Professor Michael H. Hoeflich, PhD, Editor-in-Chief
Carrie E. Parker, Legal Editor
Luzianne Jones, Design & Publishing Editor

PUBLISHED BY: Joseph, Hollander & Craft LLC

PUBLICATION DATE: May 29, 2026

READ & DOWNLOAD FULL-TEXT PDF OF LEMR Vol. 7, No. 5

FEATURE ARTICLE: ABA Formal Opinion 523

On May 20, 2026, the American Bar Association Committee on Ethics and Professional Responsibility issued Formal Opinion 523. It discusses the complexities of Model Rule 1.16(b)(5) (KRPC 1.6(b)(3))—the provision of the Rules that permits lawyers to withdraw from a representation when “the client fails substantially to fulfill an obligation to the lawyer regarding the lawyer’s services and has been given reasonable warning that the lawyer will withdraw unless the obligation is fulfilled.”

As the Opinion notes, the provision is invoked most frequently when a client fails to meet financial obligations, but the rule but is not limited to instances when a client fails to pay as promised:

. . .

READ THE FULL ARTICLE

AUTHORITY: ABA Formal Opinion 482

For anyone who hasn’t noticed, the weather in the United Sates in the past few months has been extreme. Weather forecasters have predicted that the next few months will be filled with hurricanes, tornados, severe thunderstorms, wildfires, and flooding of Biblical proportions. While many people will convince themselves that they don’t need to take precautions and prepare, lawyers must. This is the perfect time to remind lawyers that the ABA issued Formal Opinion 482 in 2018, setting forth various obligations lawyers have before, during, and after natural disasters.

This publication provided a guide to Opinion 482 in LEMR in August 2023, so we shall not repeat those issues we discussed then. But the provisions on lawyers’ obligations to be prepared for natural disasters is worth highlighting again today. The Opinion begins by reminding lawyers that the ABA has a Standing Committee on Disaster Response and Preparedness and a website filled with resources:

Much information is available to lawyers about disaster preparedness. The American Bar Association has a committee devoted solely to the topic and provides helpful resources on its website. These resources include practical advice on (i) obtaining insurance, (ii) types and methods of information retention, and (iii) steps to take immediately after a disaster to assess damage and rebuild.

The website is an incredibly valuable source for information on the ethical obligations of lawyers to protect client interests in disaster situations.

Among the most important aspects of preparing for a disaster is planning to protect client files. In 2012, many saw the frightening sight of law firm files floating down New York streets after Hurricane Sandy flooded basement and subbasement file storage areas. Opinion 482 specifically addresses this problem. First, it highlights the dangers of only having on-site file storage:

Some lawyers located in an area affected by a disaster may have their files destroyed. Lawyers who maintain only paper files or maintain electronic files solely on a local computer or local server are at higher risk of losing those records in a disaster. A lawyer’s responsibilities regarding these files vary depending on the nature of the stored documents and the status of the affected clients.

Under the lawyer’s duty to communicate, a lawyer must notify current clients of the loss of documents with intrinsic value, such as original executed wills and trusts, deeds, and negotiable instruments. Lawyers also must notify former clients of the loss of documents and other client property with intrinsic value. A lawyer’s obligation to former clients is based on the lawyer’s obligation to safeguard client property under Rule 1.15. Under the same Rule, lawyers must make reasonable efforts to reconstruct documents of intrinsic value for both current and former clients, or to obtain copies of the documents that come from an external source…

To prevent the loss of files and other important records, including client files and trust account records, lawyers should maintain an electronic copy of important documents in an off-site location that is updated regularly. Although not required, lawyers may maintain these files solely as electronic files, except in instances where law, court order, or agreement require maintenance of paper copies, and as long as the files are readily accessible and not subject to inadvertent modification or degradation. As discussed above, lawyers may also store files “in the cloud” if ethics obligations regarding confidentiality and control of and access to information are met.

[Emphasis added].

As we approach storm season, it is good to review our record keeping methods. Two versions are always better than one. Off-site locations are always necessary in addition to onsite locations. Disaster insurance may well be. They can make the difference between financial disaster for the lawyer or and reasonable recovery.

ETHICS & MALPRACTICE RESEARCH TIP: New Articles on Legal Malpractice & Ethics

1.) Angela A. Davis, “Undermining Discretion: The Selective Attacks on Progressive Prosecutors’” 47 Cardozo L. Rev. 579 (2026).

2.) Bruce A. Green & Jessica A. Roth, ”Subordinate Prosecutors’ Independence’” Symposium Issue: Prosecutorial Independence. 55 Stetson L. Rev. 237 (2025).

The dangers, ethical and systemic, in the increasing attacks on prosecutors demands attention by the Bar.

3.) Carol A. Needham, “Regulation of the Use of Generative Artificial Intelligence Tools in the Delivery of Legal Services: Verification and Accountability,” 77 Wash. U. J. L. & Pol’y 184 (2025).

Needham discusses one of the leading ethical and practical problems facing lawyers today.

A BLAST FROM THE PAST: Pumroy on the connection between government, and science and literature

In our country, mind sits enthroned in its mightiest power. Its achievements and triumphs have been brilliant. This is the result of civil liberty. Civil liberty is natural liberty, so far restrained by human laws and no farther, as is necessary and expedient for the general advantage of the people. The law which restrains a man from doing mischief to his fellow citizens, though it diminishes the natural, increases the civil liberty of mankind. Our government leaves the citizen entire master of his own conduct, except in those points in which the public good requires some direction or restraint.

— John N. Pumroy, The Annual Address delivered before the Diagnothian and Goethean Literary Societies of Marshall College, Mercersburg, Pa., on the connection between government, and science and literature (September 8, 1846).

READ & DOWNLOAD FULL-TEXT PDF OF LEMR Vol. 7, No. 5

About Joseph, Hollander & Craft LLC

Joseph, Hollander & Craft is a mid-size law firm representing criminal defense, civil defense, personal injury, and family law clients throughout Kansas and Missouri. From our offices in Kansas City, Lawrence, Overland Park, Topeka and Wichita, our team of 26 attorneys covers a lot of ground, both geographically and professionally.

We defend against life-changing criminal prosecutions. We protect children and property in divorce cases. We pursue relief for clients who have suffered catastrophic injuries or the death of a loved one due to the negligence of others. We fight allegations of professional misconduct against medical and legal practitioners, accountants, real estate agents, and others.

When your business, freedom, property, or career is at stake, you want the attorney standing beside you to be skilled, prepared, and relentless — Ready for Anything, come what may. At JHC, we pride ourselves on offering outstanding legal counsel and representation with the personal attention and professionalism our clients deserve. Learn more about our attorneys and their areas of practice, and locate a JHC office near you.

The post Legal Ethics & Malpractice Reporter, Vol. 7, No. 5 appeared first on Home.

Author: Professor Michael H. Hoeflich, PhD, Editor-in-Chief

Legal Editor: Carrie E. Parker

This article is featured in Volume 7, Number 5 of the Legal Ethics and Malpractice Reporter, published May 29, 2026.

On May 20, 2026, the American Bar Association Committee on Ethics and Professional Responsibility issued Formal Opinion 523. It discusses the complexities of Model Rule 1.16(b)(5) (KRPC 1.6(b)(3))—the provision of the Rules that permits lawyers to withdraw from a representation when “the client fails substantially to fulfill an obligation to the lawyer regarding the lawyer’s services and has been given reasonable warning that the lawyer will withdraw unless the obligation is fulfilled.”

As the Opinion notes, the provision is invoked most frequently when a client fails to meet financial obligations, but the rule but is not limited to instances when a client fails to pay as promised:

Rule 1.16(b)(5) is most often invoked when the client fails to fulfill an obligation regarding legal fees or expenses. However, clients may assume other obligations that may be made explicit in the engagement agreement, such as the duty to cooperate with the lawyer regarding the representation nor to provide and update the client’s contact information.

The first significant point of Opinion 523 is this paragraph’s focus on the lawyer-client engagement agreement. The engagement agreement is the memorialization of the “deal” between the layer and client. As such, its provisions are critical. Even so, the Rules do not specify what its contents should be. While the lawyer and client cannot agree to obligations that violate the Rules, they can agree to a wide range of provisions and self-impose obligations. Opinion 523 explains:

The lawyer’s engagement agreement may specify obligations of the client that are otherwise implicit in the representation, such as the obligation to cooperate with the representation, including in a litigation context the duty to produce discoverable documents within the client’s custody and control. Other such implicit obligations include the client’s obligation to communicate with the lawyer, to provide information truthfully, and to provide or to execute documents that are necessary for the lawyer to conduct the representation as the law requires.

