Author: Hoffman & Forde, Attorneys at Law

What Does a Commercial Real Estate Lawyer Do and Do I Need One?

Posted on August 28, 2023 by - Commercial Real Estate

All real estate transactions are complicated, but commercial real estate tends to be much more so. Be it a lease or a purchase, the legal considerations are more complex, and there is generally more money on the line than in a residential real estate transaction. For these reasons, having the aid of a real estate attorney is even more critical in commercial real estate.

But what exactly does a commercial real estate lawyer do, and do you need one?

Contract Review

There are many potential factors to consider in a commercial real estate deal, from zoning restrictions to infrastructure requirements to maintenance responsibilities. If you plan to lease the property, you can’t make assumptions about what is or is not covered by the lease. Unlike residential leases where numerous consumer protections apply, in commercial real estate, you will be presumed to be knowledgeable about everything included (or not included) in the contracts.

A commercial real estate lawyer will be familiar with how these contracts work and can explain to you the benefits and drawbacks of each provision. You can know exactly what you’re getting into, which helps avoid problems further along in the process.

Negotiation & Closing

Commercial leases tend to be more negotiable than a typical residential lease, partly because there are so many more potential variables. For example, who is responsible for maintaining common areas, and is the landlord prohibited from leasing nearby property to competitors? Each of these variables can affect the value of the transaction for both parties.

An experienced attorney can zero in on these factors and ensure you get the best deal possible. The owner may be willing to make concessions or lower the rent in return for your assurances. Also, a lawyer who knows the market can help you spot a deal that  may be too good to be true.

Having an attorney is even more important if you’re purchasing the property. If you’ve ever purchased a house or apartment, you know how many steps there are before closing the deal. Commercial real estate is no different. Hiring a lawyer to help close the sale will save you time and effort.

Financing

Financing can be  pretty complicated in commercial real estate transactions, especially in the real estate development world. Owners, investors, brokers, and lenders may enter the picture, and boilerplate contracts simply won’t do. Commercial real estate attorneys can negotiate these complex arrangements and ensure you are protected in various contingencies.

Dispute Resolution & Workouts

Not everything always goes according to plan. Disputes arise between tenant and landlord, investors back out of deals, or sometimes business just slows down. A lawyer can help resolve these issues by negotiating with the other party (who often have attorneys of their own)  to minimize disruption to your business. For example, a landlord may be willing to accept lowered rent in exchange for a longer lease term. If the conflict can’t be settled, your attorney can  represent you in court.

Do You Need a Commercial Real Estate Lawyer?

Given the complexity and expense of commercial real estate transactions, it’s almost always worth consulting with an attorney specializing in these matters. They can review your paperwork and give you advice on how to proceed. Even this small amount of legal assistance can save you from major headaches later.

Our real estate team has years of experience in various areas, from representing clients in zoning applications to complex litigation. Schedule an appointment with our office to discuss your situation and explore your options.

Boundary and Title Disputes in California: Legal Insights

Posted on August 16, 2023 by - Residential Real Estate

Property lines are not always where you think they are, and sometimes, the owner of a piece of real estate is not clear. Such boundary and title disputes can completely upend your life, so it’s worth looking at some of their root causes and what can be done to resolve them.

What Is a Title Dispute?

A title dispute arises when two or more parties have competing claims to the same real property. For example, one person might build a house on a plot of land only to have another claim to own that very land. The legal proceeding for settling title disputes is called a “quiet title action” because the judge will determine the actual owner and therefore “quiet” any competing claims to the land.

Here are the most common causes of title disputes:

Boundary Disputes

Adjacent property owners can disagree on exactly where the boundary line is between their properties. See more details on this below

Problems with the Deed

Errors or discrepancies in the deed can create big problems later. Most commonly, the problem with the deed is an incomplete or inaccurate description of the parcel.

Easements

An easement is a non-possessory right in real estate, meaning the easement holder doesn’t own the land or have the right to live there but does have some right to use the land in a limited way. For example, a neighbor may have an easement that allows them to cross your property to access their land, or a municipal government may have an easement to build and maintain utility lines on your land.

What to Do in a Boundary Dispute

As mentioned above, boundary disputes are a type of title dispute in which two neighboring landowners can’t agree about who owns a particular part of their respective lands. Historical use, natural terrain features, and fence lines may contribute to this misunderstanding. The problem becomes even more complicated when one builds a structure, such as a home on the disputed part of the land.

