Compensation timing depends on contract

Dear M.S.: It would appear that your case was handled on a contingency basis, so whatever agreement you signed with the attorney will prevail. That said, generally, expenses used to prosecute the case (experts, photographs, etc.) come off the top before the attorney gets his fee. Medical expenses incurred because of the accident customarily come out of your remaining two-thirds, or whatever you agreed to. The operative document here is the contract signed by you and the attorney when he took the case.

Dear Bruce: My 81-year-old father is showing interest in a living trust. He and my mother already have properly drawn wills. His only assets are a minimal amount of investments, plus $80,000 in real estate. Is a living trust necessary? There are three beneficiaries. – J.P., via e-mail

Dear J.P.: I don’t believe a living trust is a necessity, but it does eliminate probate fees. The probate fees, however, will be relatively modest. The important thing is that the will spells out that the properties, without regard to the beneficiaries’ needs, be sold and turned into cash. The last thing you want to do, as executor of the estate, is title all of the real estate in all three names. This can be a legal nightmare, particularly if an heir passed away, got involved in a divorce, etc.

Dear Bruce: Is it legal for a company to charge customers a processing fee for each check received for payment? I know of no other business that charges this fee. This company wants everyone to pay with a credit card; otherwise, if payment is by check or money order, there will be a processing fee. – D.B., California

Dear D.B.: You didn’t indicate what kind of company we are talking about. If it is a utility licensed by the state, I think there might be some redress with the utility commission. If, however, it’s just a store or someone offering a service, they have a right to impose whatever terms or conditions they chose, other than perhaps a violation of usury law, and you have the option of doing business with someone else.

Dear Bruce: I have a $150,000 estate. An attorney wanted $4,500 to set up a revocable trust. At that rate, wouldn’t it be less expensive to simply go through probate? How good or binding is a simple will? – I.N., Michigan

Dear I.N.: A properly drawn “simple will” is very binding. On a relatively modest-sized estate such as yours, I don’t see any reason for you to spend this much money to set up a trust. The fee seems high but, putting that aside, what is the reason for the trust in the first place?

There are no tax consequences on an estate of this size. The only advantage of the trust is that it avoids public probate. And, really, who will care how much you’re worth after you’re gone, other than your immediate relatives?

Dear Bruce: I have a longtime friend who has started selling prepaid legal services. Supposedly the main office is in Oklahoma. We are in a small military town in Texas. The way it works is you pay $49.99 down and $35 a month, and when you need a lawyer you call Dallas, where the lawyers are located.

Of course, the person you sign up with has his or her own Web site to sign up. You have to have up to a year contract, but she said if they stop paying, she will have to pay the money back because she gets paid a couple of days after the person signs up. I say it’s a pyramid scheme, and she doesn’t believe it. How say you? I wrote to you before and it was excellent advice. – C.S., via e-mail

Dear C.S.: I have no problem with prepaid legal. It’s rather like medical insurance that wasn’t available 100 years ago.

Many people fail to use an attorney because they’re afraid of the fees. The notion of prepaid legal is a valid one. However, the fees involved here seem to be a little pricey. It would depend on some measure on what is covered. Just a consultation with a lawyer on the phone would not justify these fees. I would never call it a pyramid scheme, but it would sound to me that it’s some kind of multilevel marketing thing where after you are covered by the plan you will be asked to sell it to friends, neighbors, etc., which is the hallmark of a multilevel marketing plan.

As you must know, I have no enthusiasm for multilevel marketing because there’s too much of an interest in getting new people rather than selling the product. If it is a multilevel marketing program, it would not be on my list, as there are many prepaid legal plans that have a great deal to recommend them.

Bruce Williams is a national radio talk show host and syndicated columnist. He can be reached at bruce@brucewilliams.com.