Many of us are worried about the high cost of lawyers, and feel that we can now go online and find all the free forms and free advice we need. While it is admirable to arm oneself with information, the field of elder law and Medicaid planning is not a do-it-yourself project!
One simple example: You find a form for a power of attorney online and then sign it, or have your parent sign it. It was either free or $10, so you feel pretty good about it. After all, didn’t you just save a big legal fee? But what you failed to notice is that several critical provisions were omitted from this “generic” power of attorney form, and when the time comes that you need to use the form, it’s too late to get it fixed. Your mother may now be incapacitated and unable to sign a new power of attorney form, forcing you to hire an attorney to represent you in a guardianship/conservatorship proceeding. So now you’re 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 so.
Another example is with Medicaid planning. You heard or read somewhere that it’s a good idea to have your father gift away his assets, so he’ll be “poor” when he applies for Medicaid, thus protecting his money. But you didn’t know about the recent change in the federal laws regarding 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 specialist attorney he could easily have saved half if not all of your father’s money!
Attorney 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’s the traditional method of billing, which is to charge by the hour. Most attorneys charge in 1/10 of an hour increments x their hourly rate. Be aware that although an inexperienced attorney will usually have a lower hourly rate than one who has spent many years concentrating in this area of the law, the inexperienced attorney will undoubtedly take a lot longer to figure out what to do and do it. So 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 lawyer.
A second billing method is to charge a flat fee for a given project. The advantage to the client is that she knows up front what the cost will be and does not have to watch the clock as carefully. The advantage to the attorney is that he may be able to be rewarded for efficiency and hopefully be compensated for the many unpaid hours spent crafting effective forms that solve his client’s problems.
A third approach combines the two, so that the arrangement 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 gets started, or the client is extremely demanding, requiring multiple changes to documents, asking a zillion questions, etc., the attorney won’t get stuck working for free.
In any case, you as the potential client have every right to ask the attorney you are considering hiring what the cost might be for your legal work. Since the facts of every case differ, it may be impossible for the attorney to give you an exact figure, but you should at least find out the hourly rate and what other similar cases have cost. Again, take into consideration the experience and expertise of the attorney you are considering. It’s no bargain if you saved $1,000 in legal fees if a less-than-optimal document or plan winds up costing you $10,000 several years from now!
Elder Law Corner 