If you find yourself involved in a boundary dispute, here is some guidance on handling the situation effectively.

1. Have the Land Surveyed

The first step in resolving the dispute is to determine where the official property lines are by commissioning a property survey. The surveyor will examine county records and plot out an accurate map of what you factually own.

2. Try to Come to an Agreement with Your Neighbor

It’s best to come to an amicable agreement with your neighbor if possible. This may be as simple as building a new fence or agreeing to stay off the property. However, some agreements, such as the granting of an easement, should be formalized in writing.

3. Bring in a Mediator

Sometimes, you may not be able to agree on your own, especially if structures are involved. Bringing in an outside mediator can often help both sides reach a reasonable resolution.

4. Litigation

Obviously, litigation is not anyone’s first choice; it’s expensive, time-consuming, and can breed animosity. In some situations, however, litigation may be your only recourse. If you haven’t already hired an attorney, you definitely should at this point.

Talk to a California Real Estate Lawyer

Real estate title disputes can be tricky to unravel, and they are best handled with the help of a real estate dispute attorney. Having a lawyer’s help can often prevent the situation from escalating and will ensure that your rights as a property owner are protected. To discuss your situation with an experienced professional and figure out how to move forward, contact our office today.

1031 Exchanges: What You Need to Know

Posted on July 20, 2023 by - Commercial Real Estate

Real estate investment is often an excellent choice for protecting and growing your wealth over the long term. When they are well planned, such investments can grow steadily in value and produce income in a predictable manner. 

A tax-deferred exchange, often called a 1031 exchange, can be an incredibly useful tool for anyone looking to manage the tax burden on their real estate investments, though the details can get complicated. Here we’ll explain the basics.

What Is a 1031 Exchange?

Named after Revenue Code section 1031, a 1031 exchange allows for “nonrecognition of gain or loss from exchanges solely in kind.” What does that mean? If you exchange one real estate investment property for another, any capital gains tax is deferred and the basis for the old property (i.e., the original purchase price, adjusted for costs of improvements, depreciation, etc.) is rolled over to the new property. 

Here is a stripped-down example that ignores complicating factors like depreciation and transaction costs:

You currently own property A, for which the basis is $200,000. You sell Property A for $250,000 and immediately reinvest the proceeds into purchasing Property B for $300,000. Typically, you would have to pay capital gains tax on the $50,000 gain you made on the sale of Property A, and the initial basis for Property B would be $300,000. 

However, if you file for a 1031 exchange deferral, you pay no capital gains tax (at least for now), and the basis for Property B would be $250,000 (the $200K basis from Property B + the $50K additional investment required for the purchase of Property B). If you were to later sell Property B for $400,000 and keep the proceeds, you would have to pay capital gains tax on the $150,000 gain ($400K – $250K) you made from the sale.

1031 Exchange Requirements

The IRS keeps a tight rein on 1031 exchanges, and several requirements must be met in order to qualify.

 

  1. Like-Kind Exchange
    This means the properties exchanged must be similar in nature. This is broadly defined so that any two investment properties within the United States are likely to be considered of like-kind.

 

  1. Must Be the Same Title Holder and Taxpayer
    The benefits of a 1031 exchange can’t be transferred to someone else. The title holder and taxpayer of the new property must be the same as that of the original property.

 

  1. No Property Held for Sale
    1031 exchanges apply to real estate held for business or investment purposes. If you are flipping houses, on the other hand, the deferral would probably not apply. 

 

  1. The New Property Must Be Identified Within 45 Days of Selling the Old Property
    The exchange does not need to be simultaneous (more on that below), but once you sell the original property you must identify the new property you plan to purchase within 45 days. This identification must be memorialized in a signed document.

 

  1. The Purchase Must be Completed Within 180 Days of the Sale
    The clock starts ticking once you close the sale of the original property. If you have not finalized the purchase of the new property within 180 days, you will have to pay capital gains tax on the proceeds.

 

  1. The Proceeds Must Be Held by a Qualified Intermediary
    The owner of the properties must never come into contact with the proceeds from the sale. Instead, the funds must be held by a “qualified intermediary.” This person or organization must be someone unrelated to the owner and has not had a financial relationship with the owner for the past two years. 

