Top Ten Estate Planning Mistakes

  This is the second article in our series about the mistakes people make with their estate plans.

#9—Attending the $2,000 Free Lunch

  I recently received an invitation to a financial planning seminar featuring a free lunch.  The fine print at the bottom of my invitation contained a requirement for lawyers attending the free lunch to pay a $2,000 educational fee!  While I did not attend the “free” lunch, I feel sorry for those that did.

  The old adage, there is no such thing as a “free lunch”, certainly rings true in this situation.  The purpose of most of these seminars is not to provide people with an education, but to sell them products they do not need and should not invest in.  These invitations are usually a sales presentation on the need for you to purchase trust agreements and annuities to avoid probate.  Once you purchase both products, you can die twice and avoid probate on both occasions.

  The typical person does not need a trust agreement.  They are complicated documents, which are hard to read, let alone understand.  Probate avoidance, if this is an appropriate goal, can easily be achieved by the new transfer on death deeds and by proper beneficiary designation on your investments and bank accounts.  Annuities are generally not good investments for most folks – but if you do invest in an annuity, you want to use one of the highest rated annuity companies – not the usual kind sold at a “free lunch”.

  The best way to pick a financial planner and attorney is word of mouth.  You can ask your friends and relatives who they use.  When you meet with a financial planner or attorney, you should ask about the specific experience they have in the area you need.  While doing a little background work may be harder than attending a free lunch, my bet is you will be thousands of dollars ahead in the long run, like my decision not to pay $2,000 to attend a “free lunch”.

Keith P. Huffman
July 2009

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