I was reminded again this week of the cost of quality. It is not uncommon to hear people lament what they perceive as a loss of quality in the products we use everyday. “You know, they just don’t build them like they used to.” However, at the same time, we are all sensitive to the increasing cost of the items we purchase. You might hear: “Wow, when I did this ten years ago it didn’t cost this much.”
We all learn from an early age – you get what you pay for. That adage is as true when it comes to professional services as anything else. But, when working with service professionals such as attorneys, accountants, or financial advisors, it can be difficult to understand whether or not you are receiving quality. While a higher price does not necessarily equate to better quality, I would almost guarantee that the lowest priced option won’t ultimately prove to be the best in terms of quality.
One of the main reasons people create trusts is to eliminate the need for probate. As I was reviewing some estate plans this week that were drafted by other attorneys, I reviewed a trust that had been amended by an attorney to leave no beneficiaries – guaranteeing a probate. I reviewed a plan that had gifts coming from both the trust and the will – again guaranteeing probate. Finally, I reviewed a tangible personal property memorandum where the introduction on the memorandum explained, correctly, that it could not be used to make gifts of cash. But, the attorney had prepared the memorandum with nothing but gifts of cash – again guaranteeing a probate.
All of these plans came at a cost that was touted as a great bargain or at least consistent with what was charged elsewhere. But, the plans don’t work. Any money spent was not only wasted, it will result in even greater costs down the road if not corrected.
As I evaluate what we do and what I hire others to do for me, I want to understand that they have unique intellectual property that allows them to do things in a way that will accomplish my goals in a way that no one else really does. Certainly technical skills are important, but so is experience, process, ideas, etc.
Our family built a new home a couple of years ago with Visionary Homes. It is the second home we have owned. We lived in our first home for nearly 15 years. That first home cost a bit less than our new home and we would be wrong to have expected that prices would be the same in 2015 as they were in 2000. But, even in 2015 we could have had the home built for less. We could have chosen different options or fixtures. We also could have gone with a builder that promised a lesser price, but ended up costing much more. Instead, we went with a builder, that while more expensive, delivered our home on time, on budget, and of excellent quality. It wasn’t just their technical skills, it was their experience, their processes, their ideas. It was the fact that they cared about what they did and were innovative in doing it.
When analyzing the costs associated with planning, don’t forget to factor in the cost of quality.