Types of 1031 Exchanges

There are four basic types of 1031 exchanges.

  1. Simultaneous Exchange

This means the transfer of the old property and the acquisition of the new property happen simultaneously.This can happen through a little swapping of properties, or a structured transaction involving the seller of the new property, facilitated by a qualified intermediary. While this is the simplest type of exchange, in theory, arranging  these transactions can be quite complicated.

  1. Delayed Exchange

In a delayed exchange, you can sell the original property (with the funds going to a qualified intermediary) and purchase the new property later, following the 45/180-day rules outlined above. Because this allows for more flexibility, it is the most common type of 1031 exchange.

  1. Reverse Exchange

In this type of exchange, you can acquire the new property before selling the original property. This has some benefits, such as taking advantage of a good purchase price and allowing you 180 days to see if the market value of your old property increases, however, these transactions typically have to be done in cash.

  1. Construction or Improvement Exchange

This allows you to sell the original property, transfer the new property to a qualified intermediary, use the proceeds from the sale to make improvements to the new property within 180 days, and then have the property finally transferred to you. This can be a very beneficial arrangement but also a complicated one.

Discuss Your 1031 Exchange with an Attorney

Depending on your situation, 1031 exchanges provide significant tax benefits that you don’t want to miss out on. However, they can also be quite complex and, if done improperly, result in a tax bill you may not be ready to pay. For this reason, it is recommended to plan the transaction in advance with the help of a legal professional.

Our real estate attorneys are familiar with all the requirements of a 1031 exchange and have the experience necessary to carry them out successfully. We can help you quickly formulate a plan that meets your financial goals and minimizes your overall tax burden.

Contact our office to schedule an appointment.

Partition Actions in California

Posted on July 10, 2023 by - Commercial Real Estate

Property ownership in California can be quite a lucrative investment. However, when a property has more than one owner, it is not unusual for conflict between parties or for their interests to diverge. A partition action may be the only remedy when that is the case.

What Is a Partition Action?

A partition action is a legal process in which a joint owner of real property forces the division of the property to sell it. It is based on the legal principle that someone who owns property has an absolute right to sell it. For this reason, once a partition action is begun, the other parties can’t stop the petitioner from dividing the property (unless they waived their rights in writing); they can only fight over the details of how it will be done.

They are common when multiple parties inherit a single piece of property or when multiple parties invest in real estate but cannot agree over its management.

Types of Partition Actions

There are 3 basic types of partition actions in California.

1. Partition by Sale

This is by far the most common type of partition in which the court will force the sale of the property and distribute the proceeds accordingly among co-owners who are tenants in common. 

Imagine three siblings inherit a house from their parents; most people are not interested in having a 1/3 interest in a house where they don’t live, and even fewer people are interested in buying such an interest. The most reasonable solution is typically to just sell the house.

2. Partition by Appraisal

Partition by appraisal is an alternative to partition by sale. In our inherited-house example above, imagine one of the siblings wishes to keep the house. One or both of the other siblings can seek a partition by appraisal in which the one who wants to keep the house buys out the interests of the others. This can only be done with the consent of all parties.

3. Partition in Kind

Partition in kind means the party is physically divided among the co-owners. In theory, this is the default form of partition under the law, but it often doesn’t apply. After all, you can’t physically divide a single-family house between three people. It is more appropriate when large pieces of land, such as farmland, can reasonably be divided into parcels. This tends to be a lengthy and complicated process.

Avoiding a Partition Action

Partitions can be long and expensive, so the best remedy is to prevent them from happening in the first place. 

When multiple parties choose to purchase real property together, they often assume they will always agree on important issues. That is rarely the case in practice and they should do their best to anticipate future disputes. For example, is each party free to sell their interest to whomever they wish, or must the other co-owners approve the sale? Or, more basically, what is the exact nature of each person’s interest in the property?

Regarding inherited property, the co-owners are often thrown into the situation with no advance notice. Creating a clear estate plan that guides how property should be divided can be very helpful.

Talk to an Attorney About Partitioning 

Whether you are considering filing a partition action or have been served with notice of a partition by another co-owner, you should meet with an attorney before proceeding. A clear understanding of property law is necessary to ensure the partition is done properly and your interests are fully protected.

