The Internet and DIY "Lawyering"

Clients oftentimes call our office after attempting to draft their wills or file a deed on their own. The result is always the same: it costs clients more money to “undo” what they attempted on their own or, if it cannot be “undone,” they spend more money to accomplish what they originally intended.

For this reason, you should always contact my law firm before you pay for a form on various low-cost websites. To the untrained eye, a layperson has no way of knowing whether the form is legally sufficient. Moreover, there is little way to know whether the form meets other requirements which may not invalidate the form, but would save the client money in the long run.

There are two instances where clients typically run into trouble. Foremost is filing a deed to transfer real property. If you do not draft a deed correctly, you may create problems if you try to sell your home later. To rectify the problem, a lawyer must file an attorney’s affidavit and the correct deed to resolve an improperly recorded deed. When this happens, it costs clients more than double the cost to simply have us prepare and file the deed from the beginning.

Secondly, clients are tempted to buy will forms online. I have never seen an online form which includes all the provisions my law firm incorporates into each of our clients’ Last Will and Testaments. These omissions result in a client spending more time, money, and effort to probate a deceased relative’s will. During the difficult time of grieving a death in the family, the last thing the decedent would have wanted is to cause undue delay, burden, and expense to his or her family. By hiring us to guide you through this process, you will save time and money in the long run, and perhaps more importantly, you will gain peace of mind knowing your wishes will be carried out in an efficient and timely manner.

Please contact my law office for information specific to your situation. The above is for general information purposes only.

Dividing Assets in a Divorce: Crafting Effective Settlement Agreements

This is part four of a four-part series. Read part one, part two, and part three.

In the final stages of a divorce (assuming the parties are able to settle outside of court), the settlement agreement must be carefully negotiated and drafted to each parties’ advantage. The language in a settlement agreement is particularly important because many provisions outside of alimony and child support are non-modifiable. This means one party is generally unable to change a provision or even successfully petition the court for a change after the divorce is concluded. I have previously written about problems clients face after a divorce here.

One key aspect of settlement negotiations concerns the language surrounding the parties’ marital residence and mortgage. If the parties have agreed to let one spouse remain in the home, the other spouse may need to quit claim his or her interest in the home. Additionally, the spouse who keeps possession of the home should be required to refinance the home into his or her sole name after a set period of time. A tricky problem for the parties, however, is dealing with possible contingencies stemming from an inability to refinance the home. At our firm, we carefully review the parties’ circumstances and discuss these types of scenarios with our clients during settlement negotiations.

Alimony is tax-deductible to the paying spouse and taxable income to the receiving spouse. Therefore, parties must consider how to use its tax treatment to their advantage. For example, if the wife has a low income or if she is unemployed, it may make sense for the husband to pay her alimony in lieu of another type of property transfer (i.e. a transfer from his retirement accounts) to reduce potential tax liability.

By the time divorce settlement negotiations come to a close, each party is ready to move on with his or her life. Each party should speak with their attorney about how they can afford to bring a swift end to their obligations to their former spouse after the divorce decree is signed. When crafting a settlement agreement, there is a certain intangible value to each spouse ending his or her obligations as soon as possible. While this is certainly limited in the case of child support, each party must contemplate the value of concluding their obligations to one another in a timely manner.

Please contact my law office for information specific to your case. The above is for general information purposes only.

Dividing Assets in a Divorce: Complicating Factors

This is part three of a four-part series. Click here for part one. Click here for part two.

Three significant hurdles to negotiating a divorce settlement involve mortgages, consumer debt, and retirement assets. There are more scenarios under each of these categories than I could possibly explain in a blog post, but I will attempt to explain why these assets (or lack thereof in the case of consumer debt or an underwater mortgage) complicate matters for divorcing parties.

After housing prices peaked in 2006, many folks were left with mortgage balances that are much greater than the fair market value of their marital residence. Problems associated with “underwater mortgages” are inevitably aggravated by a divorce. For example, the husband may want to allow the home to go into foreclosure, but the wife may want to remain in the home for the foreseeable future. Even if the wife can afford the mortgage payment on her own, she may not be able to qualify to refinance the mortgage. This scenario creates additional complications. The parties will need to come to some type of agreement about how long the husband is willing to remain on the mortgage. Who then claims the mortgage interest deduction if the husband remains on the mortgage? What do the parties do if the wife is unable to refinance the home?

If the parties have a substantial amount of consumer debt, they may need to consider filing for bankruptcy. A bankruptcy will impose a stay on all pending litigation (basically, it “freezes” a pending divorce action) until the conclusion of the bankruptcy. If bankruptcy is not appropriate, the parties must agree on how they would like to divide their credit card balances.

Retirement assets complicate the equitable division of the parties’ assets as well. If a portion of one party’s retirement accounts is premarital, he or she must also be able to show what the balance was at the time he or she married. Once premarital contributions are taken out, the party with the greater proportion of retirement assets may need to transfer part of his or her IRA, 401(k), or pension to the other party. Transferring these assets may also trigger tax liabilities for an early withdrawal if the parties do not follow the proper procedures.

In these types of cases, attorneys must carefully craft settlement agreements to protect their clients (the subject of Part Four in this series). Please check back next week for the conclusion of the Dividing Assets in a Divorce series.

Please contact my law office for information specific to your case. The above is for general information purposes only.