Within ethical limits, the engagement agreement may also set forth obligations of the client that are not otherwise implicit. For example, a lawyer may include a provision in which the client agrees not to make an audio or a video recording of communications between the lawyer and the client, or not to discuss the lawyer or the representation on social media during the course of the representation.

While specifically listing mutual obligations in the engagement agreement may make subsequent withdrawal easier, an explicit mention in the agreement is not necessary. As the opinion notes:

a lawyer may withdraw based on the client’s substantial failure to cooperate with the representation, regardless of whether that obligation is made explicit in the engagement agreement or left implicit, as long as the lawyer has given the requisite “reasonable warning.”

Still, memorializing issues that seem to form repeated bases for withdrawal is certainly prudent.

Opinion 523 notes that there are provisions that might seem reasonable to a lawyer, but that will not justify withdrawal even if the client agrees. For instance:

A lawyer may not withdraw based on Rule 1.16(b)(5), however, if the client fails to comply with an obligation that is not one “regarding the lawyer’s services.” For example, a client’s obligation to pay a prior debt to the lawyer that is unrelated to the lawyer’s services is not an obligation “regarding the representation.” Therefore, the client’s failure to repay the prior debt would not justify the lawyer’s withdrawal under Rule 1.16(b)(5).

Further, a lawyer may not withdraw under Rule 1.16(b)(5) based on a client’s noncompliance with a trivial obligation or based on a client’s insubstantial failure to comply with an obligation set forth in the engagement agreement. For example, if the engagement agreement obligates the client to appear at scheduled office appointments on time, tardiness probably would not alone justify terminating the representation, if the client has reasonable excuses for appearing late.

These exceptions to a lawyer’s general freedom to include anything in the engagement agreement (other than provisions that violate the Rules or other law) make sense. The first is simply interpretive of the text of Rule 1.16, which specifically requires that the reason for withdrawal be “regarding the lawyer’s services” to the client (i.e., the reason for withdrawal must relate to the representation). The second rule also is interpretive. The text of the Rule requires that the client’s failure be “substantial.” A trivial failure (e.g., being a few hours late with a payment) will not generally be a justification for withdrawal.

The Opinion concludes:

Rule 1.16(b)(5) of the ABA Model Rules of Professional Conduct permits a lawyer to withdraw from a representation, or to seek the tribunal’s permission to do so, when “the client fails substantially to fulfill an obligation to the lawyer regarding the lawyer’s services and has been given reasonable warning that the lawyer will withdraw unless the obligation is fulfilled.” This provision is ordinarily invoked when a client fails to fulfill an obligation regarding payment of legal fees and expenses. The engagement agreement may memorialize additional obligations of the client, both obligations that are otherwise implicit such as the client’s truthful cooperation with the representation, and further obligations insofar as they are not forbidden by the Rules, other law (including court rules), or public policy. A client’s persistent failure to fulfill obligations regarding the lawyer’s services, including obligations unrelated to payment of fees and expenses, may constitute a basis for withdrawal if the procedural requirements of Rule 1.16(b)(5) are satisfied.

Further, the lawyer’s engagement agreement may put the client on notice of permissible grounds for withdrawal under Rule 1.16(a) and (b), including the clients’ failure to fulfill obligations regarding the lawyer’s services. However, the engagement agreement may not expand on the grounds for withdrawal set forth in Rule 1.16 or mislead the client regarding the legitimate grounds.

The Opinion focuses on voluntary withdrawal under Rule 1.16, but it offers a lesson that is much broader in scope. It reminds lawyers of the importance of engagement letters. For younger lawyers and others just entering practice, the importance of well drafted engagement letters may not be appreciated. Opinion 523 is an important corrective to this.

READ THE FULL ISSUE OF LEMR, Vol. 7, No. 5

About Joseph, Hollander & Craft LLC

Joseph, Hollander & Craft is a mid-size law firm representing criminal defense, civil defense, personal injury, and family law clients throughout Kansas and Missouri. From our offices in Kansas City, Lawrence, Overland Park, Topeka and Wichita, our team of 25 attorneys covers a lot of ground, both geographically and professionally.

We defend against life-changing criminal prosecutions. We protect children and property in divorce cases. We pursue relief for clients who have suffered catastrophic injuries or the death of a loved one due to the negligence of others. We fight allegations of professional misconduct against medical and legal practitioners, accountants, real estate agents, and others.

When your business, freedom, property, or career is at stake, you want the attorney standing beside you to be skilled, prepared, and relentless — Ready for Anything, come what may. At JHC, we pride ourselves on offering outstanding legal counsel and representation with the personal attention and professionalism our clients deserve. Learn more about our attorneys and their areas of practice, and locate a JHC office near you.

The post ABA Formal Opinion 523 appeared first on Home.

Are Inheritances Protected in a Kansas City Divorce?

One main area of contention during a divorce is equitable division of assets. Family law courts are concerned with how to account for the contributions that both spouses have made over the course of the marriage. All marital property will be divided in the divorce.

Separate property, however, is not included in a divorce settlement–although it may still be taken into consideration when deciding alimony and child support matters. Inheritances are generally considered to be separate property under Missouri and Kansas state law, regardless of when the inheritance takes place, either before or after the marriage. Under Missouri Revised Statutes § 452.330, property acquired by “gift, bequest, devise, or descent” is presumed to be separate.

However, courts can evaluate how the inheritance was treated during the marriage. At times, your actions during the course of the relationship can convert a separate inheritance into shared marital property.

How Inherited Assets Can Become Marital Property

There are several ways by which an inherited asset can come to be considered marital property by a family law court in Kansas City. They include:

Commingling Inherited Funds

If you deposit inherited funds into a shared account, then a judge may consider that action to be commingling. In this case, a separate inheritance can be converted into marital property. Another example might be using an inheritance to pay down shared debt.

Using Inherited Funds to Purchase Shared Assets

When an inheritance is used to purchase a shared vehicle or a marital home it may be considered commingled. If the shared asset has a deed in both of the spouses’ names, it will likely be considered to be marital property. Likewise, if you used your inheritance to invest in shared securities or other financial products, the interest accrued may be considered marital property.

Using Inheritance for Marital Expenses

If one spouse used their inheritance to make improvements to the marital home or to a shared vacation house, the inheritance may no longer be considered separate property.

Significant Improvements or Labor Done During a Marriage to an Inherited Asset

If a spouse has contributed significantly to a property during the course of a marriage and the asset has grown in value due to their efforts, this added value may be considered marital property.

Say one spouse inherits a property before or after the marriage, but the two spouses run it together as a rental property. If the other spouse was in charge of repairs, maintenance, and bookings for the property, then the updated value of the rental may be considered marital property, even though the initial asset was inherited.

Inherited Real Estate and Family Property in Divorce

Inherited real estate does not always stay separate property, depending on how it was used during a marriage. An inherited house that becomes a second home or a shared business, for instance, may be converted into marital property. Likewise, when one spouse joins a family business, there may be complications if the spouse worked for the business or invested their own money into the enterprise.

Inheriting Shares or Ownership in a Family Business

If one spouse has inherited partial ownership or a controlling interest in a closely held family business, the other may try to claim that the family company is a shared asset. In fact, business valuation issues in divorce occur more often than you might think. Whether the ownership interest remains separate property is often decided by a family law judge who is persuaded by one spouse’s divorce attorney. For instance, how business income or dividends were treated during the marriage may inform what is considered marital property during a divorce. Examples include if shares in a family company were used to support the other spouse’s lifestyle, or if one spouse advised the other about business decisions. There may also be buyout concerns if the ownership becomes disputed. This can affect who controls your legacy, your employees’ well-being, as well as your family members’ future livelihoods after a divorce.

How Trusts Are Treated in a Kansas City Divorce

The difference between trust ownership and trust beneficiary interests is often based on how the trust was established as well as who funded it. A revocable or living trust may have been created by either of the spouses during the course of the marriage. In this case, assets put into the trust, whether designated for the spouses’ use or for future children, may still be considered marital property.

By contrast, an irrevocable trust is more protected during a Kansas City divorce. If a parent or grandparent established an irrevocable trust for an inheritance and funded it on behalf of one spouse, then those assets are more likely to be considered fully separate property. In this case, the inheritance will not be subject to division at the dissolution of a marriage.

Some trust provisions may limit access to assets during a divorce. If a discretionary trust is ruled to have been created solely to shield assets from a spouse, then the court may consider that amount during the course of equitably dividing property. A family law judge may rule that the assets within a trust be included for division if it appears that the trust was created in preparation for the divorce or with intent to shield assets from division in a divorce.

