Friday, October 19, 2018

I'm Buying a House. Should I Hire an Attorney?

YES. Thanks for reading...

In all honesty, I get this question a lot, in some form or another. Although I believe the answer is an emphatic "yes," there are many reasons I believe this.

For most people, the purchase of a home is the largest and most important transaction they will make in their lives. This is not running to Walmart for a couple household items. We are talking about spending thousands, if not hundreds of thousands, of dollars. We are talking about making obligations that could last for as long as 30 years. Seems to me that someone making a purchase of this caliber would want to assure that it was done properly.

Since everyone loves a good list, here are seven reasons why hiring an attorney to assist with your real estate purchase is a good idea: 

1. Attorneys understand contracts.

This is what we do, folks. We read, we comprehend, we explain the ramifications. Most real estate agents in Illinois utilize a fill-in-the blank form contract. Every sale is unique, and as you might suspect, a form does not always fit every circumstance. Attorneys are uniquely equipped to draft and tailor a contract to fit the needs of the transaction.
2. Attorneys understand title issues.

Any real estate purchase should involve title insurance. When a title company issues a title commitment to insure the title, the commitment will outline any issues, or clouds, on the title. These items may need to be resolved, and attorneys are equipped to resolve most of those issues.

3. Attorneys have ONLY your best interest in mind.

Illinois allows real estate agents and brokers to act as dual agents. If someone is acting as a dual agent, that means they represent both parties to the transaction. The rules of attorney ethics dictate that we are only allowed to represent one side of a transaction. That means the attorney only has the client's best interests in mind and works diligently to protect those interests.

4. Attorneys are not paid based on a successful transaction.

Most real estate agents are paid based on a commission, which is a percentage of the purchase price.  If the transaction does not close, the agents do not get paid. Attorneys typically bill based on an hourly rate or a flat fee. Since the attorney's fee is not based on the transaction closing, attorneys are uniquely able to advise against consummating a transaction when it is not in client's best interest.

5. Attorneys understand and are familiar with the process.

Attorneys have done this before. Most people do not routinely buy real estate. For that reason alone, they usually have no reason to be familiar with the process. For better or worse, all counties in Illinois are unique and have their own quirks. An attorney can help Buyers smoothly navigate potential pitfalls they might face during a transaction.

6.  Attorneys can save you time and money.

For many of the reasons I have already listed, attorneys help a transaction to go smoothly. The more smoothly the transaction goes, the less time the Buyer has to spend on it. Plainly stated, time is money.

7.  Attorneys can save you headache.

Whether it's contract negotiations, issues with title to the real estate, mortgage issues, issues with the title company, easement issues, home inspection issues, or myriad other items, the attorney can make sure the transaction closes cleanly and that the Buyer will not be haunted with unresolved issues after the closing. Buyers certainly do not want to have to deal with outstanding issues after the transaction has closed, especially if such issues involve litigation. Litigation is expensive and time consuming.  (Refer to #6 above.)

I have never represented a client who regretted hiring our firm to assist with their purchase of real estate. I am somewhat biased, but I believe hiring an attorney to guide a Buyer through the process is always a wise decision. 

Thursday, September 13, 2018

Evelyn Bates

Grandmom would have been 90 years old today.  In honor of her birthday and her life, I would like to share the eulogy that I was honored to present at her funeral.  Rest easy Grandmom, we miss you every day.

