When you sell/purchase real property, you normally look for an agent or a broker. But you are not likely thinking about what the benefit would be if your broker was also an attorney. A real estate broker who is also an attorney can provide significant benefits over a real estate broker only. A real estate broker who is also an attorney can help you with the “Big Picture.” That is, they can integrate your estate plan, your business plan, and your tax plan with your real estate transactions as follows:
They can deal with any legal issues that are, or could be, associated with the property of which a broker alone is probably unaware. Even if a broker does have legal knowledge, they are not licensed to practice law and are unable to provide professional guidance with any such legal issue. No disrespect meant, but brokers who are not licensed attorneys just cannot provide such assistance. For example, if you are buying rental real property, should you put that property into an LLC to protect your assets from litigation? Additionally, attorney-brokers with tax knowledge can provide you with tax advice relating to the sale or purchase of real property in the State of California.
Perhaps most importantly, they can also integrate your sale or purchase of real property with an existing or a newly created estate plan involving a trust. Whether you are single or married (particularly with children), a home should be held by a trust. This action will assure that your property will not be subject to the jurisdiction of the Probate Court, which can result in unneeded expenses, stresses, and leaving your estate in limbo during the probate process.
If you do not have a trust, the attorney can draft it. If you have a trust, an attorney can prepare the deed to transfer the house into your trust. In some cases, you may want to put your home into a special trust to shield it from being attacked or taken from you by lawsuits, to reduce your estate value, or can be used to qualify for governmental benefits (i.e., Medi-Cal).
An Attorney-Broker can establish these trusts for you and integrate your home into your estate plan. An additional benefit is that the attorney will usually give you a discount on the estate plan and/or tax law issues. This can result in considerable savings over hiring an attorney and a broker.
In some cases, your primary objective is to find an attorney who can assist with trust administration or, God forbid if you do not have a trust, probate. Trust administration is the process used to manage and distribute trust assets after the death of a trust settlor if married, or the sole settlor if single. A very common situation is that at the death of a single individual or a surviving spouse, real property(ies) in the trust are sold to allow for distributions to beneficiaries. The settlor(s) who placed the house in the trust often have one or more children (if not other designated beneficiaries) who may not want to live in the house or other real property. The trustee thus may be put into a situation where they must sell the real property(ies), and the proceeds will then flow through the trust to the beneficiaries.
An Attorney-Broker can prepare the deeds and any other necessary documents, assist in the trust administration process, AND list and sell the propert(ies). Being able to perform the legal aspects of the trust administration process and also having the ability to list and sell property will provide efficiency in both processes at a “one-stop professional shop” instead of hiring two entities to communicate between themselves before any single action can be taken (resulting in higher billing from law firms). Due to the efficiency of an Attorney-Broker, they can consolidate these efforts which will result in the same result at a lesser, and often discounted, price.
A grantor who wants to avoid capital gains taxes on the sale of highly appreciated real property (or many other kinds of assets for that matter) can set up a charitable trust. Once the property is transferred into the charitable trust, it can be sold tax free by the trust. An Attorney-Broker can establish this trust as well as assist in the sale of the property, allowing any funds to be reinvested in a number of assets (real property, securities, bonds, etc.) which will grow in value void of capital gains tax assessments as well.
An attorney-broker will usually have fewer properties to sell, and as a result, they can devote more time to your property. In Trust Administration or Probate and other cases where the seller or buyer has already dealt with the attorney it saves the seller or buyer the time necessary to vet an agent or broker.
In conclusion, an Attorney-Broker can give you many benefits when buying or selling real property. In a non-estate sale or purchase, they can provide considerable legal expertise as well as a significant ability to market a property. In an estate management capacity, they can produce or administer a trust holding real property or navigate the probate process to allow for the sale of real property. They can also identify special purpose trusts when the need exists. In some cases, an attorney and broker will team up and act in much the same was as an Attorney-Broker, however, the Attorney-Broker will provide a streamlined process as a “one-shop professional stop.”
Sincerely,
Kent W. Meyer DRE #: 02126484
MBA, PhD, JD, LLM
President of
Traditions Law, PC
DRE #: 02221077