Need Attorney Referral To Set Up Business Entity
O.K. Please bear with me because I am newer than new in this R.E.I. arena. Just starting out and learning all the ins & outs of the business, but I’m not sure that my business is set up properly for the best tax & asset protection advantage.
I own a home that was passed to me when my mother died-no mortgage, all equity selling for approximately $100,000. I had the property transferred into me & my H’s name a few years ago and we currently rent it out.
I formed a Corporation this past summer because I found this business interesting & intriguing and would like to learn all I can and slowly build up my holdings as I learn the right strategies.
I also have been faced with a very recent dilemma and need to make a decision quickly. My mother in law is getting up in age and is moving into a Senior building. She currently lives in the family home that was originally purchased & owned by her brother (who lives out of town and never lived in the home) for their mother (who is now passed) to live in. The home is titled in the brother’s name & my MIL’s name. Once their mother passed away, my MIL moved into the home, paid the taxes & insurance and upkeep. Well, it’s too much for her now and we are trying to find the best way for her to get out of the home with as little financial reporting responsibility as possible (the Senior aptmt. Rental Office will be looking at her financial records, I’m sure).
So, since reading here and other places, I realize I need to re-look at my business structure. Here are some of the things I have thought of:
1. I need a good attorney that specializes in setting up business entities, R.E. taxes and asset protection. Does anyone have a recommendation for me in the state of Maryland? Please. Anyone?
2. Maybe I-or my business-can purchase the house (I have the cash) and I can add to my growing business. This would make 2 homes, all equity. Could it be transferred from brother & MIL to my business entity as a gift? I want this all legitimate and for it to be an advantageous move for all. Any thoughts?
3. I think I’d like to get rid of the newly formed Corporation and create an LLC that holds title to both homes. Then place both homes into a Land Trust with the LLC as the beneficiary. Do I have that right, for anyone that knows anything about this? Please correct me & advise.
If I have not given enough information, please throw the questions out there. Thank you all.
newinvestor2006:
Answers
1. You may not want to spend the money having an attorney setup your business entity. Try http://www.instantinc.us.
2. You can use a Quick Claim Deed to transfer the property into a corporation or LLC.
3. Most people hold title in a Land Trust with the LLC as beneficiary.
Hope this helps <IMG SRC="images/forum/smilies/icon_smile.gif">[ Edited by ctsee11 on Date 11/08/2006 ]
newinvestor:
You can setup your own Land Trust, however, you should get an attorney to review it.
Yes the LLC or the already formed corporation can be the beneficiary.[ Edited by ctsee11 on Date 11/09/2006 ]
Thanks you all for your replies. Please keep them coming.
In Illinois I know you can pass title through " love and affection" instead of an inheritance or www.gift.There is no tax obligation this way. Most people put down $10 as their purchase price. However, I would definitely contact an attorney to make sure what your state requirements are.
Chris,
Most of the residential real estate transactions involve consideration in the form of the buyer’s promise to pay and the seller’s promise to convey legal title.
If earnest money has not been mentioned. Earnest money is not required to satisfy the element of consideration. Of course, if the agreement (which was based on consideration of a promise for a promise) requires earnest money as a condition of the contract, failure to pay it may give the seller a basis to terminate the contract. But don’t confuse this with consideration.
Consideration can be in many forms, including cash or a binding promise to perform. In the context of a real estate purchase agreement, "consideration is often in the form of bilateral promises to perform" as stated in the contract. For example, the buyer promises to pay a purchase price and the seller promises to convey marketable title.
Many deeds or contacts only say "For Valuable Consideration" so the $10 or $100 is not the basis of the consideration and would not make any difference.
John $Cash$ Locke
[addsig]
Although many of the so-called GURUs out there selling books and tapes are clueless about consideration, John is 100 percent correct. States go by the Uniform Commercial Code, so there is consistancy as it relates to Contract Law and to consideration (although real estate Contracts are exempt from many of the more stringent requirements the UCC imposes). In a real estate bilateral agreement, just putting a price in the Contract is sufficient, because the Seller is promising to convey the Deed for X dollars, and the Buyer is promising to pay X dollars. Any promise can be consideration, so long as both sides to the agreement can be reasonably expected to perform what was promised.
[addsig]
Chris,
I thought you were an real estate agent, broker or whatever, study up on what consideration is regarding a deed.
This a just a few deeds, one is from First American Title a very large company. Would you show me where the dollar amount is on these deeds?
GRANT DEED
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
hereby GRANT(S) to
the real property in the City of __________, County of ___________, State of California, described as
Here is one I have used many times in NC.
NORTH CAROLINA GENERAL WARRANTY DEED
Mail after recording to ___________________________________________________________________
This instrument prepared by _______________________________________________________________
Brief description for the index _____________________________________________________________
THIS DEED made this the, ____________ day of _______________________, 20 _____, by and between
GRANTOR GRANTEE
______________________________________________
The designation Grantor and Grantee as used herein shall include said parties, their heirs, successors, and assigns, and shall include singular, plural, masculine, feminine, or neuter as required by context.
WITNESSETH, that the Grantor, for a valuable consideration paid by the Grantee, the receipt of which is hereby acknowledged, has and by these presents does grant, bargain, sell and convey unto the Grantee in fee simple, that certain lot or parcel of land situated in the City of ________________________________. ____________________ Township, ____________________ County, North Carolina, and more particularly described as follows:
Maryland in checking uses a Warranty Deed and this is where the poster is from who started this thread.
WARRANTY DEED
For good and valuable consideration, the receipt of which is hereby acknowledged, we________________________________________ of _________________________________, County of_____________________ State of __________________________, hereby bargain, deed and convey to______________________________, as _________________________________, the following described land in _________________county, free and clear with WARRANTY
However, a person should consult an attorney if they are learning how to transfer a deed for the first time and to make sure it conforms to their states guidelines. Giving information in general on deed transfers is best left to those qualified to respond.
John $Cash$ Locke[ Edited by JohnLocke on Date 02/18/2007 ]
The Real Estate Commissioner takes a very dim view of mishandling of clients funds. Thats where I would start!
Report them to the Real Estate Commission in that state. That is if they are licensed as a broker/REALTOR
In Virginia you would contact the "Virginia Department of Professional and Occupational Regulation." However I would start with a Real Estate Attorney rather than a bureaucracy.
Jim
The only concern that stares me in the face is that considering POTENTIAL liability is in question, you are technically contractually obligated to reporting such a claim to your carrier. If you do not report it in a "timely manner" (or whatever the policy language dictates), they could deny a liability claim (if it turns into one)...
If you call the Agent to ask hypothetical questions, make sure the Agent knows the entire situation...
_________________
Best regards,
Tim
[ Edited by norrist on Date 02/20/2007 ][ Edited by norrist on Date 02/21/2007 ]