When Trust Distributions May Become Marital Property

If distributions from a trust were not kept in a separate account or were used for shared expenses, like car payments, private school tuition, health care, vacations, or a wedding, then the trust may be jeopardized as separate property.

Asset Tracing in High-Asset Kansas City Divorce Cases

Asset tracing has only become more complicated in recent years with the rise of cryptocurrencies and other shielded assets. Asset tracing is crucial to create a comprehensive financial picture. In some cases involving especially high asset divorces, you may need the assistance of forensic accounting and professional appraisers.

How a Kansas City Divorce Attorney Protects Your Inherited Wealth and Assets

A family law attorney in Kansas City can protect inherited wealth with a premarital agreement prepared well in advance of a contentious divorce. In the event that there is a dispute over a prenuptial or postnuptial agreement, a divorce attorney in Kansas City can advise you about how best to proceed to protect your assets. Negotiations through a skilled and professional family law attorney can depersonalize the proceedings and assist you both to come to a satisfactory conclusion.

When to Speak With a Kansas City Divorce Lawyer About Inherited Assets

Disputes over inherited assets can quickly become complex during a divorce, particularly when questions arise about commingling, trust structures, or business interests. In many Kansas City divorce cases, these issues are not always obvious at the outset of the divorce process, which is why it is important to involve a divorce lawyer early.

You should consider speaking with a Kansas City divorce lawyer if:

• Asset classification is unclear: One spouse claims inherited assets should be included in property division.
• Commingling may have occurred: Inherited funds were deposited into joint accounts or used for shared expenses.
• Trusts are being questioned: A trust’s structure or distributions may be scrutinized in divorce proceedings.
• Business interests are involved: Inherited ownership in a family business raises valuation or control issues.
• Documentation is incomplete: Financial records may be needed to trace inherited assets and protect your legal rights.

A knowledgeable attorney can evaluate how inherited funds were used, whether assets were commingled, and how courts may approach these issues in a Kansas City divorce. An attorney can also work with financial professionals to ensure assets are properly traced and classified.

Working with an experienced Kansas City divorce attorney and a trusted law firm allows you to develop practical, strategic solutions to protect inherited wealth. Whether through negotiation or litigation, your attorney can help you navigate the divorce process with a focus on preserving assets and reaching a fair outcome.

Speak With a Kansas City Divorce Lawyer About Your Assets

If you have questions about protecting your inherited assets, contact a Kansas City divorce attorney with Joseph, Hollander & Craft today. Our team has experience protecting inheritances and trusts during Kansas City divorces, as well as the know-how to account for a full financial picture during the process. We maintain offices in Kansas City, Lawrence, Overland Park, Topeka, and Wichita for your convenience.

Reviewed by an Award-winning attorney at Joseph hollander & Craft

Carrie E. Parker

Carrie E. Parker is a criminal defense and civil litigation attorney located in Lawrence, KS. Ms. Parker represents individuals and businesses during the investigation and prosecution of criminal charges in federal and state courts. She also represents businesses and individuals in complex civil litigation and property holders seeking the return of assets seized for forfeiture. […]

Read More →

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Webinar Time: 12:00–12:50 p.m.

Location: Zoom

Please join your Kansas and Missouri Bar colleagues for a complimentary CLE webinar: Ethics in Lawyer Litigation of AI Suits

Sponsored by Joseph, Hollander & Craft LLC

Approved for 1.0 hour of ethics CLE credit in Kansas & Missouri

REGISTER NOW

Resources

• • PARTICIPATION GUIDE

Program Description

As generative AI tools become more common in legal practice, so do the cautionary tales. This webinar takes attorneys inside the real-world disciplinary actions, sanctions, and public missteps that have emerged when lawyers relied on AI without adequate verification. We’ll explore what these cases are signaling about the rules of professional responsibility requirements for competence, diligence, supervision of staff and vendors, and how to communicate AI limits to clients.

Participants will walk away with practical, actionable lessons drawn directly from others’ mistakes. If you want to use AI confidently—and avoid becoming the next headline—this program gives you the insight and tools to do it responsibly.

Webinar Instructions (Registration, Participation, CLE Credit)

Notice to first-time participants and any who have previously encountered technical or credit-related issues: This webinar will be hosted via Zoom. To ensure a smooth experience and CLE credit eligibility, please review our Webinar Participation Guide and follow the instructions closely. Failure to do so may prevent you from joining and/or receiving participation credit for this webinar.

About the Presenter

Dr. Michael H. Hoeflich | Distinguished Professor of Law, The University of Kansas School of Law

Michael Hoeflich holds degrees from Haverford College, Cambridge University, and Yale Law School. He taught at the University of Illinois from 1980–1988, was dean of the Syracuse University College of Law from 1988-1994, and was dean at the University of Kansas School of Law from 1994–2000. Hoeflich is the author or editor of more than 25 books and 149 articles. He previously served as the director of the M.S. in Homeland Security: Law & Policy degree program at KU Law. He is the principal investigator on a five-year, $1.5 million Intelligence Community Centers for Academic Excellence grant to the University of Kansas. In 2021, Hoeflich was the recipient of a Higuchi-KU Endowment Research Achievement Award, the state higher education system’s most prestigious recognition for scholarly excellence. Hoeflich received the Balfour Jeffrey Award in Humanities & Social Sciences for his significant research contributions to legal history and ethics.

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JHC offers free CLE programs tailored to members of the Kansas and Missouri Bars at least quarterly. Visit our Ethics page for more information and to subscribe to our email news list, which receives CLE invitations and our monthly ethics newsletter.

The post Ethics in Lawyer Litigation of AI Suits: a Free CLE Webinar appeared first on Home.

Some attorneys recommend reviewing a prenup every five or so years. In addition, if you are experiencing major changes in your business or professional life, it may be time to revisit your prenuptial agreement and assess whether it still reflects your current financial situation and responsibilities. Working with an experienced family law attorney can help ensure your agreement remains legally sound and aligned with your evolving financial landscape. The Kansas City premarital agreement attorneys at Joseph, Hollander & Craft provide professional guidance to help you plan for these changes with clarity and confidence.

Why a Business Sale or IPO Can Change How Assets Are Treated in a Divorce

The sale of a business or an IPO can affect how assets are classified and valued in a divorce. These changes, in turn, influence how the business or related proceeds are ultimately divided between spouses.

Before a business is sold, its value can be difficult to determine. This is one reason business owner divorces tend to be more complex. Courts often rely on expert witnesses to assess the value of a spouse’s ownership interest. Even then, experts may disagree, particularly when each spouse advocates for a different valuation method.

A sale can largely resolve this issue by converting the illiquid business interest into liquid assets. The proceeds may include cash, stock, or other forms of compensation, all of which are generally easier to classify and value. Because of this, liquid assets are typically more straightforward for courts to divide.

A similar shift can occur with an IPO. The individual may receive stock options, restricted stock units (RSUs), or other compensation tied to the offering. These assets are usually easier to value than an illiquid business interest. Although a sale or IPO does not eliminate the need for expert analysis, either event can simplify the equitable distribution process.

Because a sale or IPO can significantly change how assets are valued and divided, these events often expose gaps or outdated assumptions in an existing prenuptial agreement.

When Should We Revisit Our Prenuptial Agreement?

Major life changes warrant an examination of a prenuptial or other premarital agreement. These are some of the most common triggering events which should motivate you to modify a prenuptial agreement or draft a postnuptial agreement:

• Starting or selling a business: Any change in the status of a business or the start of a new one is significant enough to affect the assets that will later be divided if your marriage ends.
• Other changes to your business: Events such as an IPO can materially change how a business interest is valued and should prompt a closer review of the agreement.
• Career changes: If you start a new job or end one, or enter into a new profession, you may need to revisit the spousal support provisions of your prenup.
• Relocating: Because the laws regarding premarital agreements vary by jurisdiction, it’s a good idea to review your agreement if you move to another state or country.

Common Issues Couples Address After a Business Sale or IPO

Major financial changes affect the character of the assets addressed in your original prenuptial agreement. If it is time to review your prenup, it is also important to understand the financial matters you and your spouse need to address. There are several issues to consider when modifying a prenuptial agreement or drafting a postnuptial agreement after selling a business or completing an IPO.

Equity Compensation and Stock Holdings

There are several forms of compensation a business owner may receive after selling a business or completing a successful IPO. These may include:

• Cash: Immediate proceeds from the sale.
• Stocks and stock options: Equity interests that may vest over time.
• Restricted stock units (RSUs): Compensation tied to future performance or tenure.
• Earnouts: Payments contingent on future business performance.
• Bonuses: Additional compensation tied to the transaction.
• Income (e.g., consulting): Ongoing business income following the sale.

