The Tax Code is law. We are lawyers. Why, then, do we see so many agreements that say “The parties acknowledge that their attorneys have not provided any tax advice, blah, blah, blah?” Yes, it is an attempt at an exculpatory clause for the attorneys. However, did you know that such language could be used to preclude your client from tax deducting legal fees in the instances where fees are tax deductible in divorce? We learned tax law in law school. It was on the bar exam.
The Tax Code is law. We are lawyers. Why, then, do we see so many agreements that say “The parties acknowledge that their attorneys have not provided any tax advice, blah, blah, blah?” Yes, it is an attempt at an exculpatory clause for the attorneys. However, did you know that such language could be used to preclude your client from tax deducting legal fees in the instances where fees are tax deductible in divorce? We learned tax law in law school. It was on the bar exam. If you practice family law, you need to keep up a working familiarity with it, and even so, should consider consulting with tax experts so you can be sure you and your client understand all tax implications.
I have touted Mel Frumkes and his book, Divorce Taxation, in this blog. Another resource is the Family Law Taxation Blog. While it hasn’t been updated the past few weeks, I have been assured it was only because of these “taxing times” and it will be up and running again soon.
Just as important, and probably more so to your client, is to make sure your client has a tax professional to follow though after the agreement. Such expert assistance can be valuable to both of you though the divorce, and your client will benefit long after he forgets about you.
