Our 24th annual conference was a great success. With 247 attendees, presenters educated and inspired guests. Keynote presenter Jolene Brown solicited questions from conference attendees, and we will address your questions in each email with an answer from a sponsor. Carolyn Thompson, Founder of Thompson Law, answers this week’s question.

Q: How do you budget and pay for professional advisors?

A: A banker told me once, Carolyn do you know that a farmer will spend more on one set of tractor tires for one year than they will spend on estate planning in their entire life. Perspective. What happens if there is a faulty estate plan or business plan? We lose more than a tractor.

Most qualified estate planning attorneys are going to be able to map out your core estate plan and give an estimate of the cost to prepare the “foundation” plan. Yes there will be amendments down the road, and additional charges when amendments need to be made. These are typically “one-time charges,” and most people or businesses simply utilize the cash on hand or work out a payment plan with the provider.

The business succession work, however, proceeds at a very different pace and involves a lot more players. That work could be billed hourly, or via retainer, or fee for project depending on the advisor. It may take many meetings before the professional team knows what, if anything, is being designed to incorporate into project documents. The budgeting for succession work is not too unlike the regular budgeting for accounting and legal, the difference is that in the initial design phases the fees are typically a lot heavier. Once built, the fees to maintain are significantly less than to build. Build in the expense, set aside the time, and everyone sleeps better. Lastly, a professional advisor, like a key employee, is free – yes free, because they are going to bring you more value than you paid.