A central issue in a business owner divorce is whether these forms of compensation are treated as past payment or future payment. If they are considered compensation for efforts made during the marriage, they will likely be classified as marital assets. If they relate to future services or performance, some or all may be treated as separate property.

Proper classification requires careful business valuation and a clear understanding of the financial circumstances surrounding the transaction. Addressing these distinctions is essential when modifying a prenuptial agreement or creating a revised agreement that reflects new assets and evolving financial dynamics.

Investment of Sale Proceeds

Once a business is sold, the proceeds become a different type of asset than the original business interest. However, the original prenuptial agreement may not clearly address how those proceeds should be classified or divided between the parties.

In many cases, proceeds are reinvested, which can change their character. For example, funds may be used to start a new business venture or to purchase investments that generate business income or passive returns. These actions can complicate financial planning and may introduce potential conflicts over whether the resulting assets remain separate or become marital property.

Commingling is another common issue. When sale proceeds are mixed with other assets, it may be more difficult to trace their origin using financial records, which can create legal challenges during the divorce process. Revisiting these issues through a revised agreement can help ensure the treatment of these assets remains clear and legally binding.

Spousal Support Expectations

A business sale or IPO can significantly change one spouse’s income and overall financial landscape. For example, a business owner may continue working in a consulting role or receive ongoing compensation tied to the transaction. These changes affect future earning capacity and financial responsibilities.

As financial circumstances change, expectations around spousal support often shift as well. One spouse may argue that increased income supports a higher support obligation, while the other may point to uncertainty in future earnings. These competing positions can create potential legal challenges if not addressed proactively.

Revisiting spousal support provisions with the guidance of a knowledgeable family law attorney can help ensure the agreement reflects current life circumstances and remains legally sound. Clear language and open communication between the parties are essential to avoid future disputes and support informed decisions.

Updating a Prenuptial Agreement Vs. Creating a Postnuptial Agreement

Whether you wish to update or modify a prenuptial agreement or simply enter into a postnuptial agreement, you must ensure that the agreement you sign meets the appropriate formalities. In the eyes of the law, your update may be viewed as a postnuptial agreement. One main difference between the two is when the agreement is signed (before or after the marriage begins).

As a general rule, the agreement you enter into with your spouse, or the modifications you make, must meet these requirements:

• Full disclosure: Spouses must be transparent in what they own and how much money they earn before a premarital or postmarital agreement can be updated or signed. With complex assets like businesses and stocks, this becomes even more essential. The objective is to make sure that both spouses understand the other’s standing before deciding how to handle property and finances in divorce.
• In writing and signed: Any changes you and your spouse make, or postnuptial agreement you enter into, must be in writing and it must be signed by both you and your spouse. A verbal agreement will not be enough.
• Both parties are represented by independent legal counsel: Each spouse should have their own respective legal counsel. Having separate counsel can help ensure a new or updated agreement is properly drafted and enforced.
• No coercion: It has to be clear there is no coercion. A good way to prevent this from becoming a problem is to give your spouse ample time to review the agreement with an attorney of their choosing and to make changes.

Clarifying How Liquidity Event Proceeds Will Be Treated

You may have similar events in the future that result in converting illiquid assets into liquid assets. Rather than signing a new agreement after each IPO or business sale, you and your spouse can clarify in advance how those proceeds will be treated. This allows you to determine how the asset will be classified (marital versus separate), how it will be valued, and how it will affect the original terms of your prenuptial agreement.

Taking this approach helps ensure the agreement remains legally sound and aligned with your evolving financial circumstances.

Addressing New Wealth Structures

A liquidity event such as the sale of a business or an IPO may result in new streams of income or more complex assets that your original premarital agreement did not take into account. These may include many of the forms of compensation discussed above. When modifying a prenuptial agreement or entering into a new agreement or postnuptial agreement, you and your spouse should address the following legal considerations:

• Classification of proceeds: How proceeds, income, and assets resulting from these events will be treated.
• Commingling concerns: Whether combining assets—even temporarily—will change their classification.
• Ongoing returns: Whether dividends, interest, or capital gains will be considered separate or marital property.
• Debt allocation: How any liabilities tied to new investments or business interests will be handled.

The goal is to avoid gaps between the agreement and your current financial landscape, reduce potential conflicts, and support informed decisions as your financial dynamics evolve.

Updating a Postnuptial Agreement

Just as you would revisit your prenuptial agreement after a major change in asset structure or income, you may need to modify your postnuptial agreement after a business sale or IPO. This is particularly important when those changes were not contemplated in the original agreement or its original terms.

Updating a postnuptial agreement typically requires mutual consent and compliance with applicable legal requirements to ensure the agreement remains legally binding. The process is similar to modifying a prenuptial agreement and focuses on making sure all assets, income streams, and financial responsibilities are clearly addressed.

When to Speak With a Kansas City Divorce Attorney

If you are a business owner or professional who has a prenup, you or your spouse have experienced a major financial or other life event since your marriage began, or you are simply trying to protect your business assets in divorce, it’s time to seek legal counsel. A Kansas City divorce attorney from our firm can also assist prospective spouses with significant assets who have questions regarding business valuation and divorce, especially if they do not already have a prenuptial agreement or they have one that does not account for these more complicated scenarios.

Your goal with a premarital agreement or postmarital agreement is to be comprehensive. So we can review your and your spouse’s existing financial situation, explain options for addressing events like the ones covered above, and then get to work drafting the terms of an agreement that protects you in the long term. This includes updating an existing agreement if that will better fit your situation.

Protecting Your Financial Agreements After Major Wealth Changes

Prenuptial agreements don’t happen in a vacuum; life continues to move forward, and that means you or your spouse could encounter significant financial and wealth changes that will prompt the need to review your existing premarital agreement. Let the Kansas City attorneys of Joseph, Hollander & Craft assist you. Call or contact us today to reserve a consultation. We also represent clients in Overland Park, Lawrence, Topeka, and Wichita.

Reviewed by an Award-winning attorney at Joseph hollander & Craft

Carrie E. Parker

Carrie E. Parker is a criminal defense and civil litigation attorney located in Lawrence, KS. Ms. Parker represents individuals and businesses during the investigation and prosecution of criminal charges in federal and state courts. She also represents businesses and individuals in complex civil litigation and property holders seeking the return of assets seized for forfeiture. […]

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The post When to Update a Prenup After a Business Sale or IPO appeared first on Home.

When addressing child custody and traveling, parents must build an agreement that accounts for work obligations, summer vacation plans, and unexpected changes to travel plans. The impact of custody arrangements on travel plans highlights the importance of committing to effective co-parenting. The goal is to create a parenting plan that allows both the traveling parent and non traveling parent to maintain consistent involvement. A Kansas City child custody lawyer from Joseph, Hollander & Craft can help structure a plan that optimizes flexibility while supporting the child’s best interests.

How Can Parenting Plans Account for Frequent Travel?

Missouri presumes a 50/50 custody arrangement is in the best interests of most children, except in cases where the court is persuaded otherwise. (Kansas has no statutory presumption, but maintaining regular contact with both parents is often deemed to serve the child’s best interests.) In the interests of preserving a shared lifestyle, you will be asked to enter into a parenting plan with your ex-spouse. Parenting plans should account for a travel-heavy lifestyle while minimizing disruptions to your child’s life. When one or both parents travel for work or family commitments, it is important to ensure that this does not mean missing out on milestones or shared time with a child.

One common question parents face is how to structure this 50/50 time. When one parent has an irregular schedule, it is not usually realistic for them to take on rigid weekly responsibilities, even if their child’s life is more structured. In these cases, it may be useful to discuss shared percentages of time, instead of split weekly schedules.

Major decisions, such as travel or vacations, often require both parents to refer to the custody agreement and consult each other to ensure compliance and avoid conflicts. Understanding whether your child custody plan involves shared residency or simply decision making is critical to ensuring that you know your full rights and abilities as a parent after a Kansas City divorce.

How Flexible Can a Parenting Time Schedule Really Be?

There are opportunities for flexibility within a child’s fixed schedule, if both parents are willing to work to find it. Flexibility becomes even more important when parents are planning summer vacations, coordinating summer travel, or managing travel dates that may change. A well-drafted plan should anticipate interstate travel, trips across state lines, and even international travel, while maintaining structure for the child. Parents should also prepare for potential issues by having a reference point, such as documented agreements, which can help resolve disputes if they arise.

Some examples include:

Rotating or adjusted parenting time

Rotating schedules allow for a child to effectively live with both parents in different configurations. Rotating schedules are often best for parents who both prioritize getting to be present for everyday milestones, and who are seeking to share common responsibilities. When both parents are frequent travelers, a rotating or adjusted parenting time schedule can also allow both parents the freedom to meet their own commitments.

