In the past, successful defenses against foreclosure were relatively rare. Since the foreclosure crisis and great recession, however, many homeowners have successfully challenged foreclosure actions. The rise in the number of successful defenses to foreclosure is due, in large part, to the unearthing of more and more evidence that the mortgage servicing industry has been rife with errors. Because of this evidence, courts that once rubber-stamped foreclosure actions have shifted their sympathies towards homeowners. Homeowners and their attorneys may take advantage of this change in judicial attitude and challenge foreclosure actions in many different ways. Some of the most common defenses to foreclosure include: Common Foreclosure DefensesA foreclosure attorney is often able to raise one or more different types of defenses. Below is a description of a few common foreclosure defenses. The Foreclosing Bank Didn’t Follow State ProceduresEach state has specific procedures for foreclosures. In some cases, the foreclosing bank doesn’t follow state procedural requirements for bringing a foreclosure action. In this scenario, you might be able to challenge the foreclosure. If your challenge is successful, the court will issue an order requiring the foreclosing bank to start over. Be aware, though, that virtually all judges will overlook inconsequential errors, like the misspelling of a name. Similarly, if the foreclosing bank’s mistake doesn’t actually cause you any harm, it might not be worth fighting over. More serious violations will get a more serious response from the court. The Foreclosing Party Can’t Prove It Owns the Loan (It Lacks “Standing”)Only the loan holder (the loan owner or someone acting on the owner’s behalf) may foreclose. If the foreclosing party can’t prove it owns the loan, then it doesn’t have “standing” to foreclose. Banks sometimes have trouble producing the promissory note proving loan ownership. In many cases, the debt has been sold to different banks and investors, sometimes over and over again. If the loan was bundled and securitized, determining if the foreclosing party owns it can be even more of a challenge. Even in situations where the original note is available, the endorsements sometimes aren’t in order, or an assignment might be missing. These days, banks and investors are pretty careful about addressing any gaps in their paperwork before initiating a foreclosure. Also, courts all over the country have heard many cases on standing and have decided against homeowners in many situations. It’s now much more difficult to win your case based on a standing argument; though, your case might be the exception. The Mortgage Servicer Made a Serious MistakeMortgage servicers often make mistakes when they’re dealing with borrowers and their accounts. You might be able to challenge the foreclosure based on errors like: Mistakes on the amount you must pay to reinstate your mortgage are especially serious. An overstated amount might deprive you of the main remedy available to keep your home. For example, suppose the mortgage holder says you owe $4,500 to reinstate when, in fact, you owe only $3,000 (perhaps because it imposed improper or unreasonable costs and fees). In that situation, you might not have been able to take advantage of reinstatement. Say you could have afforded $3,000, but not $4,500. You’re a Service member on Active Duty Protected By the Service members Civil Relief ActIf you’re on active military duty, the Service members Civil Relief Act (SCRA) provides you with special protections. Most importantly, if you took out your mortgage before you were on active duty, your foreclosure must take place in court even if foreclosures in your state customarily occur outside of court, unless the lender gets a waiver from you. If a military member gets a mortgage after going on active duty, the SCRA provides certain foreclosure protections too. The Statute of Limitations Has PassedIf a significant amount of time lapses between when you stop making your mortgage payments and when the lender initiates a foreclosure (or restarts one against you), the action might violate the statute of limitations. When applicable, the statute of limitations can be a strong defense against a foreclosure. Defective Affidavits and DeclarationsGenerally, when people think of defective foreclosure affidavits, the first thing that comes to mind is the rob signing scandal where loan servicers filed thousands of unverified, fraudulent affidavits in judicial foreclosures. But, defective declarations which are similar to affidavits can be an issue in non-judicial foreclosures as well. Judicial Foreclosure AffidavitsTypically, in a judicial foreclosure, the loan owner (the foreclosing party) must complete a written statement signed under oath, which is called an “affidavit,” to get a final judgment of foreclosure. The affidavit usually includes information like: These affidavits are often called “affidavits of indebtedness.” The affidavit information is supposed to be truthful, accurate, and adequately supported by file documentation. A person, usually a bank employee, reviews the loan documents and signs the affidavit. At least, that’s how it’s supposed to work. Declarations in Non-judicial ForeclosuresSome states require specific declarations, which are similar to affidavits, in non-judicial foreclosures. A declaration is a formal statement of facts concerning the case. But unlike