Our legal team has plenty of experience in this area and can help you resolve your dispute out of court or represent you in the partition action itself. Contact our office to discuss your situation and create a plan for moving forward.

How to Set Up a Trust

Posted on June 23, 2023 by - Estate Planning

How to set up a trust

A trust is one of the most effective tools for creating a successful financial plan. They can reduce the overall tax burden, provide for your loved ones, and give you some control to ensure your wishes are carried out after you’re gone. However, trusts are also complicated legal arrangements that can be confusing, leaving some people wondering where to start.

Here we’ll review the basics and best practices of setting up a trust. We should say at the outset that we do not recommend attempting to create a trust on your own and strongly advise you to consult with an attorney to ensure your trust meets all legal requirements.

Trust Basics

A trust is a legal arrangement whereby one person holds property for the benefit of another. What does that mean? It’s easier to understand by thinking of the three principal parties to a trust: the settlor, the trustee, and the beneficiary.

The settlor (also called a grantor or trustor) is the person who creates the trust. They provide the property which will fund the trust, decide who will benefit from the arrangement, and define the rules by which the trust operates.

The beneficiary is the person who benefits from the arrangement. Put another way, the beneficiary is the person (or persons) whom the settlor wishes to help by creating the trust.

The trustee is the person who is responsible for managing the trust property and ensuring the terms of the trust are carried out.

Here’s an example: A single parent who owns an apartment building has a will that states that if they die before their child reaches age 25, the title to the apartment building will be transferred to a trust to be managed by their attorney. Any income generated by the building will be used to pay for the child’s care until they are 18, and then the child will receive monthly cash payments from the income until they are 25, at which point they take full ownership of the building. In the meantime, the attorney is responsible for maintaining the building, paying property taxes, etc., and is entitled to compensation for their efforts. In this scenario, the parent is the settlor, the child is the beneficiary, and the attorney is the trustee.

Setting Up the Trust

If you’re interested in creating a trust, follow these basic steps.

1. Define Your Goals

Trusts are a versatile tool that can be used for many purposes. You may wish to establish a charitable legacy, provide care for family members, or reduce the tax burden on your estate. Knowing your goals will help you make the best decisions for your trust.

2. Identify the Assets You Will Place in the Trust

Knowing your goals, consider the property at your disposal and how it can be used to fund the trust.

3. Identify Your Beneficiaries

Be clear on who you want to benefit from your trust. It can be anyone, from your spouse or children to a charitable foundation.

4. Decide Your Trustee

This is one of the most important decisions you’ll make. A trustee can be a family member, an attorney, or even an institution such as a bank. It should be someone you trust, but the trustee should also be someone who can handle financial matters, such as paying taxes and investing money. It is common for the attorney who drafted the trust documents to serve as trustee, but additional safeguards should be in place to ensure the attorney has not abused their position for their own gain.

5. Have an Attorney Draft the Documents

Trusts shouldn’t be handled on a DIY basis, as many rules must be followed. If done improperly, the result may be that your wishes are not followed after you pass away. Meet with a lawyer with experience in trusts, tell them what you want, and they should be capable of creating the necessary documents.  

Getting Started

If you know what you want or need help exploring your options for creating a trust, the next step is to meet with an attorney. Our estate-planning experts have years of experience drafting trusts, wills, and other legal instruments that will accomplish your goals and survive legal scrutiny if challenged.

To schedule your initial consultation, contact our office today.

Proposition 13: What Is It and How Can We Help

Posted on June 15, 2023 by - Law

Proposition 13

Proposition 13, or Prop 13 as it’s often called, is one of California’s more famous voter-approved propositions, as it has profoundly affected homeownership and the housing market in the state for over 40 years. Depending on who you ask, it’s been instrumental in keeping older people from losing their homes due to unreasonable tax increases, or it’s kept young people stuck perpetually renting their homes and primarily benefited corporations by slashing their property taxes.

Whether or not you agree with Proposition 13, it’s good to know the facts. Let’s discuss what it is and how having the services of a real estate attorney may help you navigate its intricacies and save you thousands of dollars per year.

What Is Proposition 13?

Prop 13 was an amendment to the California Constitution approved by state voters in 1978. It was meant to address the problem of California’s rapidly increasing home values resulting in massive increases in property taxes that could force people out of their homes. For example, a retired person who had purchased their home 30 years ago for $50,000 could quickly find their home assessed at a value of $300,000, which would cause a 600% spike in property taxes.