Some examples of rotating schedules for Kansas City parents with joint custody include:

• 2-2-3 Rotation: Say you have a 50/50 custody split with your ex-spouse. Your child will spend 2 days with you before moving to the other household for the next 2 days. They then will return for the end of the week to your household. The next week will be a swap, with the other parent taking the additional time. While 2-2-3 rotations involve plenty of moving parts, they are sometimes an option for parents who want to ensure frequent contact with their children during the everyday business of parenting. 2-2-3 rotations tend to be best for parents who live nearby each other.
• 3-4-4-3 Schedule: In this setup, parents can alternate three and four day blocks of time, minimizing exchange time.
• Week-on/Week-off, or 7/7: In this setup, children will change households every week. 7/7 setups are often best for older children who have more agency in their travel.
• 4-3 Schedule (60/40): One parent might take care of a child for most of the school week, while the other parent might cover the weekends. This can be rotated to adapt for parents with non-traditional work weeks, or who often need to travel over long weekends for work or personal reasons.

In some cases, a plan may require permission or written consent from the other parent before confirming certain travel plans, particularly when those plans involve extended time away or crossing jurisdictional boundaries.

Provisions allowing schedule adjustments when travel arises

Schedule adjustments are a necessary component of most parenting plans when one parent is a frequent traveler. There are many reasons why a frequent traveler might need to ask for additional flexibility from their co-parent. Just some reasons include international travel restrictions, TSA delays, rescheduled flights, and shifting work requirements. “First right of refusal” can allow parents the option to have parenting time on available days before the other parent makes plans for alternative child care.

Planning around recurring travel patterns

Monthly or seasonal trips create an opportunity for consistency in a parenting plan. If one parent knows they must spend one season of the year in a different county, state, or country then they can ask to address that directly in a parenting plan. A Kansas City custody lawyer can help you negotiate these travel-related custody challenges to ensure that you do not miss out on time with your child when you are available to have it.

Makeup Parenting Time for Missed Travel Periods

Makeup parenting time is not a legal right unless it is specified in a parenting plan approved by the family law court. This is critical for frequent travelers to realize. While you may assume that an ex-spouse will attempt to accommodate you as a co-parent, all too often this is not the case. Your summer travel needs, changed flights, or delayed layovers can easily add up and turn into missed opportunities to stay in your child’s life unless you specify makeup parenting time in the written plan. You may need to set reasonable limits, such as “one makeup weekend a month” as an option, but failing to communicate around makeup parenting time in advance is leaving too much up to chance and your ex-spouse’s goodwill.

Communication and Virtual Parenting Time During Travel

Virtual parenting time is an option that allows for you to remain present during travel periods. You may wish to specify elements such as a private space for your child to take video calls with you, or try to create stability by setting up a time in advance when you will call that fits into your child and co-parent’s schedule.

It can be helpful to document all communication regarding travel plans and custody arrangements through texts, emails, and co-parenting apps to maintain a clear record of agreements. Sharing a detailed itinerary with the co-parent fosters trust and helps ensure the trip runs smoothly.

Travel Notice Requirements and Scheduling Coordination

Both Kansas and Missouri state law require parents to give travel notice requirements in writing to co-parents after a divorce. Providing travel itineraries and maintaining open communication can reduce disputes and help both parents stay aligned. In addition to providing travel itineraries, parents should carry all legally required documents, such as notarized consent letters, custody orders, and birth certificates, and provide detailed itineraries including dates, locations, and contact information. Notifying the other parent in writing before taking a child on vacation is often required by custody agreements. Creating a checklist of necessary travel documents can help reduce stress and ensure compliance during travel.

Staying in clear communication with your co-parent regarding out of state travel is also important in order to avoid being held in contempt of court.

Missouri Travel Notice Requirements

A parent who is relocating out of state and intends to bring their child for a period of over 90 days must provide written notice via certified mail at least 60 days prior. The notice must include the new address, the date of the move, and the reason.

You may also need to notify a co-parent before taking a trip out of state or out of the country. The details of your parenting plan should specify how your co-parent wishes to be notified as well as how far in advance they will need to be told.

Kansas Travel Notice Requirements

Kansas City parents who file for divorce under Kansas state law are governed by K.S.A. 23-3222 regarding travel and relocation notice. Under Kansas statute, a co-parent must provide written notice 30 days prior to changing a child’s residence or bringing a child out of state for more than 90 days.

Traveling With Children Under a Parenting Plan

Traveling with children can be a meaningful way to build a bond when one parent has a second home or changing schedule; how your child will travel, what kinds of supervision are acceptable, and other logistics should always be discussed in advance with your co-parent and included in the child custody plan. Consider laying out details such as public transit vs. rideshare use, airport pickup vs. accompanied flights, and other areas of possible contention with a co-parent in advance as part of your overall plan.

Parents should also be aware that failure to follow a custody agreement when traveling can raise concerns about parental kidnapping, especially if a child is taken out of state without proper notice or consent. Clear expectations within the parenting plan help avoid these risks.

International Travel and Passport Requirements

You may need to include provisions regarding your child’s passport, ID documents, and more. Both parents should have access to a child’s passport when both are frequent travelers. It may make sense to have a shared safety deposit box or other centralized location where these documents will be kept, as opposed to in one household.

When Parenting Plans May Need Modification

Even the most flexible scheduling solutions sometimes need adjustments. After a divorce is finalized, modifying a parenting plan in Kansas City requires a formal court action. You must document a substantial change in circumstances that makes the modification both necessary and in your child’s best interests; it helps when both parents agree.

Most parents with a need to modify a parenting plan work with a Kansas City custody lawyer to file the motion, inform their co-parent within the legal groundwork required, and present their claim at a hearing. A judge will need to agree to modify a parenting plan, and may question how you will accommodate your child’s needs with the change. If a parent makes unauthorized modifications or violates a court order, the result can be serious; a judge can order the immediate return of the child or change the custody arrangements. Additionally, traveling or moving out of state does not automatically change which court has authority to modify custody orders, as the UCCJEA establishes that the “home state” retains jurisdiction over custody disputes regarding children.

Creating Parenting Plans in Kansas City That Reflect Real Schedules

Parents’ professional schedules, second homes, and extended travel are all opportunities for a child to experience more doors being opened for them in their lifetime. However, when a parenting plan does not reflect a parent’s realities, it can create a situation where their connection with their child is set up to fail. A Kansas City family law attorney can ensure that your parenting plan accounts for travel contingencies and leaves you space to connect with your child on terms that are realistic for everyone involved.

Speak With a Kansas City Child Custody Attorney Today

Contact Joseph, Hollander & Craft today if you are a frequent traveler and co-parent needing assistance forming a customized parenting plan. We maintain offices in Kansas City as well as Topeka, Wichita, Lawrence and Overland Park for your convenience.

Reviewed by an Award-winning attorney at Joseph hollander & Craft

Carrie E. Parker

Carrie E. Parker is a criminal defense and civil litigation attorney located in Lawrence, KS. Ms. Parker represents individuals and businesses during the investigation and prosecution of criminal charges in federal and state courts. She also represents businesses and individuals in complex civil litigation and property holders seeking the return of assets seized for forfeiture. […]

Read More →

The post Child Custody and Traveling: Parenting Plans for Frequent Travelers appeared first on Home.

Why Licensing Boards Reach Out

Once you receive your license, you likely will want little or no contact from the board. That’s because much of what the board does is regulate the members of its profession. Although the board may reach out to you, not every communication is of equal importance. These are a few common reasons for licensing board correspondence:

• Administrative matters: These are fairly routine and may involve paperwork updates, new rules, payment of dues, and the like. Since all licensees are subject to these matters, they are not usually cause for concern.
• Mandatory reports: Professionals often have an ongoing duty to submit regular reports. These are often imposed annually, but they may be required more frequently depending on your profession. While mandatory reports are standard, a mistake or oversight could trigger a formal review.
• Audits or Inspections: Boards periodically conduct audits or inspections to ensure licensed members and entities are abiding by their professional duties. Licensees are often selected at random, but they should take the audit or inspection seriously and make sure they respond appropriately to the board.
• Complaints: A complaint indicates that someone (often a client, a patient, or a colleague), believes you have breached your professional duties. Notice of a complaint means the board takes the matter seriously enough to request a statement from you.
• Criminal charges and convictions: If you have pending criminal charges, even misdemeanors, you may hear from the licensing board. A conviction is also likely to cause the board to act. Criminal misconduct calls into question a licensee’s moral character, so you should deal with any board inquiry swiftly.