an affidavit, it is unsworn. In Utah or California foreclosure, for example, the lender or servicer has to complete a loss mitigation declaration as part of the non-judicial foreclosure process. The foreclosure can’t start either by the issuance of a notice of default or recording a notice of default until the lender or servicer has: How to Raise a Defense to ForeclosureTo raise a defense to a foreclosure action, you must bring the issue before a judge. In about half the states where foreclosures are judicial, which means the foreclosure is accomplished through a civil lawsuit; you automatically get a chance to tell your side of the story to a court. In the other states, foreclosures typically take place outside of court (non-judicial foreclosures), and you have no automatic means to mount a legal challenge. To have your defenses ruled on by a judge in these states, you have to file a lawsuit alleging that the foreclosure is illegal for some reason and asking the court to put the foreclosure on hold pending the court’s review of the case. Why Use a Foreclosure Defense Attorney?The market is officially saturated with self proclaimed “foreclosure rescue consultants” and dozens of companies seeking to grab money from financially distressed families who are in a panic. To make matters worse, several entities calling themselves law firms or legal groups have become glorified processing centers and illegal partnerships, where clients don’t even speak to a lawyer. Who can you trust from start to finish? What if the lender doesn’t approve your request? A licensed attorney can help you execute any and every option available. The last couple of years have been quite unstable for the housing market. People are facing foreclosure and losing their homes. According to statistics, in Florida 6% of all the mortgages are facing foreclosure proceedings. Options for Homeowners to Avoid ForeclosureThe fact is that for vast majority of people foreclosures are stressful, confusing and overwhelming because they do not know much about the foreclosure proceeding. They are not aware of the fact that there are options available to them that can help them avoid foreclosure proceedings. Here is a quick breakdown of the most popular options: Loan ModificationA specialized foreclosure defense attorney can lay out the options available to homeowners who are facing foreclosure. Under the Housing Bill, homeowners facing foreclosure can go for loan modification. Assistance of a foreclosure defense attorney can help a homeowner negotiate the mortgage modification with the lenders. Short SaleStill another option that homeowners have is that of short sale. Under this option the homeowner will sell the mortgaged property for less than balance owed on the loan. The proceeds of the sale are given to the lender. Before the sale, the short sale lawyer will negotiate with the bank. The short sale attorney will convince the bank that due to economic or financial hardship, the bank should agree to a discount the loan balance. Therefore, after the house is sold the remaining balance is discounted. Deed In LieuAnother way that a homeowner can avoid foreclosure is by opting for deed in lieu. The homeowner’s real estate attorney will negotiate with the lender. The homeowner will sign over the deed or title of the property to the bank and the bank in return will cancel the mortgage. BankruptcyAnother option that a real estate lawyer can suggest to a homeowner is that of filing bankruptcy. This will not only stop all foreclosure proceedings but will also give a chance to the homeowner to repay some of the debt and retain the house. RefinancingA Utah real estate attorney can also suggest the option of refinancing to avoid foreclosure. Refinancing simply means that the homeowner replaces the existing mortgage with a new one. In most cases, the new mortgage comes with lower interest rates and better terms and conditions. Reverse MortgageA very good option that a foreclosure defense attorney might suggest is that of reverse mortgage. This is imply a loan against the property. A homeowner does not need to repay the loan as long as he/she lives there. However, this option is mostly available to those who own the property and are over 62 years of age. Contesting ForeclosureIn many cases it has been seen that homeowners can successfully contest foreclosure proceeding. A foreclosure defense Jacksonville lawyer can help homeowners find the legal grounds on which the proceedings can be challenged. It might be possible that the mortgage company has filed the foreclosure proceedings illegally. A cautious attentive homeowner with the help of a foreclosure defense Florida attorney will be able to figure out what is illegal about the proceedings. Are There Any Legal Defenses Against Foreclosures?The very idea that you could lose your house is a very scary and stressful thought. This matter can be made even worse when you do not believe you have any way to defend yourself against a foreclosure action. However, there are some legal defenses that you can use when facing an action for foreclosure. Although many foreclosure legal defenses will depend on state law and the facts of a specific case, the following are some general foreclosure legal defenses that you might be able to use in such a case: Free Initial Consultation with LawyerIt’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
