The bold print giveth, and the fine print taketh away...

One thing I knew growing up was that there are a lot of documents to sign in any important purchase you make, including a house and a car, because I had to sit and watch my mom and dad sign papers for what seemed like an eternity.  Then, I realized how many documents there really are when my husband and I purchased our own home and vehicles.  I have never had the luxury of purchasing an RV, a boat, or a motorcycle, but I think there are probably several documents to sign in any setting such as that, especially when getting a loan to purchase them.  However, I didn't know until I got a job, how much paperwork that includes.  I never thought about how many documents are included in starting my own business, or adding an addition on to my house or borrowing against the equity in my house or my car, or when purchasing insurance until I actually did those things.  There are a lot of things that people get every day, a bank account, a credit card or department store card, a membership somewhere, etc.  We just go about our normal everyday lives and figure we want the thing we are purchasing badly enough and usually we feel rushed, that we don't actually read all of the documents, especially the fine print.  I think most of us are taught, just sign the bottom line and your purchase is complete.  There is a slogan that I heard recently that said "the bold print giveth, and the fine print taketh away."  I spoke to my lawyer about a payment that was misplaced for a credit card one month on my credit report and she said "you remember the paperwork you signed when you got the credit card? especially the tiny print that nobody ever reads? that tiny print actually says they can do that."  That tiny print cost me a few points on my credit report.  Even my lawyer said nobody ever reads the tiny print.  This incident and the slogan got me thinking about all of the things that we purchase and how a lot of people don't use an attorney to look over these documents to be sure they are not getting jipped or taken advantage of because most of us can't afford one, or we don't feel we have enough time and we don't want to bother someone else to look over something we are purchasing.  Review of documents can also become necessary if legal matters happen to come up in your life, say someone sues you, you get audited, or you have to have a foreclosure or file bankruptcy.  But, lets just say for instance you happened to have an unlimited supply of funds and an attorney who would look over any and all documents whenever you want to purchase something, what would be included.  I went in search of just what might be included and how much it might actually cost and found the following information.

Document review (also known as doc review) is a task performed by attorneys in anticipation of legal proceedings or during the discovery phase of litigation. Document review requires the attorneys to assess the relevance and/or responsiveness of documents, using knowledge about the facts of the case and the issues of law. Later stages of document review (sometimes called privilege review or second level review) consider whether a document is privileged (on the basis of attorney-client communication and/or work product) and may be either withheld from production or redacted for content. Some law firms also utilize document reviewers to do more substantive work, depending on the experience of the reviewer. The actual review of the documents is performed either electronically (e-mails, files, scanned copies of documents) or manually.

Document review is often performed by temporary, or contract attorneys. The hourly rate for such attorneys depends heavily on the metropolitan area in which the project is located, the particular client for the project, the agency which staffs the project, and law firm performing the review. The pay can vary anywhere from $20 to $55 per hour, which is influenced by a variety of factors from geographic location, subject matter of the case and scope and length of the review. Projects requiring specialized knowledge or fluency in a foreign language can reach $50 to $90 per hour. Some projects increase the hourly rate for overtime hours worked; some do not. Projects can range in length from a few days to several years.

Document review projects are located throughout the United States, most commonly in New York City, Philadelphia, Washington, D.C., Chicago, Grand Rapids, Michigan, Phoenix, Kansas City, Columbus, San Francisco, Los Angeles and Newark. Document review projects may also be outsourced from United States law firms to Asian countries, most notably India, in an attempt to cut costs.

Document reviews also take place throughout Canada. These are done within the law firms themselves utilizing various review software, or by using legal service providers to host data, which can then be reviewed online via the internet. Review software offers editing capabilities and the choice is whether to invest in review software or pay a service provider to host the data, and also to maintain it - reducing IT maintenance costs and infrastructure.

I realize the document review this is talking about is more for business situations and reviewing all kinds of documents for legal cases against the company, but lawyers do offer document review at a similar rate for regular folks too, it just isn't something that is utilized very often.

I think in our rushed society, we don't really think about this option of someone reviewing important documents for us before signing.  Attorneys really don't find it useful to promote this option for people either, as most attorneys don't get a lot of call for document review from the average Joe... It is no wonder most of us just sign the bottom line and go on with what we purchased. 

A company called Prepaid Legal Services came up with a grand idea, however, to include document review by the member's provider law firm with their monthly service charges of $17/month or $26/month.  With their contract and document review... you can have an unlimited number of personal legal documents, up to ten pages each, reviewed by your provider lawyer.  Included each year is one business document review at no additional cost!  Your provider lawyer will analyze the documents and suggest changes for your benefits before you sign.