The manner in which the licensing board makes initial contact will vary. In some professions, a member of the board will send written correspondence such as an email or letter. But you may receive a phone call instead. It’s imperative that you keep your contact information updated in case the licensing board needs to reach you.

Step 1: Read the Communication Carefully

It can be jarring to receive a formal letter or other message from your licensing board. Your first response should be to read over the communication carefully. Keep the following points in mind as you do:

• Clarify the nature of the communication: The message should indicate whether it is a routing communication or particularized to you.
• Note any timelines and deadlines: Communications will often include important dates and will impose some sort of deadline to respond, so identify these right away.

• Understand the potential for serious allegations: The language may not fully communicate the seriousness of the underlying issue.
• Make a copy of the communication: If the communication is written, make a copy of it so you can add notes and highlight key information.
• Start documenting everything: After you have read the allegations or substantive claims in the communication, begin gathering all records you have that pertain to them.

Step 2: Start Planning, But Do Not Respond Immediately

Even if you believe you have done nothing wrong, resist the urge to defend yourself at this early stage. A quick response risks self-incrimination or misrepresentation. While you may be in the right, sending an immediate answer will risk self-incrimination on this or a related matter. You may inadvertently misrepresent your own position and leave out essential details which could absolve you of liability. Retain counsel and involve your malpractice insurer, as the circumstances dictate.

What Happens If I Ignore the Board’s Letter?

This is one of the costliest mistakes you can make. At a minimum, the board will likely commence disciplinary proceedings. Moreover, if the allegations involve criminal misconduct, the board may refer you to prosecution.

Will There Automatically Be a Hearing?

Not all board communications automatically prompt a hearing, but a hearing could allow you an opportunity to exonerate yourself. Licensees usually must expressly request an administrative hearing, and do so by a certain date. If you do not timely avail yourself of a hearing you may permanently forfeit the right to one.

Step 3: Call Joseph, Hollander & Craft

Your license, and therefore your professional and financial well-being, could be in jeopardy. Contact our law firm immediately. Joseph, Hollander & Craft has extensive experience representing healthcare providers, lawyers, judges, and other professionals in their dealings with licensing boards. Our firm is well-versed in both Kansas and Missouri laws, regulations, and proceedings that concern occupational licensure matters. We have built a reputation for excellence in this niche area of law.

For each client who retains our firm, we develop a customized strategy aimed at handling each step of the board’s investigation, from informal inquiries to full hearings. In the event you receive an adverse decision from your board, our firm can help you appeal it and take steps to protect and restore your license.

Step 4: Notify Key Entities

There are certain parties you should inform of the communication. Those entities include:

Your Malpractice or Professional Liability Carrier

• Healthcare practitioners and attorneys in particular should reach out to their malpractice or professional liability insurers. Your policy may require this as a condition of covering any damages and losses related to disciplinary actions.
• Many insurance carriers provide representation or coverage for licensing board matters. If you are uncertain whether you have such coverage, read your policy or contact the insurance company for details.

Your Employer (When Appropriate)

• There are both risks and benefits to contacting your employer. Your employment agreement may require disclosure, but it could open the door to additional ramifications. Speak with an attorney to determine when and whether you should report board matters to an employer.
• Confidentiality and timing are important. You need to ensure that you communicate with the correct person at your place of employment to maintain your confidentiality. Also, you should do so in a reasonable amount of time. Your attorney can assist with this.

Step 5: Begin Preserving Records

Documentation is key to answering board complaints and other communications:

1. Create a chronology of relevant events and decisions: This will help you stay organized and tell a clear, compelling narrative of what happened.
2. Make a list of individuals who have personal knowledge: Anyone who knows about the substantive facts and events referenced in the board’s communication should be on this list.
3. Never assume a record is not important: You should err on the side of including more rather than fewer records when providing context for your attorney. Your lawyer can assess what will be required for your defense, and what can reasonably be set aside.
4. Do not destroy evidence: You may come across a damaging document, and be tempted to delete or destroy it. Doing this will almost certainly cause more problems.
5. Be upfront with your attorney: Let your lawyer know about anything and everything pertaining to the licensing board’s communication. This includes even the evidence which could be used against you. Your lawyer will know how best to handle it.

Step 6: Prepare for the Long-Term

Board communications may have lasting effects on your professional future. As a medical professional, for instance, board matters can impact your license, hospital privileges, and credentials.

Moreover, these communications can inflict significant stress. For that reason you should not neglect to seek available support resources and counseling if warranted. Many professions offer confidential hotlines and other forms of assistance, and you can take advantage of these while protecting your license.

Lastly, don’t be afraid to ask for help securing your professional future. We can help you implement a strategy to address concerns like these.

Can I resolve this without a hearing?

Hearings are often undesirable because they expose allegations of misconduct to the public. Even if the underlying claims turn out to be false, the complaint itself is often sufficient to harm the professional’s reputation. Fortunately, it may be possible to dispense with the complaint without the need for a hearing. The board may determine, for instance, that there is no evidence of misconduct and decide to close the matter. Retaining legal counsel early is the best step you can take if you wish to avoid a hearing.

Contact Joseph, Hollander & Craft

If you have been contacted by your licensing board for any reason, you should contact Joseph, Hollander & Craft. We represent professionals throughout Kansas and Missouri from offices in Overland Park, Lawrence, Topeka, Wichita, and Kansas City.

Reviewed by an Award-winning attorney at Joseph hollander & Craft

Carrie E. Parker

Carrie E. Parker is a criminal defense and civil litigation attorney located in Lawrence, KS. Ms. Parker represents individuals and businesses during the investigation and prosecution of criminal charges in federal and state courts. She also represents businesses and individuals in complex civil litigation and property holders seeking the return of assets seized for forfeiture. […]

Read More →

The post What to Do If You’re Contacted by a Licensing Board appeared first on Home.

Receiving a federal target letter is not a time to take matters lightly. Target letters are usually only issued when a federal prosecutor believes there is substantial evidence to tie the recipient to the commission of a federal crime. In many cases, this reflects that the federal government intends to bring charges. You need experienced counsel to help you strategize about what comes next in your case, and how you should plan to respond. If you need help understanding what a target letter usually signals in a federal criminal investigation, it is important to seek legal counsel early. Contact Joseph, Hollander & Craft.

What Is a Target Letter?

A target letter is a formal communication issued by the prosecutorial arm of the US Department of Justice, the US Attorney’s Office, also known as the United States Attorney’s Office. Each federal district has a US Attorney’s Office capable of issuing target letters in conjunction with ongoing investigations, including a federal grand jury investigation. A target letter is not an indictment, or a formal accusation of a federal crime. It is a precursor that explains that the person who receives the letter is under federal investigation.

As detailed in Section 160 of the Criminal Resource Manual, a target letter from the Department of Justice will generally:

• Advise the recipient that he or she is the target of a Grand Jury’s investigation;
• Identify the crime under investigation;
• Notify the recipient of his or her right to remain silent and to retain an attorney; and
• Caution the recipient against destruction of evidence and/or interference with the investigation.

Target vs. Subject vs. Witness

In a federal investigation, you can be classified at three different levels of legal exposure. They are:

1. Target: If you are a target, you are likely to be indicted for a federal crime. Target letters are usually only issued when the federal government investigators believe they have substantial evidence linking you to a crime. Speak with a federal criminal defense attorney at once if you are a target.
2. Subject: A subject is someone whose actions fall within the scope of grand jury investigation. A subject may have less evidence assembled against them than a target, but should still engage legal counsel. They may still receive a letter from the Department of Justice.
3. Witness: You may receive a letter or subpoena compelling appearance before a grand jury as a witness. Witnesses can still become subjects or targets as evidence is assembled, even though they are not at immediate risk of being charged. They should still consult with a federal criminal defense attorney in advance of testimony.

What a Target Letter Usually Signals About the Government’s Case

The federal government does not issue a target letter until they have substantial evidence of the crime involved. Therefore, a target letter signifies:

The Investigation Is Likely Well Advanced

If you receive a target letter, you must be aware that the case against you has been in the works for a period of time in advance of you receiving this communication, often through work conducted by federal law enforcement and federal investigators.

Prosecutors Believe They Have Evidence

Prosecutors generally will not issue a target letter unless they are confident in the strength of their evidence. This may mean that another party is prepared to testify against you, or that a significant paper trail has been discovered, sometimes developed through criminal investigation efforts.

A Grand Jury May Already Be Involved

A grand jury is a group of 16-23 citizens assembled to assess whether or not there is probable cause to issue an indictment. The Grand Jury may already be involved in your case when you receive a target letter, with an upcoming date set for a hearing.