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What Is A Temporary Restraining Order (TRO)? Divorce Lawyer and Family Law Attorneys Ascent Law St. George Utah OfficeAscent Law Ogden Utah Officevia Ascent Law, LLC https://www.ascentlawfirm.com/what-is-a-foreclosure-defense/
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A temporary restraining order (TRO) is a court order that’s aimed at preventing someone from taking particular actions but only for a certain amount of time. Most people associate TROs with domestic violence. However, these temporary orders may also address dangerous situations outside of your family such as stalking or sexual violence. And some TROs have nothing to do with violence or threats, such as the orders meant to maintain the status quo in a couple’s finances while a divorce case is ongoing. Here’s an overview of the common types of TROs and how they work. A temporary restraining order (TRO) is a compelling legal option for anyone facing domestic violence. It is a court order that protects a person or persons from physical, mental, verbal, or other abuse. It can require the abuser to keep at least 100 yards away from the victim, enforceable by arrest. It can be filed against a spouse, ex-spouse, parent of a child, boyfriend, girlfriend, grandparent, or anyone else initiating harm. And under some circumstances it can prohibit the abuser from purchasing a firearm. If you are facing domestic violence, there is help and there are legal steps you can take to pull you and your family out of harm’s way. If you are ready to take action and pursue a temporary restraining order, here are some important things to keep in mind: Temporary Orders to Prevent Domestic ViolenceUnder state law, people who are in danger of violence or abuse from a family member may request a court order meant to stop the abuse and protect the person asking for the order (usually known as the “applicant” or “petitioner”). Depending on the state, these orders go by different names, including domestic (or family) violence protective orders, injunctions for protection against domestic violence, or orders of protection. If it appears to be an urgent situation, the judge may issue a temporary order that takes effect immediately but lasts only for a certain period of time. These TROs are sometimes called “ex parte” orders—a legal term for orders that a judge issues based only on the information in the request, without hearing from the person who’s the subject of the order (the “defendant” or “respondent”). Who May Get a Domestic Violence TRO?Historically, domestic violence TROs were limited to petitioners who are in danger of abuse from close relatives, including current and former spouses. But some states include more relatives than others. Also, many states have expanded the definition of domestic violence to include abuse between people in relationships beyond traditional families, such as: Even if you’re in a qualifying relationship with your abuser, your ability to get a TRO in your situation will depend on how your state defines abuse. In some states, your abuser must have already committed a crime against you like assault, stalking, threats of immediate violence, or criminal property damage. Other states allow protective orders in a wider range of situations. In Utah, for instance, abuse includes behaviors like making annoying phone calls, impersonating the victim online, and destroying the victim’s “mental or emotional calm.” Can You Get a TRO Against Someone Not in Your Family or Household?If you’re dealing with abuse or threats of violence in a situation that doesn’t involve family, household members, or other intimates, you might still be able to get a TRO. Some states have special laws dealing with TROs to prevent: As with domestic violence TROs, you may use a simplified procedure—when it’s allowed in your state—to apply for one of these orders (more on that below). Temporary Restraining Orders in Divorce CasesIn the context of family matters, there’s another type of TRO that’s common in divorces. Although they might also address potential abuse, these TROs are more typically aimed at maintaining the status quo in a couple’s finances and access to their children while the divorce case is ongoing. For instance, TROs issued in divorces often prohibit either spouse from: How Do You Get a TRO?The procedure for getting a TRO depends on the circumstances and the law in your state. Applying for a Domestic Violence TROIn domestic violence cases, you can apply for a TRO directly with the court clerk (usually at the Family Court). You’ll need to fill out some forms. Most state courts have self-help centers that will provide information and assistance with the process. Some states, like Utah, provide the application forms and instructions online. Generally, you’ll need to give details about when the respondent has hurt or threatened you, as well as the specific orders you’re requesting. . Of course, you should call 911 if you’re in immediate danger. After officers arrive, they might contact a judge and request an order for you. Otherwise, you might need to go to the court yourself once the police have defused the situation, taken the abuser into custody, or simply made sure you could leave. You can also call the police if you need an immediate order when the courts are closed, even if your abuser isn’t with you at the time (for instance, when you’re receiving threats of immediate violence over the phone). After investigating, officers