Good morning everyone and thank you for coming.  If you do not know, my name is Blinn and Evelyn was my Grandmom.  Although it’s impossible to encapsulate the life of someone so very special in a few short minutes, I’m going try my very best.
In addition to being known as Evelyn and Grandmom, she was known as Mom, Ev Baby, and most recently Grammy.  
As far back as I can remember Grandmom was the most joyous, grateful, and humble person I have ever met.  She loved her family dearly.  There was never a time that her face did not light up with delight when she saw us.  And if you thought her grandchildren were special, you should have seen the joy her GREAT grandchildren brought her. 
She often reminded me that the great-grandchildren were some of the most perfect things she had ever seen.  I promptly reminded her of my presence, to which she usually responded “OH BLINN.”
She genuinely and truly cared about every person she ever came into contact with.  Her positivity and joy for living were unending.  This was her “bubble” as I sometimes called it.  Cynicism was simply not in her nature.
She loved her friends, and although it doesn’t take much, her social calendar was more booked than mine, by far.  The past few years, it was her great joy to spend time going to dinner with friends, or visiting them, or just chatting.  We sometimes had to call her a week in advance to get on her calendar for dinner.
She always had a kind word for someone’s attire, even if it was nothing special, it was “a great color on you.”  Being in her presence always made you feel better about yourself.  She just had that effect on people.
Her plants and her animals were like children to her.  She was very concerned about her plants when she fell recently.  As we sat in the O.R., surrounded by nurses, waiting on the orthopedic surgeon, I shared with her that Uncle Soup, in his typical heroic fashion, had volunteered he and Aunt Jean to water while Grandmom recovered.  “What a relief” she said,  “I have been just worried sick about my plants.”
She overcame a lot of obstacles during her lifetime, and always came out positive on the other side.  She was born right before the Great Depression, suffered the loss of a child, the loss of my Grandfather after decades of marriage, lived through never before seen technological advances, the list goes on.  She would always adapt, she never complained, and she would move on. 
Maybe she forgot to hit the send button on an email from time to time or forgot her password. I blame not taking those vitamins she misplaced when we were younger that were supposed to help bolster her memory. She didn’t like getting beaten by her grand-kids at Words with Friends because they “made up words.”  She never quite figured out that cell phone, but she did pretty darn well.  And she always did it with a smile and a kind word. 
She had some bumps and bruises along the way, and I joked with her that she was going to be bionic before it was all said and done.  But, she was strong.
If Grandmom had any weakness at all, it was her sweet tooth.  She loved all things chocolate, and she wanted to make sure everyone else had plenty too.  One of my favorites was a chocolate cake with chocolate frosting, and raspberry jelly in the middle.  My mouth is starting to water just thinking about it.  
Although Grammy was always a stickler for manners and proper etiquette, she did profess that there was one exception, and that was that you were allowed to wipe chocolate off of your plate with your finger and lick it.  That will always be an exception at my dinner table.   
She was a deeply religious woman, and her empathy for others was unmatched.  The cynic I can sometimes be, she would often get a sigh or an eye roll from me when she was being overly empathetic.  But, Grammy was a true servant of the Lord, and she set the example for all of us. 
I am so very grateful that I got to enjoy the time I had with her on this Earth and that 

my children were privileged to meet such an incredible person.  Although she will 

certainly be missed, she will be remembered fondly until we see her again.  God 


Monday, July 23, 2018

You've Been Served - Now What?

For most individuals, being served with a Summons is not an everyday occurrence. Unless you work within the court system or at a law firm, legal documents probably arouse some level of trepidation when someone brings them to your door. Hopefully a few basic "Dos" and "Don'ts" will help to ease that fear.  

DON'T ignore the Summons. The worst possible course of action after being served would be to ignore the issue. Even if you are 100% in the right, the problem will not go away if you ignore it. In fact, it will likely get exponentially worse.   

DO read everything in the Summons and Complaint. You should review what the Summons and Complaint have to say. The Complaint outlines the allegations against you.  Although the technicalities and legalities within the Complaint may be confusing, that document will give you an overview of why you are involved in the lawsuit.   

DON'T skip court dates. If the Summons lists a date when you are to appear in Court, make sure you are there. This goes along with the suggestion that you not ignore the Summons. There is never anything good that comes from missing scheduled Court hearings. There could be default judgments entered against you, which might eventually affect your credit. Missing some Court dates may result in the issuance of a body attachment for your arrest. Court dates are not something to take lightly.  

DO calendar dates. If there are dates listed in the Summons, make sure you set a reminder for those dates. I keep an electronic calendar, and Court dates get calendared immediately when they are received. Judges do not like when anyone fails to appear, but that is especially true for lawyers.  

DON'T immediately contact opposing counsel without legal representation. The attorney's office that filed the Complaint does NOT represent you. They represent their client and their client's interests. They have no obligation to explain the legal ramifications of your actions to you, and anything you tell them may be used against you later in the proceeding.

DO contact your insurance company. If you have been sued, you should notify your insurance company about the Complaint. This is not to say that you will necessarily be covered, but prompt notification is usually essential to make sure you are covered if the claim against you is something you are insured against.   

DON'T talk about the lawsuit with other people or online. It may be tempting to fight the Complaint in the court of public opinion. Don't do it. Anything you say to others or publish online may be used against you later in the proceeding. Especially early on in the proceeding, you should only discuss the lawsuit with your insurance company and your attorney.

