Billable Hours system, there is no incentive to be efficient! The whole concept is incredibly ambiguous and outdated. Nobody is going to challenge an attorney that says a trust is going to take 10 hours to draft…

I will concede this: There are absolutely times when a case is so unique that there is no avoiding a Billable Hour system.

But for most of you, this whole system is like going online to Nike ID (customize) a pair of sneakers online, but instead of creating something totally unique/different, you decide to create the same colorway that you could just buy off the shelves for 40% less. Nobody does that!!! But we’ve done it in “lawyer world” for a LONG TIME, because the terminology is confusing and we don’t know any better.

Say what!?

The end result: LEGAL SERVICES COST MORE THAN THEY NEED TO. Nobody tries to find better ways of doing things and people generally work “just hard enough”. The thought of that drives me insane!!!

An Alternative:

Let me apologize in advance. Once you read the alternative you’re going to be mad at me for even trying to explain the billable hour system.

It’s so simple. So obvious. I almost don’t even want to say it…

The answer is: Products.

Instead of quoting billable time to a client, quote a flat fee for the creation of the product. Trust = $2,000. The more efficient the firm is in delivering that trust, the more profitable they become on the project.

Let’s look at our previous example of Joe and Steve:

Let’s suppose that Joe Smith’s family cottage trust was the first one of its kind that XYZ Law Firm would ever do. So they quote Joe $2,000 for the trust. Joe agrees. Due to the many hours of research and document creation required, the company incurs costs of $2800 on Joe’s case. They lose $800.

Steve Wilson comes in the following week with the same need. The firm quotes Steve $2,000 for the trust. Steve agrees. This time, the firm uses the template that they have to work with because there is incentive to finish the project as efficiently as possible! The company only incurs costs of $1400 on Steve’s case and they make a profit! Over time, as the firm discovers methods of becoming more and more efficient, trust prices go DOWN.

It really isn’t groundbreaking. Just being dramatic. But it is a fair assessment of what the legal world is like right now, versus what it will be like in the future. As I previously stated, there will likely always be some authority for Billable Hours, especially when a truly unique case comes along and an attorney truly needs to “customize” for you. But in general, Legal Services will become Legal “Products”.

I’m very proud to say Epiphany Law is ahead of that trend.

I did not get the green light from the boss to share our specific price points. But I can tell you that we offer a pretty extensive list of legal products at a “flat rate”. That list includes:

  • Estate Plan w/ a will
  • Estate Plan w/ a trust
  • Entity Formation
  • Trademarks
  • Copyrights
  • <Insert “AND SO MUCH MORE!” Comment Here>

I would strongly encourage you to consider a law firm that offers “flat rate” pricing options for your next legal project (Hint, Hint, Hint…). I think we can all agree that it just makes sense!

As for you, Mr. Billable Hour, you sir have officially been put on notice: We’re coming for you.

Question for the Crowd: What do you think about “flat rate” pricing for Law Firms? Would you rather pay a flat rate for legal services or pay by the hour? Please comment below or send us an email (Re: Billable Hour) and we will post your comments anonymously.

I am truly humbled by the likes, comments, shares and general love that you have shown our blog. If you have questions, comments, or topic suggestions for us, please direct those to: [email protected]

Legalese Is the Worst

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.

Just kidding.

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.