will probably contact an on-call judge to request an order. The judge might want to talk with you before deciding whether to grant the request. The judge who reviews your request will decide if a temporary order is necessary to protect your safety under the standards in your state and based on the information you’ve provided. For instance, judges in Texas will issue temporary ex parte protective orders if they find that there’s a “clear and present danger of family violence,” as that is defined under state law. If the judge decides that your situation doesn’t meet the requirements for a TRO, you may still be able to get a protective order. But you’ll have to wait for a hearing, and the respondent will have the right to be there and argue against the order. Applying for Non–Domestic Violence TROIn states with specific laws that allow protective orders in some non-domestic violence situations, like stalking and sexual violence, you should be able to apply under a similar, simplified procedure. However, the standards for issuing these orders are usually stricter than in cases of domestic abuse. With some types of TROs, the victim or potential victim doesn’t actually apply for the order. For instance, employers may apply for workplace violence restraining orders to protect an employee from violence or threats at the workplace. And in some states, law enforcement or certain school employees may apply for a restraining order to prevent gun violence. In situations that don’t involve domestic violence and aren’t covered by a special law in your state, the standard procedure is to file an Order to Show Cause (OSC) with the court and seek a TRO as part of your application. An OSC is way of getting your request in front of a judge relatively quickly. But you should know that preparing and filing an OSC ordinarily requires knowledge of court rules and regulations, so you’ll very likely need to get help from a lawyer. When Do You Need to Apply for a TRO in Your Divorce?In some states, as soon as one spouses files the initial divorce papers and serves them on the other spouse, standard TROs dealing with finances and related matters are automatically effective. These “ATROs” are usually spelled out in the divorce petition or other documents included in the paperwork. In other states, you must specifically request these TROs from the court where your divorce was filed. Most TROs remain in effect until there’s a hearing where the petitioner and the respondent may appear before a judge, present evidence, and argue for or against a longer-lasting order. How Long Do Temporary Restraining Orders Last?Most TROs remain in effect until there’s a hearing where the petitioner and the respondent may appear before a judge, present evidence, and argue for or against a longer-lasting order. The hearing generally must take place within a certain period of time—usually within about two or three weeks. Some states allow emergency TROs that last even a shorter amount of time. In California, for instance, when a judge issues an emergency ex parte protective order to a police officer at a scene of domestic violence, the order will last for only five court business days or seven calendar days. Then, if you want a regular TRO that will last until the hearing, you’ll need to go to court and apply for it. TROs that are imposed as part of a divorce usually last until the divorce is final—which could be several months or even years in some cases. What Should You Do When There’s a TRO Against You?If a judge has issued a TRO against you, you’ll receive a copy of the order and a notice about an upcoming court hearing. The order will detail everything you are ordered not to do. It might also include actions you must take. It’s very important that you show up for the hearing, and that you obey the temporary order in the meantime. Violating a restraining order is a serious offense that could land you in jail. Even without that result, it would work against you at the hearing. Learn more about how to defend against a restraining order. What If a Restraining Order Conflicts With Another Court Order?If there are two conflicting court orders affecting the same person, the most recent order typically prevails. As a practical matter, the judge will probably be made aware of the potential conflict and will address it when issuing the current order. For example, let’s say there’s been a custody order that calls for the parent who doesn’t live with the children (the noncustodial parent) to pick up and drop off the kids after visitation at the home where they live with the custodial parent. But later, a judge orders the noncustodial parent to stay away from the custodial parent’s home because of domestic violence or threats. That restraining order would take precedence over the previous custody order. In all likelihood, the judge would order an alternate method of pick up and drop off, perhaps having it take place at a neutral location with other people present, or even at a local police station. The process to file a TRO begins the moment the victim reports any incidence of violence. Temporary restraining orders become effective as soon as they are served to the person who is being restrained by the order. Local police are responsible for serving the temporary restraining order to the alleged abuser. The temporary order will remain in effect until the Order to Show Cause hearing, in which the court will review the