Any way you look at it, if you are going to have to have someone look at the documents you are getting ready to sign (besides yourself), an attorney would be the logical option.  Whether you sign up for the member benefits of Prepaid Legal Services and have documents reviewed very often or not, this would by far be the less expensive route to be sure that you don't end up with something that you didn't want.  The best way to avoid having to have someone review documents for you almost completely of course is to pay cash for everything.  It is amazing how much less paperwork there is with that option. 

Hopefully this information has been helpful if you decide you do need documents reviewed in knowing how much it could potentially cost, what might be included for you, and who might be reviewing them too.  I prefer the game of Life, rather than the real thing sometimes, because you can start over and decide to make better choices the next time you play.  However, I can't go back and start over in real life, so I just need to remember every day is a new day, I can make the best choices from now on... If I make a mistake, tomorrow is another new day!

-Melinda

Are Attorney's Fees Tax Deductible?

I don't think most of us sit around and think about how much an attorney costs these days, let alone whether what we pay them is tax deductible.  However, in a day and age where everyone is sue happy and the government is trying to take every little piece of our income anyway, it might be a good thing to be able to take a deduction off of our taxes if any of these situations were to arise.  I found this information on lawyers.com and felt it would be good information to pass on. 

If you haven't been there yet, and without jinxing your luck, the odds are good you're going to need legal advice some day. Maybe you're thinking about filing bankruptcy, or you need help writing a lease for the house you want to rent.

Regardless of why you need an attorney, you're going to have to pay for the lawyer's legal services. Can you take a tax deduction for those attorney's fees? Usually not, but there are some exceptions.

General Rules

The general rule is simple enough: You can deduct attorney's fees you pay for:

·         Trying to produce or collect taxable income, or

·         To help in determining, collecting or getting a refund of any tax

In simple terms, you can take a deduction if you need an attorney's help to make money you have to pay taxes on, or if an attorney helped you with a tax matter, like representing you in an IRS audit. If the legal fees are somehow connected to taxes or taxable income, you can take a deduction.

Is There a Deduction?

There are all kinds of situations that qualify for the tax deduction, such as fees you may pay for:

·         Tax advice you may get during a divorce case, such as how you and your ex-spouse will take deductions for home mortgage interest or child care, or whether alimony is tax deductible by the payor spouse or taxable income to the recipient spouse

·         Trying to get your ex-spouse to pay past-due alimony

·         Defending a lawsuit filed against you on work-related matter, such as an unlawful discrimination claim filed by a former employee that you fired

·         Receiving your share of a class action settlement in a lawsuit against your employer or former employer. For example, your former employer settles a class action claiming that it didn't pay overtime wages. You get a $1,500 check for your share of the settlement, but $2,000 is reported to the IRS as income because you're charged $500 as your share of attorney's fees. Because the income is work-related, you can take a tax deduction for the $500 in fees

Generally, you can't deduct fees paid for advice or help on personal matters or for things that don't produce taxable income. For example, you can't deduct fees for:

·         Filing and winning a personal injury lawsuit or wrongful death action - the money you win isn't included in your gross income and so it's not taxable

·         Settling a will or probate matter between your family members

·         Help in closing the purchase of your home

·         Defending you in a civil lawsuit or criminal case that's not work-related, such as defending you on a drunk driving charge or against a neighbor's claim that your dog bit and injured her child

How and How Much?

Generally, you deduct attorney's fees as an itemized miscellaneous deduction on Schedule A of your Form 1040 tax return. You may not be able to deduct all of your fees, though. Miscellaneous deductions are limited by the two percent rule: You can deduct only the amount of your miscellaneous deductions that's more than two percent of your adjusted gross income (AGI) - the amount you entered on line 38 of your 1040.

Have a Business?

As a business owner, you can take a deduction for the same things discussed above. If you pay an attorney to prepare your taxes or to help the business make money, you can deduct the fees. For example, you can deduct fees paid for:

·         Collecting money that's owed to you by a customer

·         Defending you or an employee in a lawsuit over a work-related claim, such as a discrimination lawsuit filed by a former employee

·         Negotiating or drafting contracts for the sale of your goods or services to customers

Also, you can usually deduct attorney fees you paid in connection with starting up your business or buying an existing business.

Generally, you deduct these business-related expenses the same way you deduct other ordinary and necessary business expenses. You need to file Schedule C with your 1040 tax return.

Check with Your Lawyer

If you're concerned about whether you'll be able to deduct attorney's fees, you can always ask your attorney - before she does any work for you - if any of the fees she'll charge are tax deductible.