DO contact a reputable attorney in your area. This is the best advice I can give. An attorney is going to be familiar with the legal process in your county, and will be able to give you guidance on how to proceed. Call and make an appointment to see a lawyer right away. If it is not the type of case their office handles, they would be in a great position to give you a recommendation on who to call. Make sure to give the attorney plenty of time to handle the issue. Tell his office of any upcoming deadlines or court dates when you call to schedule an appointment.

If you follow this advice, you will be well on your way to resolving your issue. Being sued is typically unfamiliar, and initially it can be scary. You may not be able to make the issue go away overnight, but you will sleep much better knowing that you have competent legal representation protecting your interests.

Friday, July 13, 2018

LegalZoom Legal Plans

I read, with interest, an article that was recently sent to me by LegalZoom advocating for consumers to hire attorneys. I'm not sure why I receive emails from LegalZoom, but I apparently do.  I guess it's always good to keep up with what the (purported) competition is doing.

For anyone unfamiliar with LegalZoom, they are a legal tech company that was started in the early 2000s.  Their business model started out as providing consumers with low-cost, online, do-it-yourself legal solutions.  I will admit, they seem have been pretty successful over the years generating revenue.  Your guess is as good as mine on the eventual outcomes of their products.   

After reading the article, you may assume that LegalZoom finally came to their senses and realized that every legal matter does not fit a cookie-cutter, one-size-fits-all, model.  Or, if a savvy reader scans all the way to the end of the article, they might see that LegalZoom is marketing their contract legal plans. 

Interested in what the legal plan had to offer, I went ahead and reviewed the Legal Plan Contract.  For the "best value" of $9.99 a month, the LegalZoom legal plan offers consumers the following:

1.  A 30-minute phone call with a legal plan attorney to discuss a "new" legal matter, which does not involve business matters (there is a different plan for that) or tax matters.  And, if the plan attorney deems it appropriate, a letter that does not exceed 2 pages.

2.  Review of a legal document up to 10 pages for a "new" matter and a call from a plan attorney about the same.

3.  A legal checkup once a year including a 1 hour phone call to discuss the client's "legal portfolio."

4.  A 25% discount on the plan attorney's fees, as reported to LegalZoom, if hired by the client for additional work.

There were several other gems in the Contract, but, with the exception of the auto-renewal language, these were the meat of the agreement.  So, what does a consumer's $120 per year actually get them?  Not much. 

Let's run through a scenario:  When, and if, you actually get on the line with a live attorney, your legal issue is not going to be resolved in a 30-minute phone call.  Even if the contract you have is less than 10 pages (the Legal Plan Contract itself was 6), there will be language in that contract the plan attorney does not like.  He will tell you that he suggests you hire him to help you navigate your issue.  Knowing that his rate would be discounted 25%, he probably reported his rate to LegalZoom as being 25% higher.   

In all likelihood, the plan attorney is not going to be located in the same place you live and will be in some dream location, like Chicago.  Now you are dealing with a non-resident attorney.  Going to their office to meet with them is going to be burdensome, and they will probably charge you to travel to you, if it becomes necessary.  They are not familiar with the community you live in, nor are they familiar with the people who live and work there.

Here's a better suggestion:  If you have a legal matter that needs attention, you are always best served to consult an attorney.  Not sometimes, not only for things that are "complicated," not for things you cannot accomplish on your own.  ALWAYS.  So call someone local and go see them.  Ask friends and family members who they know and trust to handle your issue.  Unless you are delving into the wonderful world of litigation, anybody worth their salt should be able to give you an estimate of what the overall cost of the legal matter will be. 

Sometimes, we just don't want to do things like go to the doctor or see a lawyer.  If you are anything like me, you have probably done a Google search of your symptoms when you aren't feeling well.  After a short WebMD search, and convincing myself that I most likely have sarcoidosis, I usually go see the doctor.  And, thus far, when I leave his office, it is usually with a prescription and a prediction that I will be fine in a few days.   

Thursday, June 14, 2018

What Happens When You Die - Prologue

As a follow-up to the recent blog series about the estate administration process (read PART 1), I felt it was worth mentioning that there is a summary type administration process available in Illinois.

If the assets of a decedent are less than $100,000, there is a process that may be utilized called a "small estate affidavit" process. There are many times where a deceased may pass away and only own a vehicle or a nominal bank account in their own name. If that person has no creditors, the law recognizes that administering the decedent's estate may be cost prohibitive.

The Small Estate Affidavit can be presented to a financial institution or the Secretary of State and dictate where the assets of the deceased should be transferred. In some situations, this process is a very cost-efficient way to finalize the affairs of the estate. As with any legal proceeding, a competent attorney can give the best advice about whether or not the scenario lends itself to utilizing this process.