facts in terms of the need for the order, and determine if there is a need for a long term restraining order. They will also determine how long the long term restraining order should last. It is common for a TRO to have a set expiration date; otherwise, it will usually last until the court hearing. Some states place a limit on how long a restraining order can last, but do allow the court to issue a longer order depending on the circumstances. An example of this would be how in Texas, a domestic violence restraining order can only last for two years. However, the court can issue an order for longer if the abuser caused bodily injury, or committed a felony against the victim or another member of the family or household. Additionally, either party can ask the court for a hearing to modify, extend, or remove a restraining order. Free Initial Consultation with LawyerIt’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
Ascent Law LLC
8833 S. Redwood Road, Suite C West Jordan, Utah 84088 United States Telephone: (801) 676-5506
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What is Eminent Domain? The Government Can Force You To Sell Your Home Divorce Lawyer and Family Law Attorneys Ascent Law St. George Utah OfficeAscent Law Ogden Utah Officevia Ascent Law, LLC https://www.ascentlawfirm.com/what-is-a-temporary-restraining-order-tro/ Destructive Device (DD) – Explosive Ordnance: A destructive device can be one of three things: an explosive, incendiary, or poison gas weapon. This can include bombs, mines, grenades, missiles, rockets and other similar devices. The parts used to build these devices are also included under Title II. None of the states in the Union permit ownership of an explosive ordnance. Examples: Claymore mine, hand grenade, improvised explosive device (IED) Examples: 20mm rifle, flare launcher with anti-personnel ammunition, Street Sweeper shotgun Machine Guns: According to the NFA, a machine gun is defined as “any weapon which shoots, is designed to shoot or can be readily restored to shoot, automatically more than one shot without manual reloading, by a single function of the trigger.” This definition includes any frame, receiver, or parts to make a machine gun. The State of Iowa does not allow machine guns. Examples: AK-47 rifle, M16 rifle, M4A1 rifle Short-Barrelled Rifles (SBR): A rifle is a shouldered firearm that has spiral grooves inside the gun barrel and can fire one bullet at a time. A short-barrelled rifle has a barrel of less than 16 inches or overall length of less than 26 inches, as defined by the NFA. This also includes any weapon made from a rifle that is of the same dimensions. The stock must be extended on folding stock rifles when measuring the length. Pistols with shoulder stocks may be considered a short-barrelled rifle if they meet other requirements. Check with experts like those at Wendl’s Weapons if you are unsure about your firearm. Examples: semiautomatic Glock pistol with shoulder stock, Wilson Combat SBR Tactical rifle, sawed-off rifles Short-Barrelled Shotguns (SBS): An SBS is any shotgun having a barrel less than 18 inches long, or any weapon made from a shotgun that is less than 26 inches long. A shotgun is a shoulder-fired, smooth bore firearm. Examples: H&K Fabarm FP6, Seraphim Armoury 9″ SBS, customized “sawed off” shotguns Silencers: A silencer or suppressor is any device that is used to muffle or diminish the sound of the gunshot of a portable firearm. This also includes any parts used to build a silencer or suppressor. Examples: Gemtech MIST25, AAC Element 4, YHM Sidewinder Any Other Weapon (AOW): This is a miscellaneous weapons category. According to the NFA, an AOW is ” any weapon or device capable of being concealed on a person from which a shot can be discharged through the energy of an explosive.” Examples: a cane gun, a pen gun, pistol with a forward grip Penalties for Violating the NFATrying to get around the NFA isn’t recommended, as the penalties are severe. A conviction results in a felony on your record and is punishable by up to ten years in prison and/or a $10,000 fine. Even first offenders will probably see jail time. In addition, any weapon that is in violation of the NFA is subject to civil forfeiture. Using a machine gun or silencer while committing a violent crime or drug crime can add thirty years to your sentence, even if the NFA is not violated. National Firearms ActThe NFA was originally enacted in 1934. Similar to the current NFA, the original Act imposed a tax on the making and transfer of firearms defined by the Act, as well as a special (occupational) tax on persons and entities engaged in the business of importing, manufacturing, and dealing in NFA firearms. The law also required the registration of all NFA firearms with the Secretary of the Treasury. Firearms subject to the 1934 Act included shotguns and rifles having barrels less than 18 inches in length, certain firearms described as “any other weapons,” machineguns, and firearm mufflers and silencers. While the NFA was enacted by Congress as an exercise of its authority to tax, the NFA had an underlying purpose unrelated to revenue collection. As the legislative history of the law discloses, its underlying purpose was to curtail, if not prohibit, transactions in NFA firearms. Congress found these firearms to pose a significant crime problem because of their frequent use in crime, particularly the gangland crimes of that era such as the