The problem with legal forms and templates

201412.14
0

A lot of everyday people like purchasing legal forms for things like leases, wills, powers of attorney, divorce agreements, etc. A lot of lawyers tell clients that forms are bad or that clients need to avoid using them. Most people think that lawyers oppose the use of legal forms because the lawyers lose business. And there is probably some truth to this.

However the real reason that many attorneys advise against over-reliance on forms is that most people don’t fully understand how to use them.

Here is an example. A husband takes on the task of preparing the separation agreement for him and his wife. The agreement is a form agreement pulled off the internet that addresses all of the issues: spousal support; division of bank accounts, the house, and division of retirement accounts. The husband and wife both sign the agreement. The divorce is finalized. However, months later there are issues.

1. The language in the agreement dividing the retirement accounts is the same kind lawyers use – but its language for an entirely different kind of retirement account than the one that husband has. So there is a major question as to where things go from here. Does this mean that husband’s actual retirement account is not divided (and the wife loses her share)? Or should the parties look to the intent of what they were trying to do? Either way, they need a new agreement on this issue. And if the spouses don’t agree on how to proceed, then they may have to have a judge sort it out for them.

2. The parties agreed that the wife would buy out the husband’s interest in the marital home and refinance the mortgage in her name only (it was in both their names). The only problem? Nobody thought to put a deadline for all of this to happen into the agreement. Now the wife is saying she needs several more months to try and secure a new loan. However, the husband is looking at purchasing a new place of his own and can’t do it until his name is off the old loan.

Now the husband and wife in this hypothetical scenario are in a position where they will have to hire attorneys. They also face the very real possibility that it may cost more to clean up the loose ends left by the form agreement than it would have cost to simply have had the agreement done right the first time. Further, depending on the nature of the mistake, it is possible that one side may lose out on some significant issues. This is the hidden cost of form agreements that many clients fail to see until it is too late.