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The Top Five Traps of Representing Yourself

| Sep 6, 2013 | News

An old proverb states, “A man who is his own lawyer has a fool for a client.” While humorous, we all too often find clients coming to us with problems that have arisen as a result of their self-representation in forming a business, drafting a Will, preparing a premarital agreement, buy-sell agreement or company agreement, to name a few instances. These cases oftentimes result in substantial cost, frustration, energy and time expended to “fix” the problems, which could have been avoided by meeting with an attorney on the front end.

Accordingly, we have prepared a list of the top five traps for those considering self-representation:

1. Lacking the knowledge to know the right questions to ask yourself and/or others
a. Are there potential environmental concerns in a real estate transaction?
b. What due diligence documents should you review prior to purchasing the business?
c. What happens to your estate if a child predeceases you?
d. For blended families, are you going to treat children of your spouse the same as your own while knowing the survivor can change their mind?
e. Are there state or Federal regulations that could substantially impact your business or real estate transaction?

2. Creating a liability or circumstance that cannot be “undone” later
a. Did you miss a statute of limitations as applied to your estate, claim or business?
b. Did property intended to pass to you and/or your heirs escheat to the state?
c. Did you fail to properly or timely file estate or gift tax returns?
d. Did your document contain provisions that ultimately resulted in it being unenforceable in its entirety?
e. Many documents require signatures in certain ways to be enforceable or they are void.

3. Substantial additional costs
a. Many things that seemed like a “good deal” at the time (i.e. online will preparation or business document preparation software) can lead to substantial costs after the fact that are well in excess of the costs of hiring an attorney to prepare and/or manage the original transaction
b. A representative case in Texas that began with a homeowner representing himself against his HOA seeking the payment of a $500 repair to his condo ended with him facing a potential $68,000 judgment, inclusive of the HOA’s attorney’s fees and costs

4. Inability to foresee unexpected contingencies
a. Did you provide for the death or disability of a business partner in your company agreement or buy-sell agreement?
b. Did you foresee your wife remarrying after your death and your estate going to her new husband (not to your children) in a subsequent divorce?
c. Did you foresee changes in the estate tax laws?
d. Did you foresee a beneficiary being sued, getting a divorce or filing for bankruptcy?

5. Failing to understand the nature and substance of the documents
a. A failure to understand the technical terms of a Will, Asset Purchase Agreement or other contract can lead to devastating consequences to your business, estate and/or family, such as increased taxes, other liabilities or transfers to an unintended party

If you are considering embarking on self-representation, we would encourage you to call or schedule an appointment to visit with us to discuss the costs and benefits as applied to your specific situation.