Real estate attorneys need deep knowledge about the business of buying, building and operating real estate assets. That practical knowledge is acquired only through experience and exposure to clients and deals, especially deals that go bad. It takes years to learn industry practices, many of which vary among different asset sectors.
Archive for Real Estate Law
Joint tenancy is a form of co-ownership where individuals hold an equal, undivided interest to a piece of property. When one joint tenant dies, the surviving joint tenant, by operation of law, automatically inherits the deceased joint tenant’s interest regardless of what any document, whether a will or a trust, dictates.
The statute of frauds is a collective term describing the various statutory provisions which render unenforceable certain types of contracts unless they are evidenced by a writing. The statute of frauds does not mean that oral agreements within the scope of the statute of frauds cannot be made and performed, or that they are illegal. It merely means that enforcement may be unavailable if one of the parties refuses to fulfill their obligations.
Most businesses benefit from having some form of standard agreement drafted for them. Although each business should have an agreement customized to their own situation, the standard agreement should be flexible enough to cover most of their common customer transactions.
In contrast to the standard agreement a business may use with their customers, there are times when a business owner should have a specific agreement drafted for a specific transaction. This would typically involve a unique or large transaction. For example, if a business owner wants to acquire another company as a way of expanding the business, an acquisition agreement may need to be drawn up. It is important that any transaction that requires significant negotiation is reduced to writing to help ensure that the deal is reached between the parties and is understood by all of them.
The grantor retained annuity trust (GRAT) is a well-known wealth transfer strategy for a low-interest rate environment. A GRAT is an irrevocable trust designed to transfer the appreciation on assets contributed to the trust with minimal or no gift tax consequences. GRATs are commonly used in advance of an IPO or sale of a privately held business, but cannot also be used successfully with other assets expected to appreciate significantly over the time frame established as the term of the trust
When establishing a grantor retained annuity trust (GRAT), the grantor transfers assets to the trust and retains an annuity interest for a term of years. The annuity interest is calculated as a percentage of the fair market value of the assets transferred to the trust determined on the date of transfer. At the end of the trust term, any assets remaining in the GRAT pass on to the trust remainder beneficiaries, often the grantor’s children.
The reason low-interest rates make grantor retained annuity trusts (GRATs) especially attractive is the tax treatment on appreciation of trust assets. The IRS rate in effect at the trust’s inception represents the assumed rate of return on the trust assets. If the assets perform well each year during the term of the trust, then the appreciation in excess of the Internal Revenue Code rate passes on to beneficiaries free of gift tax.
To avoid incurring a gift tax liability entirely, the grant must be zeroed out. This means the trust must be structured to return the maximum possible annuity to the grantor equal to the present value of assets contributed plus the expected appreciation based on Internal Revenue Code rates. At the end of the trust term, only appreciation in excess of Internal Revenue Code rate will remain in the trust and that appreciated value will pass to the beneficiaries tax free.
By definition, estate planning is a process designed to help you manage and preserve your assets while you are alive and to conserve and control their distribution after your death according to your goals and objectives. However, what estate planning means to you specifically depends on who you are as an individual – your age, health, wealth, lifestyle, life stage and goals, are several factors that can determine your particular estate planning needs.
Assembly Bill 241 adds a new Labor Code sec. 1540 prohibiting a domestic work employee who is a “personal attendant” from being employed more than nine hours on any work day or more than forty-five hours in the work week unless the employee receives one and half times the employee’s regular rate of pay for all hours worked over nine hours in any work day or forty-five hours in the work week.
AB 633 prevents an employer from prohibiting an employee from providing voluntary emergency medical services in response to a medical emergency.
Before starting any major negotiation or discussing any information about a start-up venture or your business, be sure to have a nondisclosure agreement in place.
Let’s assume you have received a draft contract for a particular transaction you are interested in doing. How should you read it? What should you look for and what should you leave for your lawyer? If you have outside general counsel on retainer, you could immediately share your agreement with your outside general counsel. The retainer would cover that service so there is no reason not to have your outside general counsel immediately involved. If you don’t have an attorney on retainer, what should you leave for your lawyer? Does the contract contain definitions? Does the contract clearly state what you will do and what the other party will do? Are the dollar amounts correct? Does the contract contain conditions? Does the contract provide remedies? Does the person who actually signed the contract have the authority to do so?
Do not assume that if something is not in the written contract it is still understood just because it was discussed. “Standard” contracts rarely exist.