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Robert S. Duxstad
Daniel P. Bestul
Lance A. McNaughton

Why Wait? Early Advice Can Avoid Costly Mistakes

Posted: 5.30.2019  |  Author: 

In comedy, they say, timing is everything.  The same can be true when it comes to getting help from a lawyer.

 

A new client came in to talk about a divorce that was "almost done".  The parties had been handling things on their own for quite a while and put together an agreement that both thought they could live with.  The other party decided to have the agreement reviewed by a lawyer (something, by the way, I encourage everyone to do).

 

After meeting with the lawyer, the other party sent an e-mail, declaring the deal was off; the agreement was unfair, and no judge would ever approve it.

 

My client felt betrayed, both because the other party backed out of the deal, and because the e-mail the other party sent came off as a personal attack. My client was angry, and ready to go to war.

 

I gave the other lawyer a call to discuss the case.  I learned there were some important considerations that the previously unrepresented parties had overlooked, and the plan they had developed had the potential for economic disaster.  A bad outcome was by no means guaranteed, but the other attorney felt a duty to steer the client away from the danger.

 

After the call, I did my best to explain things to my client. We eventually put together an agreement to resolve the case, but my client continued to feel hurt and betrayed by the way things played out.  It’s a feeling that is likely to linger, long after the lawyers drop out of the picture.

 

Both parties had negotiated in good faith, and both believed the original agreement was a good one.  Had they followed through with the agreement, the potential disaster might never have happened.  And while my client felt that the other attorney had unnecessarily stirred up conflict, I don't think that was the case; the attorney’s job was to protect the client, and that included pointing out the potential for disaster.

 

If attorneys had been involved earlier in the process, we might have identified the problem before a "final" agreement was put down on paper.  The terms of the agreement might not have been any different, but the process of getting there would not have been anywhere near as bumpy.  We might have been able to avoid the resentment that comes when a tentative agreement falls apart.

 

In another case, the parties put together an agreement that included, in part, dividing an interest in a retirement plan.  They got a form from the retirement plan administrator, filled it out to their best ability, and presented the form to the judge for approval.  The judge cautioned them about the complexities of retirement accounts and deferred accepting the agreement until they had a chance to have a lawyer review it.

 

It was a good thing he did.

 

The form the couple used to divide the plan included a paragraph on what would happen if either party were to pass away before the plan benefits became payable.  They thought they were making a wise choice, but the language they selected on the form would have resulted in the unnecessary loss of many thousands of dollars.

 

The form didn't explain this is what would happen. In fact, the couple had interpreted this section of the form to do exactly the opposite.  A last-minute check-in with an attorney set things right.

 

Sometimes, it's too late to fix things.  In another case, the parties negotiated an agreement that had significant tax implications.  They intended to take advantage of some tax benefits and included language in their agreement that ordinarily would have provided that benefit.  However, other seemingly routine language they included triggered additional IRS rules.  These rules wiped out most of the benefit they were trying to create. Unfortunately, they only became aware of this after the IRS rejected their tax returns, far too late to change the agreement.

 

With the availability of online forms and other resources, many people want to go it alone in family law cases. This is understandable, but also can be dangerous.

 

Bringing a lawyer on board early to identify potential issues and formulate options can save time and money.  It can also help prevent misunderstandings and the bitterness that can come when a tentative agreement falls apart.Limited scope representation – – allowing parties to consult with an attorney for advice and coaching, without necessarily bringing them on board for full scope representation – – is one avenue to avoid danger and mistakes.

 

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