If I can make any broad generalizations about administering a Decedent's estate, it would be that it is always easier if the Deceased had written a Will. This single document usually makes things go much smoother for everyone.

If there is ever a legal topic that you would be interested in hearing about, I always welcome input. Thanks for reading. 

Thursday, June 7, 2018

What Happens When You Die Part 6

Previously, in PART 5, we discussed claims against the estate. After the claim period in the estate has run, the Personal Representative is then in a position to pay any outstanding debts and distribute any remaining assets. 
If sufficient assets exist in the estate to pay all the claimants, those claims will be paid first. Once a claimant is paid, they will file a Release of their claim with the Personal Representative or the Court, depending upon how the claim was filed.  
Thereafter, the remaining assets will be distributed to the beneficiaries/heirs. The Personal Representative has an obligation to account to the beneficiaries/heirs of the estate. This can be accomplished in one of two ways.  
The Personal Representative can send an Accounting and Proposed Distribution to all of the beneficiaries/heirs and ask that they sign off on that proposal. The Accounting will outline what assets have come into the control of the Personal Representative, what claims and expenses were paid, and how he or she is proposing to distribute what is left. If the beneficiaries/heirs all sign off, the Personal Representative can make the distributions and ask the Court to close the estate.
The Personal Representative may also file the Accounting and Proposed Distribution with the Court and ask for Court approval of that proposal. The Personal Representative, with the assistance of his or her attorney, would set a hearing before the Court to ask for that approval. All the beneficiaries/heirs would receive notice of the time and place of that hearing. They would be entitled, at that time, to raise any objections to the proposal. The Court would then make orders about how the estate should be distributed. 
At this point, our foray into the estate administration process has come to a close. Hopefully, this series has helped to somewhat demystify the process. Thanks for reading.   

Thursday, May 31, 2018

What Happens When You Die Part 5

Welcome back. The wonderful world of taxes is everyone's favorite topic. When it comes to estates and estate administration, "taxes" can take on many different meanings. Let's explore a few.

Estate Taxes

In the system we currently operate under, estates are potentially subject to a federal estate tax. Since we live in Illinois, an estate also may be subject to a state estate tax. (Many states do not have a state estate tax, but we have to fund the Chicago machine.) Any individual who passes away owning total assets that are less than $11,180,000 is currently exempt from any federal estate tax. This amount has recently increased substantially, and will affect only a small percentage of estates. The State estate tax exemption amount in Illinois is $4,000,000. These taxes, if imposed, are extremely punitive. (It is worth noting that this is a tax on money you were already taxed on during your lifetimes. Call your Congressman and tell him how ridiculous this is.) 

These estate tax exemption amounts can, and do, change from time to time. Even over the last ten years, these amounts have varied drastically.

Income Taxes

When an individual dies, the Personal Representative is charged with filing income tax returns for the deceased's last year of life. Those tax returns would be filed, if necessary, just as they were filed when the decedent was living.

In addition to filing a personal income tax return, the Personal Representative is also well advised to file income tax returns for the estate each year. The estate is a separate, taxable entity, so any income earned on assets of the estate during the administration of the same will need to be accounted for. Typically, the income is passed through to the beneficiaries by this filing. 

Inherited Assets and Tax Basis

With the exception of the taxes outlined above, there is no "inheritance tax" on assets inherited by a beneficiary. I supposed the government decided taxing assets 2-3 times was sufficient. An added benefit to a beneficiary of an estate is that the beneficiary gets a step-up in tax basis for inherited assets to the value at the date of death. (If that doesn't make sense, keep reading.)

The step-up in basis can be very advantageous if a beneficiary ever decides to sell an asset that has appreciated over the course of the deceased's lifetime. This is probably best illustrated with an example:

Deceased owned 40 acres of farm ground that he inherited from his father in 1953. The Deceased's tax basis in that asset would have been the value of the asset in 1953, which we will estimate to be $20,000. So, had the Deceased sold the asset in 2018 for $400,000, it would have been sold with a large gain. The Deceased would have been taxed on the difference between the sale price and the tax basis, or $380,000. If the Deceased's only son inherited the farm ground in 2018, after his father passed away, the son's tax basis in the ground is now the 2018 value, or $400,000. So, if the son sold the ground for $400,000, he would have no gain on the sale, and therefore no tax.

Next time, we will discuss finalizing the estate and how distributions are typically made.