Many of us are concerned about the high cost of attorneys and feel that we can now go online and find all the free forms and free advice we need. While it’s admirable to arm yourself with information, the field of senior law and Medicaid planning is not a do-it-yourself project!
A simple example: You find a form for a power of attorney online and then sign it, or have a parent sign it. It was either free or $10, so you feel pretty good about it. After all, didn’t you just save a huge legal fee? But what you didn’t notice is that several critical provisions were omitted from this “generic” power of attorney form, and by the time you need to use the form, it’s too late to fix it. His mother may now be incapacitated and unable to sign a new power of attorney form, forcing him to hire an attorney to represent him in a guardianship/conservatorship proceeding. So he is now faced with spending thousands of dollars, while the attorney’s fee for preparing his top-of-the-line Durable General Power of Attorney may have been only $150 or more.
Another example is with Medicaid planning. He’s heard or read somewhere that it’s a good idea for his father to give away his assets, so he’ll be “poor” when he applies for Medicaid, thus protecting his money. But he didn’t know about the recent change in federal laws regarding the calculation of penalties. So now your father is disqualified from Medicaid eligibility for many months or years, when through proper and careful planning by a Medicaid attorney, he could easily have saved half, if not all, of the money! his father’s!
Lawyer Billing Methods
It should be noted that not all elder care attorneys charge the same amount or even use the same method to calculate their fees. First, there is the traditional billing method, which is to charge by the hour. Most attorneys charge in increments of 1/10 of an hour x their hourly rate. Keep in mind that although an inexperienced attorney will generally have a lower hourly rate than one who has spent many years concentrating on this area of the law, the inexperienced attorney will undoubtedly take much longer to figure out what to do and get it done. Therefore, the fees may not be much different at the end of your case, and you will have paid for the education of the less experienced attorney.
A second billing method is to charge a fixed fee for a given project. The advantage for the client is that he knows in advance what the cost will be and does not have to watch the clock so carefully. The advantage to the lawyer is that he can be rewarded for his efficiency and hopefully compensated for the many unpaid hours spent creating effective forms that resolve his client’s problems.
A third approach combines the two, so that the settlement is $X for the following documents or legal work, which includes a maximum of Y number of hours. The idea here is that if something comes up after the project starts, or if the client is extremely picky, requires multiple changes to documents, asks a million questions, etc., the lawyer won’t be stuck working for free.
In either case, you, as a potential client, have every right to ask the attorney you are considering hiring what the cost of their legal work might be. Since the facts of each case differ, it may be impossible for the lawyer to give you an exact figure, but you should at least find out the hourly rate and how much other similar cases have cost. Again, take into account the experience and knowledge of the attorney you are considering. Not a bargain if you saved $1,000 in legal fees if a less-than-optimal document or plan ends up costing you $10,000 years from now!