The key components of Prop 13 are:

  • Property taxes are capped at 1% of the property’s assessed value
  • While the same person holds the property, the total property tax can only increase at a maximum annual rate of 2%
  • When title to the real estate is transferred to another person, the value is then reassessed

Reassessment typically leads to higher property taxes for the new owner, as real estate prices in the state have traditionally risen at an annual rate far greater than 2%. Suppose the new assessed value is lower than the original assessed value (perhaps due to economic recession). In that case, the property’s value will be reassessed annually until it matches or exceeds the original assessed value. At this point, the normal 2% rules kick in.

Crucially, not all transfers of title will trigger a reassessment. Here are some of the most common scenarios in which a property can be transferred without reassessment.

  • Transfers between spouses
  • Transfers from parent to child
  • Transfers from grandparent to grandchild, if both parents of the grandchild are deceased
  • For people aged 55 or older, replacement of a principal residence of equal or lesser value in the same county or in one of the so-called “accommodating counties,” wherein the assessed value of the former home may be carried over to the new home
  • Transfer upon the owner’s death to a co-owner who has been residing at the property for more than a year before the other owner’s death

Taking Advantage of Proposition 13’s Benefits

Knowing how Prop 13 works and how to take full advantage of it can lead to significant tax savings. This is mainly accomplished by transferring the title in such a way as to avoid reassessment because, in case it wasn’t already clear, reassessment is seldom good. For example, a home with an assessed value of $150,000 could easily be reassessed at $500,000, with property taxes jumping from $1,500 to $5,000.

If you are planning on selling or gifting your home to a family member, domestic partner, or someone similar, it is a good idea to consult with an attorney to make sure that transfer is done in such a way as to avoid reassessment. Talking to one of our experienced real estate experts can save you or your loved ones thousands of dollars in unnecessary tax bills. To schedule a consultation, contact our office today.

Common Types of Real Estate Fraud

Posted on May 30, 2023 by - Residential Real Estate

real estate fraud

Real estate sales and purchases are the largest financial transactions that most people will ever make, typically involving hundreds of thousands of dollars. On top of that, the process can be unfamiliar and complicated. For these reasons, real estate fraud is unfortunately common.

How do you avoid becoming a victim of real estate fraud? The best way to protect yourself is by knowing the most common types of real estate fraud. Here’s a list to get your started!

Appraisal Fraud

Appraisal fraud is one of the most common types of real estate fraud, in which the seller or buyer uses a dishonest appraisal to misrepresent the property’s value. This may be done with an appraiser willing to estimate the property’s fair market value falsely. Alternatively, the buyer or seller may alter an appraisal to be more favorable.

What You Can Do

Get your appraisal, especially if the figures don’t sound right. Mortgage lenders are well aware of this practice and often insist on hiring an appraiser from an approved list.

Title Fraud

Sellers may attempt to conceal problems with the title, or simply sell a property that does not belong to them.

What You Can Do

Buyers should use a reputable escrow service and hire a professional to investigate the title before completing the purchase.

Home Equity and Home Renovation Fraud

It’s common for homeowners to get a home equity loan to pay off debts or finance property improvements. There’s nothing inherently wrong with this; being secured by the property, home equity loans often have lower interest rates than unsecured personal loans. Unfortunately, however, many predatory lenders operate in this field, and homeowners often end up paying far more than they expected.

Such lenders may lie about the loan terms, create false urgency to pressure homeowners into signing contracts before they can read them, or even sign blank ones.

What You Can Do

Be careful when taking out a home equity loan, because your home will be on the line. Don’t let lenders pressure you into signing anything you don’t fully understand.

Foreclosure Bailout Fraud

Foreclosure bailout fraud is particularly despicable, involving stealing from people desperately trying to keep their homes. Because foreclosures are public proceedings, scammers use court records to identify their targets. They contact homeowners and offer relief by arranging a short sale to the scammer, who will rent the property back to the owner after paying thousands of dollars in upfront fees. The scammer disappears with the fees, and the homeowner has lost time and money at a critical juncture.

What You Can Do

If you need to catch up on your mortgage payments, the best course of action is to open a line of communication with your lender and try to work something out.