St. Valentine’s Day Massacre. The $200 making and transfer taxes on most NFA firearms were considered quite severe and adequate to carry out Congress’ purpose to discourage or eliminate transactions in these firearms. The $200 tax has not changed since 1934. As structured in 1934, the NFA imposed a duty on persons transferring NFA firearms, as well as mere possessors of unregistered firearms, to register them with the Secretary of the Treasury. If the possessor of an unregistered firearm applied to register the firearm as required by the NFA, the Treasury Department could supply information to State authorities about the registrant’s possession of the firearm. State authorities could then use the information to prosecute the person whose possession violated State laws. For these reasons, the Supreme Court in 1968 held in the Haynes case that a person prosecuted for possessing an unregistered NFA firearm had a valid defense to the prosecution — the registration requirement imposed on the possessor of an unregistered firearm violated the possessor’s privilege from self-incrimination under the Fifth Amendment of the U.S. Constitution. The Haynes decision made the 1934 Act virtually unenforceable. Title II of the Gun Control Act (GCA) of 1968Title II amended the NFA to cure the constitutional flaw pointed out in Haynes. First, the requirement for possessors of unregistered firearms to register was removed. Indeed, under the amended law, there is no mechanism for a possessor to register an unregistered NFA firearm already possessed by the person. Second, a provision was added to the law prohibiting the use of any information from an NFA application or registration as evidence against the person in a criminal proceeding with respect to a violation of law occurring prior to or concurrently with the filing of the application or registration. In 1971, the Supreme Court re-examined the NFA in the Freed case and found that the 1968 amendments cured the constitutional defect in the original NFA. Title II also amended the NFA definitions of “firearm” by adding “destructive devices” and expanding the definition of “machinegun.” Free Initial Consultation with LawyerIt’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
Ascent Law LLC
8833 S. Redwood Road, Suite C West Jordan, Utah 84088 United States Telephone: (801) 676-5506
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What Is In A Valid Estate Plan? What Is Eminent Domain? The Government Can Force You To Sell Your Home Divorce Lawyer and Family Law Attorneys Ascent Law St. George Utah OfficeAscent Law Ogden Utah Officevia Ascent Law, LLC https://www.ascentlawfirm.com/what-is-a-title-2-firearm/ If you are selling your home without a real estate agent, you may end up need a For Sale By Owner (FSBO) purchase agreement. However, many FSBO sellers are not familiar with this document. It is normal to find yourself asking: what is a FSBO agreement? This is a way to list your home without the help of an agent or brokerage. People will do this if they are hesitant to pay a real estate agent’s commission. However, the benefits of having a real estate agent outweigh the cost of not having one. You may review the specifics of FSBO agreements right here. Go over what must be included in a FSBO agreement. Find out if this document is legally binding and learn more about your options for completing a FSBO agreement to sell your property. FSBO Purchase AgreementAnytime you sell a property, there must be a purchase agreement. If you work with a realtor, they may draw up this purchase agreement for you. However, if you sell your property on your own, you must provide the document. This document is considered your FSBO purchase agreement. If you’re asking what a FSBO Agreement is, you should know that it is considered a legal document. It will need to include information to protect your legal rights. Note that if your FSBO agreement is not written carefully, the sale of your property could fall through. You could also end up losing money on the sale. Many property owners don’t know where to start when it comes to designing a FSBO agreement. Your state may actually have specific requirements for writing up a FSBO agreement. Utah, for example, has an entire division dedicated to real estate contracts and forms, called the Division of Real Estate Contracts and Forms. Many title companies provide different templates designed to meet the needs of different states around the nation. It is important that you use the correct template when designing an FSBO agreement. Failure to include the correct information in your contract may prevent you from closing the sale to your property. Note that, sometimes, the escrow company may provide you with a contract template as well. Information to Include in Your FSBO AgreementIn order to draw up a FSBO agreement, you will need to include a lot of specific information. This includes: You should also include your full name and the full name of the buyer(s). After you use these names once, you may simply use the terms Buyer and Seller. Ensure that you give the agreement a title (“Real Estate Contract” is often acceptable) and that you date the contract. An FSBO agreement may also need to include information about the property to be sold, including: Including all of this information may make a FSBO agreement quite lengthy. Depending upon the nature of your property the contract may become very complicated. However, it