Paying attorneys ranks right up there with paying plumbers and mechanics for most people. They dread being blindsided with the need for these expensive services. Although these three examples are from different worlds, they are very similar in one key way: expensive as they are, they are also indispensable.
But that doesn’t mean you have to be wasteful with these providers. Ahead are a few points about where legal expenses can spike up on you. They cover several different areas, but all these strategies share a common thread: The need for good planning. Look them over and think about how they can apply to you.
Everybody wants to be the next Apple, slugging away in the garage on an exciting new product that will take the world by storm–and make you rich. Every year, thousands of big dreamers get together with like-minded friends, on fire with entrepreneurial spirit, and cook up a product that will land them on Easy Street.
So they slug away for a few years, looking for financial backers and growing markets, before realizing that it’s just not going to happen. When the business fails, there are assets and liabilities to fight over, and if the business hasn’t spelled out the standing of each participant ahead of time, there will be considerable legal expenses in hashing it all out.
Nobody wants to start their business by thinking about how to handle things if it fails, but the fact is that this planning step is helpful even if the business flourishes. It can simplify profit distribution, buyout of partners, and issuance of stock. And in another corner of the conversation is something else nobody wants to think about: Good planning is also helpful if one of the entrepreneurs dies. And that carries us to our next point.
It’s ironic that two of life’s most unavoidable things–death and taxes–are also among the ones we least like to talk about. But both can cause considerable financial heartache when handled poorly. Right now we’ll look at death.
Dying intestate–that is, without a will–is one of the most expensive omissions one can make, and it’s one of the most inexcusable. We will all die someday. Our property, debts, and money will have to be distributed to other holders. If we don’t spell that out in advance, there will be a protracted and expensive legal process for figuring it out. Failing to plan for the most inevitable of events can waste money and misdirect our assets.
In some cases, this is easy. But particularly for people who’d like to bequeath money to charities or an alma mater, specific wishes won’t be carried out without a legally effective plan.
Certain labor markets are very competitive, and it is very beneficial to tack on some extra education in order to get ahead. Southern California is a good example. There are a lot of high-paying jobs just out of reach of entry level workers, so they immediately begin thinking about working on additional degrees. Because many people make this decision a few years out of their bachelor’s program, they often have their income heavily spoken for before they are even admitted to graduate programs.
As a result, they finance that higher education with student loans. And while there’s nothing inherently bad about that, there is a wrong way and a right way to do it.
Remember that if you get swamped in other debt in addition to your student loans, you can’t discharge them in bankruptcy. So it’s important once again to plan for things. Don’t just assume chapter 7 bankruptcy laws will bail you out of your financial woes.
Quality legal representation is a must. You will need it at some point no matter what you do in life. And getting good service is costly. But there is no reason to utilize more billable hours than you absolutely must, and proper planning can drastically lower your lifetime’s invoices.