The Government May Be Testing for Cooperation

Receiving a target letter can at times create an opportunity for cooperation. When a subject of an investigation receives a target letter, they have the opportunity to engage counsel. This can provide a platform for those the biggest targets of the investigation to cooperate with the United States Attorney’s Office by providing information about larger targets, which may influence how federal prosecutors evaluate the case. However, how cooperation may be helpful at this stage is very fact-dependent.

Strategic Decisions After Receiving a Target Letter

The most important strategic decision you can make after receiving a target letter is selecting a federal criminal defense attorney. Do not work with an inexperienced criminal defense attorney if you are under federal investigation. Joseph, Hollander & Craft offers a team of top rated criminal defense lawyers with years of experience in federal court. With five offices spread across Kansas and Missouri, we offer the resources of a larger firm with the dedication and commitment to excellence that comes from our roots as a family business. As federal criminal defense attorneys, we may recommend strategic decisions in your case such as:

• Preserving evidence: Do not destroy or hide any evidence, including letters, messages, emails, financial records or contents of bank accounts. Doing so can induce liability for a separate federal crime under 18 U.S. Code § 1519 punishable by up to 20 years in prison.
• Preventing the creation of additional evidence: While it may be tempting to reach out to former colleagues or associates to discuss the investigation, avoid communicating about potential criminal charges with anyone other than your criminal defense attorney, as statements may later be used in criminal prosecution. We can assist in communicating through each relevant party’s attorney so you do not inadvertently create additional evidence for the case.
• Evaluating the charges: We will assess the strength of the government’s case and your defense in context of the current legal landscape and similar judicial orders in order to provide our recommendation about how you should proceed, including whether a plea agreement may be appropriate
• Preparing for a subpoena: If the letter included a subpoena we will work with you to ensure that you can provide all of the relevant documents.
• Opening negotiations with the US Attorney’s Office: Do not attempt to speak to federal prosecutors alone. Your criminal defense attorney may be able to open channels of communication to clarify the investigation against you as well as hear any offers on the table for a possible plea bargain in certain federal cases.

What May Happen Next in a Federal Investigation

The federal investigation will proceed to the next phase after receiving a target letter. Your testimony before a grand jury may be requested, and in some cases may receive target letters related to additional aspects of the investigation. You will need to preserve any and all requested documentation from a subpoena and be prepared to assert your legal rights throughout the process, particularly if federal agents request information or testimony.

Depending on how the investigation develops, prosecutors may evaluate whether to bring federal charges and which charges to bring. These decisions can carry significant legal consequences, and should be made with guidance from an experienced federal defense attorney or experienced criminal defense attorney.

In some cases, investigations involving financial activity or white collar crimes may continue for an extended period before any formal action is taken. Regardless of the timeline, individuals who receive target letters should take immediate steps to protect their position and seek appropriate legal guidance.

Federal Investigation Target Letters: Frequently Asked Questions

Does receiving a federal target letter mean I will be charged?

Charges are very likely but not necessarily guaranteed. In some cases, a putative defendant may not ultimately face charges depending on how the investigation develops. Regardless, you should retain legal counsel as soon as you receive a target letter.

Can you ignore a federal target letter?

Never ignore a federal target letter. A target letter is a warning of impending action, not an empty threat. Contact a federal criminal defense attorney immediately to evaluate how to proceed.

Should you speak with investigators after receiving a federal target letter?

You may be able to reach a resolution with federal investigators in advance of indictment through your criminal defense lawyer’s actions, such as a pre-indictment plea negotiations. It may also be possible to clarify misunderstandings or provide sufficient valuable cooperation to avoid charges altogether. However, you should never attempt to contact investigators without legal representation, or make statements without advice from a federal criminal defense lawyer.

How much time passes between a federal target letter and an indictment?

In the Western District of Missouri as well as the District of Kansas there is no fixed period of time between when a target letter is received and an indictment. However, you should contact a federal criminal defense attorney immediately as an indictment can follow within just several days or weeks afterwards.

Speak with a Federal Defense Attorney in Kansas or Missouri

If you have received a federal target letter, don’t wait to speak with an experienced criminal defense lawyer about your case. Joseph, Hollander & Craft provides skilled legal representation to clients in Kansas and Missouri. Contact us today to reserve a confidential consultation. Our offices are located in Kansas City, Topeka, Wichita, Lawrence, and Overland Park.

The post What a Target Letter Signals About a Federal Investigation appeared first on Home.

Professor Michael H. Hoeflich, PhD, Editor-in-Chief
Carrie E. Parker, Legal Editor
Luzianne Jones, Design & Publishing Editor

PUBLISHED BY: Joseph, Hollander & Craft LLC

PUBLICATION DATE: April 30, 2026

READ & DOWNLOAD FULL-TEXT PDF OF LEMR Vol. 7, No. 4

FEATURE ARTICLE: Defending & Preventing AI Hallucination

In last month’s Legal Ethics & Malpractice Reporter, we outlined the increasing number of cases involving the submission of hallucinated case law by lawyers and law firms and the increasing imposition of sanctions by courts under Federal Rule of Civil Procedure 11 and related state rules. Here, we examine the defenses that have been raised by attorneys and firms that have submitted fake citations and how courts have reacted to them.

I Didn’t Know What I Was Doing

The defense of ignorance has proven to be a bad choice. Courts have cited many rules when addressing the issue of hallucinated law—most frequently FRCP 11 and Rules of Professional Conduct 1.1, 3.1-3.4, and 5.1-5.4. None of these rules mentions intent. Accordingly, pleading lack of intent to be technically incompetent or lack if intent to misinform the court is not likely to be effective. It might also anger the court.

. . .

READ THE FULL ARTICLE

NEW AUTHORITY: ABA Formal Opinion 522

On April 8, 2026, the American Bar Association Standing Committee on Ethics and Professional Responsibility issued Formal Opinion 522, regarding a lawyer’s obligation to disclose information about grounds for judge’s disqualification.

Of course, judges are required to consider disqualification under Rule 2.11 of the Judicial Code of Conduct, which states that

A judge shall disqualify himself or herself in any proceeding in which the judge’s impartiality might reasonably be questioned . . . .

But there are times when a judge may not know that there are grounds for such a disqualification. And Opinion 522 concludes that Rule of Professional Conduct 8.4(d) requires the lawyer, as an officer of the court, to disclose that information to the tribunal.

When would a judge not know the judge’s impartiality might reasonably be questioned in connection with a proceeding? Opinion 522 offers four examples.

Illustration 1: Prior Employment Connection

A prosecutor is assigned to represent the state in post-conviction proceedings. The assigned judge previously served as a supervisor in the prosecutor’s office. The prosecutor learns from the file that, while working in the prosecutor’s office, the judge supervised the trial prosecutor in the case. The defendant’s lawyer is evidently unaware of the judge’s supervisory responsibility for an earlier stage of the case, and the judge may not recall it.

Illustration 2: Campaign Contribution

A lawyer representing a party in a civil case learns from the client that the client was a major financial supporter of the presiding judge’s recent judicial election campaign. The client acknowledges having made a significant contribution to a political action committee earmarked for the judge’s campaign, but there is no public record of the contribution, and it is uncertain whether the judge knows of it.

Illustration 3: Spouse’s Law Firm Involvement

A lawyer learns that co-counsel for another party in a consolidated civil action has engaged the judge’s spouse’s law firm for related consulting work on discovery strategy. The lawyer knows of this fact because an associate from the spouse’s firm copied the lawyer on an email exchange related to scheduling depositions.

Illustration 4: Counsel’s Business Relationship with Judge’s Family Member

A lawyer for a party in a civil action recently became a minority shareholder in a local business. The lawyer knows that the judge’s adult child is an executive and major investor in the business.

According to Opinion 522, when a lawyer has “actual knowledge” of some similar reason for judicial recusal, Model Rule of Professional Conduct 8.4(d) requires that the lawyer consider disclosing those facts if (a) the information is reasonably likely to require recusal and (b) the disclosure can be made without violating the lawyer’s confidentiality obligations under Model Rule 1.6 or Model Rule 1.9.

The Opinion’s reasoning and its interpretation of the scope of Rule 8.4(d) may surprise some lawyers. The Opinion’s broad basis for the ruling that this obligation arises from a lawyer’s role as an “officer of the court” may raise some objections as well. Because of the possible novelty of the Opinion’s reasoning and because of its potential broad impact on litigation, every lawyer should read it in detail.