is important that you ensure the contract is completed carefully, as the sale of your property may not go through if there are issues with your FSBO agreement. Your FSBO Agreement May Be Legally BindingNote that, in most cases, a FSBO agreement will be considered legally binding once both the buyer and the seller sign the document. This applies even though most FSBO agreements are not notarized. Once you sign a FSBO agreement, it may be more difficult to back out of the contract. Ensure that you consider the document carefully before you sign anything. Sellers, especially, may face legal penalties if they take steps to back out of a FSBO agreement once they have signed and completed the document. Advantages and Disadvantages of Homes For Sale By OwnerSelling your home involves a lot of homework. Make sure your home is priced right for the market. Research the recent sales and home prices in your area. Overpricing a property can make it languish unsold for months or even years, undermining any leverage you as a seller may have later in negotiating. It’s easy to become subjective about the value of your home, especially if you’ve lived there awhile and made upgrades to it. You have to put aside your pride, avoid setting an unrealistic price and be willing to lower it if necessary. It can be a worthwhile investment to spend a few hundred dollars to have your home professionally appraised. Visit open houses in the area to get a general idea of going prices. Ask the listing agent how long the house has been on the market and if there have been any price reductions. Make full use of the Internet as a research tool. Make sure everything in your home is in working order. If you somehow miss a problem before the contract is signed, it’s a pretty safe bet that the professional inspector will catch it and you’ll be forced to fix it anyway before the closing. Don’t ignore cosmetics. Make your home attractive to buyers. It should be clean and clutter-free, with fresh paint and clean carpets — the perfect opportunity for that fix-up project you’ve been putting off! Help buyers envision themselves living there. Know the rules. Research state laws and regulations governing fair housing, lead paint disclosure and other requirements, so that you’re in full compliance. Also bone up on the rules governing offer-and-acceptance (your sale negotiations with a buyer) and sales contracts. The last thing you want is to risk a future lawsuit for not disclosing some defect on your property. Go to a library or bookstore to get familiar with these procedures. Know about financing. Ask the buyer if they have been pre-approved for a home loan. This is especially important in the current credit crunch. You should get an earnest money deposit to ensure they are serious about purchasing your house. Financing can fall through at the last minute, so be prepared for that possibility. If you’re selling a condominium, townhome or co-op, it is the buyer’s right to be informed about the association and its financial health. This includes information about the bylaws and reserves (how much money the association has in the bank to fund needed repairs and improvements to the property). It’s your duty as the seller to disclose these facts. Hire a lawyer to draw up a sales contract and represent you at closing. If you were happy with the attorney who assisted you as a buyer, consider him or her. Otherwise, get recommendations from family or friends. Be aware of the tax implications. Your attorney should be able to advise you on whether or not you will owe capital-gains taxes on the sale. Reasons FSBO Home Sellers FailSelling a house is not as easy as selling a car. It’s an extensive process that demands a lot of knowledge, patience and time. First, you have to familiarize yourself with all the relevant legalities that go into preparing the contract for the sale of your house. This is crucial for home sellers without an agent. You will have to hire a real estate attorney for that or else you could get yourself into legal trouble quickly. If you choose to list your home FSBO, you should consult a real estate attorney before listing your house for sale. If you are listing your home on your own, you are effectively the agent of your own house. Make sure to be sure to become a good one. There are plenty of acronyms and other terms to be aware of in the real estate industry. Not Knowing the Value of Your PropertyPeople who list their home on their own often make a huge mistake before they even get to show their home to potential buyers. Everyone is emotionally attached to their home. This makes it harder to objectively price the property and understand its value from the buyer’s point of view. Buyers will point out problems in your home that you don’t even consider noteworthy. And they will negotiate for a lower price. Pricing the house accurately is crucial. When an agent helps you price a house, they do it with a wealth of experience backing their numbers. They’ll account for the state of the real estate market and a variety of factors that will influence the value of your home and the time it takes to sell. If you are doing it yourself, you must research the current housing market trends. It helps to find the median price of a property in your neighborhood and prepare a realistic estimate of the necessary repairs. This is something you will have to reevaluate after every potential client’s visit. It is also important