Get Help from a Real Estate Attorney

Those who perpetrate real estate fraud take advantage of their victims’ relative lack of knowledge. The best defense is to have someone on your side with a deep knowledge of real estate transactions and law who can identify fraudulent behavior and keep it from derailing your life.

Our real estate litigation specialists can protect you from bad actors and ensure your transaction is efficient and fair. Contact our office to discuss your situation.

Benefits of Hiring a Real Estate Fraud Investigator for Your Case

Posted on May 19, 2023 by - Residential Real Estate

real estate fraud investigator for litigation

Real estate fraud can be particularly devastating. Not only are their large amounts of money on the line, but problems concerning our homes are uniquely stressful and emotional.

Unfortunately, real estate fraud is not uncommon. Unscrupulous people try to take advantage of the fact that most people are unfamiliar with these types of transactions and then disappear with thousands of dollars in ill-gotten gains.

Hiring a real estate attorney to investigate potential fraud is a great first step toward taking back control of the situation and hopefully recovering your money.

Investigating the Fraud

If you’ve fallen victim to real estate fraud, don’t beat yourself up over it. The people committing these acts are often very sophisticated in terms of technology and expertise. Now it’s time to get people on your side who have even more expertise to build a case against the fraudsters.

Building a fraud case means investigation and lots of it. There can be many paperwork, interviews, and even surveillance to sift through. The benefits of hiring a real estate fraud investigator are numerous. Fraud investigators know what they are looking for, where to look, and how to do it lawfully. Furthermore, an experienced investigator will know how to proceed swiftly, which is important for resolving the case promptly and ensuring you don’t miss crucial court deadlines.

Because the goal of a fraud investigation is ultimately litigation, it makes more sense to go ahead and hire an attorney rather than a private investigator. Law firms can typically carry out their investigations and hire specialists if and when necessary. This way, all the work is centrally coordinated for one purpose: litigating your case and getting your money back.

Pursuing Your Claim in Court

It’s like fraud cases; even when confronted with irrefutable evidence of their wrongdoing, the guilty party rarely says, “You got me; here’s your money.” You will likely have to claw any money back through the court system to recover it.

Like other types of litigation, real estate fraud claims can take a long time to resolve. As a “white collar” type of case, they can also be quite complicated. That’s when you’be glad you hired an investigator to uncover evidence that will stand up to legal scrutiny.

Pursuing your claim in court may be your only option, but it’s not something you should try to do on your own. Instead, hiring a real estate litigation attorney is the best way to go.

Talk to a Real Estate Fraud Specialist

The most effective way to fight against real estate fraud is to bring in outside help—people who can investigate your case, negotiate on your behalf, and take your claim to court. At Hoffman & Forde, our attorneys have years of experience handling real estate transactions and litigation in California. We know how to uncover fraudulent activity and pursue a resolution that’s fair for you.  Contact our office to set an appointment for your first consultation.

Reasons to Hire a Real Estate Attorney When Buying or Selling Commercial Property

Posted on April 24, 2023 by - Commercial Real Estate

commercial real estate attorney

Buying and selling commercial property is a complex process—yet many people are reluctant to hire a real estate attorney because they are worried about additional costs. In truth, the benefits of having a commercial real estate attorney far outweigh the costs. 

A skilled commercial real estate attorney can help you avoid costly mistakes, ensuring a smoother, less stressful transaction. But that’s just the start. Here are a few more reasons to hire a commercial real estate attorney when buying or selling commercial property.  

Protect Your Interests

Real estate attorneys have specialized knowledge and experience in dealing with the legalities surrounding commercial real estate transactions. Because of this, they can protect your interests, ensure that the contract terms are reasonable and that you receive a fair deal. Additionally, a real estate attorney can assist you with any issues that may arise following the purchase of your property, including environmental or structural problems. 

Identify Suspicious Terms

A real estate attorney’s expertise in commercial real estate transactions includes analyzing contracts and identifying suspicious terms or potential pitfalls that could harm their clients. They can also recognize zoning or environmental concerns that may impact the property, thus protecting their clients’ interests throughout the transaction process. 

Smoother Closing Transaction 

State laws vary, but even if your state does not require you to hire an attorney when closing on a property, we recommend it for a few reasons. First, an attorney can help prepare and review all documents and contracts to ensure they are accurate and compliant with laws and regulations. Second, an attorney can mediate between you and lenders, title companies, and real estate agents.  