ETHICS & MALPRACTICE RESEARCH TIP: New Article on Legal Malpractice & Ethics

Michael D. Murray, Algorithmic Ethics in an Era of Agentic AI Advocacy: An Analysis of AI’s Impact on the Model Rules of Professional Conduct and the Model Code of Judicial Conduct, 16 ST. MARY’S J. ON LEGAL MALPRACTICE & ETHICS 279 (2026), online at https://commons.stmarytx.edu/lmej/vol16/iss2/4

In this article, Murray dives into issues related to the ethical use of AI in law practice and judicial conduct, rule by rule.

A BLAST FROM THE PAST: De re publica

Yet to possess virtue, like some art, without exercising it, is insufficient. Art indeed, when not effective, is still comprehended in science. The efficacy of all virtue consists in its use. Its greatest end is the government of states, and the perfection not in words but in deeds, of those very things which are taught in the halls. For nothing is propounded by philosophers, concerning what is esteemed to be just and proper, that is not confirmed and assured by those who have legislated for states. For from whence springs piety, or from whom religion? Whence the law, either of nations, or that which is called civil? Whence justice, faith, equity? Whence modesty, continence, the dread of turpitude, the love of praise and esteem? Whence fortitude in trouble and dangers? From those who having laid a foundation for these things in early education, have strengthened some of them by the influence of manners, and sanctioned others by the influence of laws. Of Xenocrates, one of the noblest of philosophers, it is said, that when he was asked what his disciples learnt of him, he replied “to do that of their own choice, which the laws enjoined them to do,” therefore the citizen who obliges every one by the authority and fear of the law to do that, which philosophers by reasoning, with difficulty persuade a few to do, is to be preferred to those learned men who only dispute about these things. For which of their orations, however exquisite, can be compared in value to a well constituted state, to public right and to morals. Truly as great and powerful cities, as Ennius says, are as I think, to be preferred to villages and castles; so those who stand pre-eminent in those cities, in authority and counsel, are to be esteemed far before those in wisdom, who are altogether ignorant of the conduct of public affairs. And since we are chiefly urged by a desire to increase the possessions of the human race, and seek by our counsels and labors, to surround the life of man with gratification and security, and are incited by the instincts of nature to these enjoyments; let us hold the course which was always that of the best men: nor attend to those signals which speculative philosophers make from their retirement, to allure back those who are already far advanced.

— Marcus Tullius Cicero, De re publica, tr. G.W. Featherstonehaugh (1829).

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About Joseph, Hollander & Craft LLC

Joseph, Hollander & Craft is a mid-size law firm representing criminal defense, civil defense, personal injury, and family law clients throughout Kansas and Missouri. From our offices in Kansas City, Lawrence, Overland Park, Topeka and Wichita, our team of 26 attorneys covers a lot of ground, both geographically and professionally.

We defend against life-changing criminal prosecutions. We protect children and property in divorce cases. We pursue relief for clients who have suffered catastrophic injuries or the death of a loved one due to the negligence of others. We fight allegations of professional misconduct against medical and legal practitioners, accountants, real estate agents, and others.

When your business, freedom, property, or career is at stake, you want the attorney standing beside you to be skilled, prepared, and relentless — Ready for Anything, come what may. At JHC, we pride ourselves on offering outstanding legal counsel and representation with the personal attention and professionalism our clients deserve. Learn more about our attorneys and their areas of practice, and locate a JHC office near you.

The post Legal Ethics & Malpractice Reporter, Vol. 7, No. 4 appeared first on Home.

Author: Professor Michael H. Hoeflich, PhD, Editor-in-Chief

Legal Editor: Carrie E. Parker

This article is featured in Volume 7, Number 4 of the Legal Ethics and Malpractice Reporter, published April 30, 2026.

In last month’s Legal Ethics & Malpractice Reporter, we outlined the increasing number of cases involving the submission of hallucinated case law by lawyers and law firms and the increasing imposition of sanctions by courts under Federal Rule of Civil Procedure 11 and related state rules. Here, we examine the defenses that have been raised by attorneys and firms that have submitted fake citations and how courts have reacted to them.

I didn’t Know What I was Doing

The defense of ignorance has proven to be a bad choice. Courts have cited many rules when addressing the issue of hallucinated law—most frequently FRCP 11 and Rules of Professional Conduct 1.1, 3.1-3.4, and 5.1-5.4. None of these rules mentions intent. Accordingly, pleading lack of intent to be technically incompetent or lack if intent to misinform the court is not likely to be effective. It might also anger the court.

For example, in Mattox v. Product Innovations Research LLC, when a lawyer insisted he did not know ChatGPT would alter the citations in a brief he asked the platform to make more persuasive, the court acknowledged the attorney’s actions were “not born of deceit.” 807 F.Supp.3d 1341, 1349 (E.D.OK 2025). Still, they “displayed a reckless disregard for the obligation to ensure that what is filed in federal court is true, verified, and worthy of the public trust,” warranting sanctions “both to redress the specific harm and to deter recurrence.” Id.

The deliberate submission of false authority to the court is, of course, particularly offensive. But courts will not excuse the inadvertent submission of false or inaccurate authority when the current legal landscape is full of warnings regarding the risks of AI-generated material.

It Wasn’t Me

To date, lawyers have not avoided sanctions by noting that someone else actually prepared the document they signed.

Citing FRCP 11, courts generally find that any lawyer who signs a document is responsible for what it contains. This rule has been relied upon in sanctioning local counsel who submit filings prepared by co-counsel for whom they have sponsored pro hac vice admission to practice. See, e.g., Mattox, 807 F.Supp.3d at 1351-1352; Wadsworth v. Walmart Inc., 348 F.R.D. 489, 498-99 (D. Wyo. 2025); Lifetime Well LLC v. IBSpot.com Inc., No. CV 25-5135, 2026 WL 195644, at *9 (E.D. Pa. Jan. 26, 2026).

Even lawyers who did not sign the offending documents may be subject to discipline. KRPC 5.1 requires lawyers with managerial and supervisory authority to “make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that all lawyers in the firm conform to the rules of professional conduct” and makes those lawyers responsible for the professional misconduct of their subordinates under specified circumstances. Accordingly, if any attorney in a firm is found to have violated KRPC 3.3’s obligations of candor, then his manager or supervisor may be on the hook as well. See N.Z. v. Fenix Int’l Ltd., No. 8:24-CV-01655-FWS-SSC, 2025 WL 3626155, at *4 (C.D. Cal. Dec. 12, 2025).

I’m Sorry

The white shoe law firm of Sullivan & Cromwell recently made headlines for the “apology letter” submitted in In re Prince Global Holdings Limited, et al., No. 26-10769 (Bankr. SDNY). Kelsey Vlamis, “AI hallucinated — and now an elite law firm is profusely apologizing to a federal judge,” Business Insider (Apr. 21, 2026), available at https://www.businessinsider.com/sullivan-and-cromwell-apologizes-ai-hallucinations-court-filing-2026-4; Karen Freifeld & Mike Scarcella, “Sullivan & Crowell law firm apologizes for ‘AI’ hallucinations in court filing,” Reuters (Apr. 21, 2026), available at https://www.reuters.com/legal/litigation/sullivan-cromwell-law-firm-apologizes-ai-hallucinations-court-filing-2026-04-21/. Acknowledging that a prior submissions included AI-generated citations that were fabricated (including wrong reporters and incorrect pin cites) and misquoted holdings, the letter stated “deep[] regret” that the error-filled filing occurred—noting “[t]he Firm’s policies on the use of AI were not followed in connection with the preparation of the” document.

In some cases, contrition may help mitigate the sanction and diminish reputational damage, but it is not a defense.

Conclusion

To date, we have seen nothing operate as a full defense when a filed document contains erroneous authority attributable to AI hallucinations. There being no “cure,” courts insist on prevention.

READ THE FULL ISSUE OF LEMR, Vol. 7, No. 4

About Joseph, Hollander & Craft LLC

Joseph, Hollander & Craft is a mid-size law firm representing criminal defense, civil defense, personal injury, and family law clients throughout Kansas and Missouri. From our offices in Kansas City, Lawrence, Overland Park, Topeka and Wichita, our team of 25 attorneys covers a lot of ground, both geographically and professionally.

We defend against life-changing criminal prosecutions. We protect children and property in divorce cases. We pursue relief for clients who have suffered catastrophic injuries or the death of a loved one due to the negligence of others. We fight allegations of professional misconduct against medical and legal practitioners, accountants, real estate agents, and others.

When your business, freedom, property, or career is at stake, you want the attorney standing beside you to be skilled, prepared, and relentless — Ready for Anything, come what may. At JHC, we pride ourselves on offering outstanding legal counsel and representation with the personal attention and professionalism our clients deserve. Learn more about our attorneys and their areas of practice, and locate a JHC office near you.

The post Defending & Preventing AI Hallucination appeared first on Home.