A Clever Way to Market Estate Planning Services

I discovered a clever way for a lawyer to market his estate planning services when the phone rang the other day.  It was Gibraltar Trusts on the line, which monitored real estate transactions and saw that I had refinanced my Tucson office.

The salesman wanted to tell me about a new tax law I should know about, ("the lure") and how to protect my assets so they wouldn't go through probate court.  Intrigued, I made an appointment for him to visit me.  He was qualifying me as a client, making sure I had some money to spend.

When salesman came over, he told us that the new federal law would mean more homeowners would have to pay the death tax starting in 2011.  He said our will needed to be updated with HIPAA provisions and that our Illinois powers of attorney wouldn't work in Arizona. He was selling by educating.

The solution to avoiding probate was to put all our assets into a living revocable trust, which he could do for $1,895 with the help of a lawyer in Mesa, AZ, who had created thousands of trusts.  He gave me a printout of the lawyer's contact information and said that Gibraltar Trusts accounted for 1/3 of the lawyer's practice.  Of course we could pick another lawyer if we wanted to.

I thought -- what an interesting marketing technique for the lawyer.  Of course it's unethical for a lawyer to have a "runner," so I asked if the lawyer had any financial interest in Gibraltar or if he paid the trust company any fee.  Gary said, "no, but he does give our customers a heck of a deal."

This is classic marketing with allies.  The lawyer gets new business from the ally, in exchange for discounted rates for the ally's customers.

Setting aside the marketing aspects of this approach, I contacted my lawyer, and here's what he had to say: "Inter vivios trusts are primarily used to avoid estate taxes and secondarily used to avoid probate.  The Federal tax exemption is now at $2,000,000. for each estate.   Therefore, unless your personal assets total over two million dollars you do not have to be concerned about Federal estate taxes.  If your major property holdings are now held in joint tenancy, (your real estate, stocks, bonds, bank accounts, etc.) the property automatically is transferred to the survivor upon the death of the first to die of you and your wife.  Therefore, you do not need a living (inter vivos) trust at this time.  When either of you or your wife dies that is the time to place your property in a living trust.  If you have powers of attorney for health and property which were executed in Illinois they should also be recognized in Arizona, otherwise you would need a separate power of attorney for every state."

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