Increase the Marketability of Your Property

Sellers also have much to gain by working with a real estate attorney. For example, suppose your property has a lien or structural issues. In that case, an attorney can negotiate with lienholders to reach a settlement or help the seller fix structural issues by connecting them with reputable contractors or engineers. 

Attorneys can also offer advice on how to disclose these issues to potential buyers in a way that does not discourage them from making an offer. 

Save Time

An experienced real estate attorney can also help buyers and sellers save time by handling legal issues related to the transaction, such as reviewing contracts, negotiating terms, and ensuring all necessary documents are properly completed and filed. 

This can help prevent delays and ensure a smoother, more efficient transaction process.  Additionally, if any legal issues or disputes arise during the transaction, the attorney can help resolve them quickly and efficiently, which can save time and ensure you avoid legal battles. 

Talk to a Real Estate Attorney

If you need legal assistance with buying or selling commercial property, including reviewing contracts, identifying potential pitfalls, and facilitating a smoother closing transaction, look no further than Hoffman & Forde. Our team of experienced real estate attorneys is perfectly suited to help you navigate the complexities of the commercial real estate market in San Diego, Los Angeles, or Orange County. Contact us today to see how we can protect your interests and ensure a successful transaction.

Wills vs. Trusts: What’s the Difference?

Posted on April 17, 2023 by - Estate Planning

wills vs trusts

Estate planning can be confusing, especially when understanding the differences between wills and trusts. While both documents allow you to distribute your assets and property to loved ones after you pass away, they serve different purposes and have unique advantages and disadvantages.  

If you’re unsure which option is right for you, keep reading. We’ll explain the differences between wills vs. trusts so you can make an informed decision and protect your assets. 

Wills: A Brief Overview

A will is a legal document that ensures your assets and property go to the right people after you pass away. But a will can also be used to name individuals who will manage your state, care for your children, or even outline your burial wishes. 

Your will must be signed and witnessed according to each state’s rules to be considered a valid, legal document. And after you die, your executor must take your will to probate court to make it official. After that, your will will be subject to public record. 

Trusts: A Brief Overview

A trust is a legal arrangement where an individual transfers their assets to a trustee who manages them according to their wishes. The trustee must follow the rules that the individual sets up for how those assets should be managed and who should receive them.

To better understand the difference between a will and a trust, think of a will as a set of instructions that tells beneficiaries what to do with their assets once they pass away. On the other hand, a trust is more like a container that holds your assets, which a trustee then manages.

Advantages of a Will 

There are several advantages to having a will instead of a trust. However, keep in mind that these advantages are unique to your circumstances and goals:  

  • Simplicity: Generally, a will is a simpler document that requires less time and money to prepare than a trust, making it a good option if your assets are small and your instructions are straightforward. 
  • Flexibility: Wills can be changed or updated relatively easily, allowing for greater flexibility. 
  • No trustee necessary: When choosing a will, you do not have to appoint a trustee to manage your assets, simplifying the estate planning process. 

Advantages of a Trust 

Trusts also have several unique advantages over wills, including: 

  • No probate: Probate is a court-supervised process that can be time-consuming and expensive. It can also tie up your assets for months or even years. A trust ensures you avoid probate altogether. 
  • Increased privacy: Unlike wills, which become part of the public record, trusts remain confidential. 
  • Increased control: A trust also gives you more control over how your assets are distributed to beneficiaries and under what circumstances. 

Wills vs. Trusts: Which is Right for Me? 

The answer to this question depends on several factors, including the size and complexity of your estate, your goals for distributing your assets, and your preferences for managing your assets during your lifetime.

Generally speaking, a will may be the best option if you have a simple estate with few assets and straightforward distribution goals. But if you have a larger or more complex estate, a trust may give you the control, flexibility, and privacy you need to manage your assets successfully. 

It’s also important to consider other factors, such as the potential tax implications of your estate plan and your desire for privacy and asset protection. 

Talk to an Estate-Planning Specialist

If you need legal assistance with estate planning, including wills, trusts, and probate matters, contact Hoffman & Forde. Our team of estate planning attorneys is perfectly suited to help you plan for the future and protect your loved ones. With our extensive expertise, we can provide the protection your estate needs in San Diego, Los Angeles, or Orange County. Contact us to schedule an initial consultation.