Wednesday, February 27, 2008

What's That Funny Smell?

I woke up this morning to a glorious day. It was one of those famous North Texas winter days with the smell of spring in the air and a gentle breeze, lots of sun and highs in the 70's. Wow, why can't all winter days be like this?

As I went to the mailbox, I noticed the neighbor's dog, a black Lab named Stinky, galloping around my yard looking for someone that wants to play. Of course when I bent over a little to rub his ears, he bolted away wanting me to chase him. I wasn't up to that but enjoyed watching his energy as I walked across the yard toward the mailbox.

When I reached the box, I found a very official looking letter from Bale Estate Services. Hmmmm, "what's this?" I thought as I quickly opened the envelope. To my surprise, the letter said that a benefactor, Mr. B. Shale, had died and left me 1/2000th of his estate. It says that the total B. Shale estate was $500 million so my share will be $250,000.

Seems like I remember something like this on TV years ago. Yep, there was a show called "The Millionaire" where a guy would knock on a door and hand out checks for a $1,000,000. The rest of the show was spent observing what happened to the recipient after they received their windfall.

Wow, looks like I won the lottery and didn't even have to buy a ticket! How do I get my check?

Not so fast there Bugs Bunny. There is some fine print. Like the lottery, this is NOT a lump sum payment. Rather, the inheritance will be paid out over a period of 10 years and will be delayed a little.

Oh I see. Let me read the fine print. Payments will start two years from now at $56,000, then taper off 20% per year over the following 9 years until the whole $250,000 is paid.

Well that's not too bad. Where did I put that calculator? There it is ... OK, let's see. The payments will be $56k, $45k, $36k, etc. I guess I better not tell my spouse we are rich, but we can always use the extra cash. I'm sure we can spend it.

How about a new set of clubs and a big screen TV? We could use a better car and by the time the money gets here the kids will need their own car plus money for college. Could we afford one of those hot tubs, too? It was sure fun to dream as I walked back to the front door in a daze.

When I think about it, I believe that it is better that the money is paid out slowly. I won't have to pay as much income tax and I will have time to think and plan how to spend the money. Let's see, where do I sign to accept the offer?

Wait a minute there Speedy. There are a few more details in the fine print. To get the the payments started, you and the other 2000 recipients have to ALL agree to make a sizable up front payment to Mr. Shale's favorite charity ... the Foundation for the Betterment of Rough Necks, FBRN.

Oh yeah? How much do we have to give the FBRN?

Well it's not too much ... only $25,000.

TWENTY FIVE THOUSAND DOLLARS!!! How am I supposed to do that? No one has that much money sitting around. And how am I supposed to get the other 2000 recipients to sign up? That's impossible!

Calm down please. Mr. Shale knew it would be tough so he provided this option clause that makes it a lot easier. Mr. Shale arranged with Texpeake Services to help you out.

REALLY? What do you mean?

If you sign the option clause, Texpeake will take care of all the details and make sure the FBRN and all the other recipients get paid. Plus they will even pay you a nice "bonus" up front. Yep, they will pay you and all the other recipients $500 today and then pay 20% of Mr. Shale's payments as they arrive.

So let's see ... if I want, I can sign the option clause and Texpeake will pay me $500 now and $50k over the ten years that the on-going payments are made.

Yep, for their help, Texpeake will keep the other $200,000 of the payments to cover their donation to the FBRN and all the overhead that was required to keep track of the process. I know 80% seems like a lot to pay Texpeake for their management but it's a VERY complicated process and what other choice do you have? Here ... sign now and you get this nice $500 check.

WOW ... now I have a headache. Do I have any other choices? Neither one of these sounds like a "no brain-er." Plus I think I heard on the radio that some of the other recipients are getting a bigger bonus, up to $4000 and a little higher percentage, too.

Do I wait and hope for more than Texpeake is offering or take the sure $500 now? Why not just borrow the $25,000 for the FBRN and pay a little interest instead of having Texpeake handle everything? I could sure use the other $200,000 but would all the others join with me or will they just sign the Texpeake option?

I don't even know if this is real. Who is Mr. B. Shale anyway? Did he really have a $500 million estate?

Wow there sure are a lot of questions. I don't have time to figure this out. My head is spinning a little so, OK, let me review the bidding before I sign. If I sign the Texpeake offer, I get a check now for $500 then in two years I start getting a 20% share of the estate payments, about $11,000 the first year, right? No further delays or considerations, right?

Well, not exactly. Texpeake may not get it started quite that fast. They will give you the bonus check alright but it may take longer before you get the follow-on payments. Texpeake is very busy handling all the new estate payments and can't guarantee a payment of $11,000 in just 2 years.

Really, why is that?

Well first you will note that the total amount that must be paid to FBRN is 2000 times $25,000, about $50,000,000. That's more than Texpeake has available right now and besides the folks at FBRN can't spend more than about $2.5 million a year ... it's not a large group. Their charter only allows them to spend what they need each year. Their non-profit status with the IRS would be in jeopardy if they took too much at once. Thus it will take Texpeake and the FBRN about 20 years to make all those donations and therefore it will take a long time to get all those B. Shale estate payments underway.

But don't worry. The agreement with Texpeake allows them to pool all the recipients so everyone starts to get their proportionate share of the payments as soon as the first $5 million in payments to the FBRN are made and the two-year waiting period has passed. Your payments will be stretched out but you will still get the whole $50,000 you are due. It will just take 30 years instead of 10 years.

Now my head is REALLY spinning. I wish I had not gone to the mail box. This is just too bizarre for words! It just doesn't smell right.

And what IS that smell? Oh C%*P ... Stinky left a "present" in my yard. Now I have to go clean my shoe and those spots on the carpet too. Where did I put that bottle of aspirin?


1 comment:

Enjoy Gas said...

The story you just read is totally fictitious. Any similarity between the characters or companies in the story and real persons or companies is purely coincidental.

My apologies if the story is a "little too close to home."