Planning of Real Estate

Law or Rules of Real Estat

The Statute of Frauds is a really old law that originated in England in 1677. It requires that certain transactions must be in writing, signed by the party to be charged, basically the person being sued. Real estate purchases are one of the transactions covered by the statute of frauds. In real estate transactions, the SOF further requires that the writing contain a description of the property, a description of the parties, the price, and any agreed to conditions of price or payment.

There are a few exceptions to this rule. Part Performance is when someone has paid all or part of the purchase price, taken possession, and/or made substantial improvements to the land. For example, if Bob made an oral contract with Sue to buy property, paid her a down payment of 25% of the agreed purchase price, and built a house on the land, then even though the SOF would invalidate the oral contract, Sue could argue that Bob's partial performance proves the existence of the contract.

In addition to Part Performance, Equitable estoppel and Promissory estoppel may be used to prove an oral contract for the sale of land. Equitable estoppel is based upon an act or a representation. Promissory estoppel is based upon a promise.

Once a contract has been signed, a purchaser becomes an equitable owner of title at the time of the execution of a binding contract. Under the common law, the risk of loss is on the buyer after signing the contract for sale. In other words, if the house burns down between the signing of the contract and the closing, the risk is on the buyer. The buyer will still have to close the deal.

There are some states that have a different rule. States that have enacted the Uniform Vendor and Purchase Risk Act hold that the risk of loss is placed on the seller unless legal title or possession of the property has passed. There are a minority of states have passed this statute. So, in a majority of states, the risk of loss is on the buyer.

Surprisingly, its quite common for people to make oral contracts to sell parts of their property, not realizing it must be in writing. Later, when the buyer fails to pay, the seller is at a loss at how to proceed. An attorney familiar with the nuances of real estate law can help with this.

Few tips

According to experts, less than half of Americans have any estate-planning documents. But making arrangements for the time when you will be gone not only takes care of the people left behind, it also ensures that your bills are taken care of in the way that you desire. Here are a few estate planning tips that will guarantee your safe and efficient departure.

Write a Will

If you pass away without a will, the state may take over and divvy up your assets. Generally, spouses and children get first dibs, then other relatives like parents and siblings. If there is no family, assets go to the state. Also a will determines who will have custody of your children, if you were the last surviving parent.

Review Your Will/Trust Annually

Changes in your finances or personal relationships may necessitate a change in your final will. Since most of us don't know when we're going to die, dynamic life changes may require us to make updates to who gets what and how much. To not do so could lead to tension and arbitration among surviving members Acquire Life Insurance

At least make sure you have the basics covered when calculating how much life insurance may be necessary. Consider the summation of any outstanding debts you may have, your final expenses, and funds for savings goals, like college for the kids. With these costs covered, your family should be able to live comfortably on the reminder of your insurance.

Create Three Critical Additional Documents

Estate planning is about more than our final wishes, it also involves creating documents that determine what happens in case we are unable to take care of ourselves while we are living. A durable power of attorney lets you designate an agent to manage your finances and legal affairs.

A Release-of-information form gives doctors permission to share your medical records with designated others. Advance directives can give power of attorney for health care decisions while you are living.

Work with an Estate Planning Team

Depending on how complex your estate may be, you might need the assistance of a whole estate planning team. Designate a tax professional that can help minimize the amount of income taxes your beneficiaries will pay on their inheritances. A financial advisor will create a suitable investment portfolio for all your assets.

Also ensure that you hire a knowledgeable estate planning attorney. Estate planning attorneys help create wills and trusts, along with ensuring state and federal requirements are upheld. It is generally better to work with a local attorney, as they are most familiar with city and state laws.