Also, ask your attorney to prepare a billing a statement that shows clearly what part of her fees is deductible. So, for example, if you're involved in a divorce, your lawyer's billing statement should show how much time she spent working on how the divorce will impact your taxes. It should be separate from the other nontax divorce issues, like the time spent drafting the divorce papers.

Questions for Your Attorney

·         My employer hired an attorney to defend me in a discrimination suit. I don't like the way he's handling the case. If I hire you to defend me, can I deduct your fees on my taxes?

·         I'm going to file a small claims complaint against my ex-husband to get him to pay alimony that's long past due. Can I take a tax deduction for the costs of filing the complaint and the wages I lost for having to take off work to research the case, file it and go to court?

·         Can I deduct the fees you charged me for suing the person who claimed to hold a deed the house I was buying and clearing my legal title to it? Does it matter that I use part of the home as home office?

 

 

In this day and age it isn't IF you will need an attorney, but WHEN.  I hope if legal issues ever come up in your life, these questions and answers will be helpful for you, but I hope you first will give all of your issues and trials to God, as He is the ultimate judge. 

"I said in mine heart, God shall judge the righteous and the wicked; for there is a time there for every purpose and for every work." - Ecclesiastes 3:17


May God Bless You Today and Always!

- Melinda

How do I find the legal representation I need quickly?

When your car runs out of gas like mine did yesterday at a busy intersection in our town, you hope there is a gas station nearby.  If your car actually breaks down, you still need to get to school or work, you may need a mechanic to get you back on the road. When you're not feeling well, you may need to see your doctor to get you back on your feet.  When a storm passes by and causes a tree to fall or part of your roof to be damaged, you may need a tree trimmer, carpenter and/or roofer.  Okay... you get the idea...

I don't really sit and think about all of the different occupations that are out there, but as soon as I have a problem that needs their assistance I do.  Having a legal problem is no different.  Whether it be a car or health problem, or any variation of problems that can pop up unexpectedly, you never know when a legal problem may pop up and you need help quickly.  If you get sued, get a ticket for a traffic violation, or have some other legal matter suddenly in your life, you need to find a lawyer. But how do you choose the lawyer that's right for you and your case?  Sure you can look in the yellow pages or on the Internet, go off of a friend's suggestion, or even call a lawyer you used in a different specialty of law and see who they would suggest for your new situation, but how do you ultimately find the one that's right for you?  Don't just rush into your decision...

Here is a checklist of basic questions to ask before you hire a lawyer:

The Lawyer's Experience

·         How long have you been practicing in this field or area of law?

·         Have you ever handled matters like mine before?

Managing the Case

·         What are the possible outcomes of my case?

·         What are my alternatives in resolving the matter?

·         Approximately how long will it take to resolve?

·         Do you recommend mediation (a discussion intended to produce an agreement) or arbitration (the process of bringing a dispute before a disinterested third party for resolution)?

·         How will you let me know about what's happening in my case?

·         What kind of approach will you take - aggressive and unyielding, or will you work to reach a reasonable settlement?

Legal Fees & Costs

·         What are your rates and how often will you bill me?

·         What is a ballpark figure for the total bill, including fees and expenses?

Who Will Do the Work?

·         Who else in your law office will work on my case?

·         Can junior attorneys or paralegals in the office handle some of legal work at a lower rate than what you charge?

The answers you get to these questions should give you a good idea if the attorney you're talking to is the one you should hire to solve your legal problem. 

In 1972 a company made its debut to help in this legal search process called Prepaid Legal Services.  With more than 2000 law firms across the United States and Canada, this company offers to its members an opportunity to call in to one of the provider law firms and speak with a representative who will then place the member's question or legal matter into a database to be answered by the lawyer that will be best suited for their issue.  By the end of the business day the member will receive a phone call back from a lawyer knowledgeable in the specialty of law for their specific needs.  These services are available for a small monthly fee ($17-$26/mo), and make it possible to have an attorney available when life brings legal matters to your door even in emergency situations, 24 hours a day, 7 days a week.  You should still feel free to ask the questions listed above to make sure the correct lawyer has been chosen for your specific need.

Just as your mechanic is there to fix your car, your doctor to fix your ailments, a gas station open when you need to fill up your car, and all of the other little problems that can escalate quickly in life, whether you choose to go with the Prepaid Legal option or go on your own, you will now be prepared to find the lawyer that will suit your needs when legal issues happen.  The right lawyer makes all of the difference when your family or your property are at stake. 

- Melinda