Posts Tagged ‘law’

Why Homeowners Need an Estate Plan

Tuesday, April 10th, 2018

As a real estate broker and attorney, I always advise my clients to hold their properties in trust, and to execute a complete estate plan. This offers peace of mind in times of difficulty and as the population ages. The great thing is that documents like living trusts can be modified during your lifetime as needed, such as when the family grows, upon acquisition of other property, or when other life changes like illness or divorce occur.

An estate plan can provide several benefits:

1. Avoidance of probate proceedings
2. Protection of your family and loved ones – A properly drafted estate plan protects your minor children in the event that both parents die or can no longer care for them. It can also shield a spouse from creditors and protect adult beneficiaries in divorce situations.
3. Estate tax reduction – there are different tools to help with lowering estate taxes, so speak with your estate planning attorney
4. Protection from creditors. An estate plan can identify assets and help protect them from creditors after your death.

If you are thinking of creating an estate plan (you definitely should be thinking about it if you own real estate), it is time to get started. You will need to collect information to provide your attorney, so find a good estate planning lawyer.

Here are the documents you may want to incorporate into your estate plan:

1. Trust: Holding title to real estate in a trust enables you to appoint executors of your estate so that your wishes are adhered to properly when you die. It also avoids the costs of an estate sale and court time to determine who inherits the property. Just as importantly, if you have minor children you will be able to identify guardians to raise them should anything happen to you and your significant other, as well as appoint conservators to oversee financial needs of the minors. If your children are adults but poor with finances (or have partners who are not efficient planners), you can specify how and when they will receive their inheritance within your estate plan.

2. Will. This will specify your wishes regarding a host of issues like who will inherit personal items and the disposition of your assets. You can make changes to these documents due to the passing of relatives, age and health of family members. Make sure you specify your goals to your attorney.

3. Power of attorney. This allows you to name who will pay your bills, sign tax returns and sell any needed assets. Without a power of attorney the state will appoint someone to oversee such issues, so it is best to name those you choose to handle the task.

4. Health care directives and DNR. This will allow you to appoint the person who will make medical decisions for you if you are unable to do so yourself. I suggest including a DNR (do not resuscitate) if it is your desire not to be kept on life support when you are unable to breathe on your own. It is hard to think about such situations when you are healthy but it is necessary, and could save your loved ones from having to make painful decisions.

Depending on your net worth and the particulars of your assets, you can have estate planning documents drafted that range from the simple to heavily detailed. But no matter what you need, my advice to you as a lawyer and real estate broker, is to get started. Speak with an estate planning attorney to find out what you need to protect yourself and your family – make sure your legacy is left to your heirs or whatever organizations you choose.

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5 Top Ethics Errors Made by Real Estate Agents

Friday, February 12th, 2016

If you are a regular reader you know that I have a thing for ethics and those who violate the boundaries of professionalism in any field. We’ve all known of someone who crosses or has crossed the line. The real estate industry is no exception. Here are the most common ethics breaches made by real estate agents: Ethics

1. Going after other agents’ clients. Amazing, but yes there are slimy people out there. This actually just happened to me – another agent took advantage of my client in a very sneaky way. When an agent knows that someone is a client of another agent, to go after that person in order to get them to work with you is not just unethical, but it’s nasty. Karma will get all those people one day, but they really should not be in the business if they cannot be professional and respectful. That agent’s reputation will suffer, especially among area agents.

2. Not disclosing relevant information. This happens all too often. Some agents actually advise their sellers to NOT disclose information that could affect a sale – such as problems that have occurred in the home (broken pipes, electrical problems, roof leaks, etc.). Again, not only is this an ethical violation but it is illegal. Many lawsuits are initiated because buyers were not made aware of past problems – it is one of the main reasons for real estate lawsuits. I tell all my sellers that it is better to over-disclose than leave anything out. If you lay it out on the table it is up to the buyer to check out any issues and make informed decisions.

3. Telling home inspectors not to notify of problems or directing what should/should not be in a report. It is hard to believe but there are agents who do this. One home inspector told me that a successful area agent once told him not to notify him (the agent) of any problems concerning the roof, and to leave them out of the report! I couldn’t believe that. That is far more than an ethical violation – it is illegal. Things like this apparently go on all the time. Thus the reason you need an excellent home inspector that you trust, and also whom your client can trust. Mine is also a civil engineer and a licensed contractor – a little piece of mind goes a long way in preventing problems and legal action down the road.

4. Taking referral fees from lenders or others specified by law or statute as not allowable. This is a big no-no: unethical and also illegal.

5. Giving a client advice that is not in their best interests in order to secure a sale. Clients need to make their own decisions on whether or not to buy or sell a property. The role of the agent is to make sure the client receives all the pertinent information in order to make an informed decision. I never make decisions for my clients – rather, I offer my expertise in answering their questions and concerns. If there are problems with the property that are inherent and could cause issues down the road, I always point that out and suggest expert advice when needed. The ultimate decision belongs to the client – our role is to facilitate providing information. Encouraging a client to buy or sell when it may not be in their best interests is unethical.


There are many other glaring examples of ethical breaches in the real estate industry, and there is always the agent who invents a new one. But the above 5 examples are perhaps the most dangerous because they are crossing over into breaking laws and could have legal consequences. This is why all agents need strong training programs and continuing education to keep them abreast of new rules and laws.

The real estate industry needs to crack down on agent training and make cross-the-board mandatory programs, as well as stricter licensing requirements. Brokers also need to take responsibility with stricter oversight of their agents (if I was paid $1 for every time I had to call another broker to report something their agent did that jeopardized a contract, I would have a lot of dollars). Until such changes are set in motion we will unfortunately see more ethical/legal violations in the industry.

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