8 Ways to Fail – Things Not to Include In Your Contracts

8 Ways to Fail – Things Not to Include In Your Contracts

Generally, lawyers are decent writers. However, the legal vocation is also one of the slowest to change of any of the professions, mainly because it is steeped in tradition. Unfortunately, when it comes to drafting contracts, tradition is not always best.  Unnecessary, inaccurate, and useless terminology and phrasing creeps into legal documents and infuriates clients who expect lawyers to draft documents an average person can read and understand.

Also, most lawyers learn by imitating the habits of other, more experienced lawyers, who in turn learned their skills from even older lawyers.  For these reasons many good lawyers often produce contracts that are full of poor drafting.  This article will point out of few of the pitfalls every lawyer should consider.

  • “Herein” should be “Here-OUT” – This type of compound word should be avoided at all costs, it is unwieldy and unnecessary. “Herein” is an inherently ambiguous word because it could mean: ‘in this sentence’, in this paragraph, or ‘in this contract’.  And ambiguity is the kiss of death in contract drafting.

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Tax Consequences in Divorce

Tax Consequences in Divorce

According to expert tax accountants Accountants Australia, People often overlook the important tax implications of getting divorced.  They’re usually focused on child custody issues or division of property and fail to understand or bring up important issues that will determine the ultimate determination of how taxes will be attributed and assigned as a result of their divorce.

Important areas to think about are: division of assets, support, income tax filing, division of retirement benefits and, if applicable, innocent spouse relief.

As a foundational issues, the Supremacy clause of the U.S. constitution means that Federal Tax law will govern even in state court where divorces are heard.  That means a state court judge may not validate any agreement that contravenes federal tax law.

Let’s look at how these rules affect different parts of a divorce.

  • Division of Marital Property
  • No gain or loss.  Generally, no gain or loss is to be recognized when assets are transferred because of a divorce.  There are some rules to follow when determining whether the “transfer” was a part of the divorce.  They are:
    • The transfer is required under the divorce decree or divorce or separation agreement.
    • The transfer occurs within six months of the marriage ending
    • There is a presumption, although subject to rebuttal that a transfer was related to the divorce if it occur within six years but the party can show there were legal or business reasons for delaying the transfer.
    • Exceptions:  There are some exceptions that apply to this rule, such as where the spouse is a resident alien, some transfers related to trusts and some stock redemptions.

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