to stay objective and not get emotional when buyers seem to undervalue your beloved home. Know that in most cases, properties sold through a realtor sell for a much higher price than the ones sold by the owners. FSBO owners typically sell their home for less than 94% of the price they would have sold with a real estate agent, so the safer option is to hire a realtor to help you sell. Bad Marketing and Open HousesEven though the FSBO sites are a great way to place your house in a listing, most buyers stray away from these listings. A great way to advertise your home is through hosting open houses through your social media accounts. Even still, this may not attract any people to view your home besides your friends and family. The competition for ads is fierce, and you don’t want to burn a hole in your wallet. If you list your house on your own, you should always be ready to show your house. It would drastically shrink the list of potential home buyers if you are only available to show your house on weekends or after working hours. Because you already have a smaller list of potential buyers because of your FSBO listing, you can’t afford to miss any showings for potential buyers. When you consider listing your house as FSBO, you will have to be positive, enthusiastic and energetic when you show your house to strangers. It is typical that viewers will complain about the worn staircases, creaky doors, and other quirks about your house they find undesirable. If you work all day and have to do showings right after, you have to ask yourself, can you handle that after a hard day of work? For most people, it’s better to let a realtor field buyer’s complaints and market your home so that you can sleep easy and keep your free time free. Not Knowing how to NegotiateThe most tricky and most important part of selling a home is undoubtedly the final negotiations. Negotiating is a skill that many people feel they are intuitively good at. However, a lot of people overestimate their ability to facilitate a good negotiation- especially when negotiating terms they’ve never handled before. Negotiating is a skill that takes practice. Negotiating terms for a real estate sale takes even more. There are so many variables to take into account, and a skilled agent would be a pro. Consider the following if you’re thinking about listing your home as FSBO: These final negotiations are the hardest part of closing the deal without an agent. Many properties for sale by owners tend to sit for months because the owners are unable to close deals. Or they can end up selling the house at far too low a price because of inexperience in negotiating. Why Sell Without an Agent?The benefits of selling without an agent are endless, but there are a few positives worth highlighting. Our customers repeatedly tell us 3 things they love about selling real estate without an agent: Free Initial Consultation with LawyerIt’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
Ascent Law LLC
8833 S. Redwood Road, Suite C West Jordan, Utah 84088 United States Telephone: (801) 676-5506
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What Is Real Estate Tax Sales Redemption? What Is In A Valid Estate Plan? What Is Eminent Domain? The Government Can Force You To Sell Your Home Divorce Lawyer and Family Law Attorneys Ascent Law St. George Utah OfficeAscent Law Ogden Utah Officevia Ascent Law, LLC https://www.ascentlawfirm.com/what-is-fsbo/ Eminent domain refers to the power of the government to take private land for public use under certain circumstances. For example, the government may sometimes take someone’s house to make room for a new highway or a bridge. Eminent Domain and Federal LawThe law of eminent domain originates in the “Takings Clause” of the Fifth Amendment to the United States Constitution. The U.S. Supreme Court helps decide major cases regarding eminent domain. The framers of the Constitution were generally wealthy landowners who wanted certain guarantees against tyranny. However, they understood that sometimes land would have to be taken for the public good. The Takings Clause states that “private property [should not] be taken for public use without just compensation.” This only applies to private property and must be used for the public good. Just CompensationThe Constitution requires that private landowners who lose their home or land due to the use of eminent domain be paid “just” compensation. But what exactly does that mean? Generally, this is based on how much the landowner might expect to get in fair market value. The value of the land could be determined by many factors, including its size and any resources it may have. Sometimes, the federal or local government takes land for limited periods, which tends to make valuation much more difficult. If the police can prove “by a preponderance of the evidence” that the property was being used for criminal activity, then the government generally may seize the property without compensation. Eminent Domain and Condemnation ProceedingsThe government follows a particular process when it takes private land for public use under eminent domain law. It begins with its broader expansion or public improvement plan. Once planners determine which private land may be affected by these plans, they work with their own appraisers to come up with an appropriate valuation. If the private property owner accepts the offer from the government, the transaction is fairly straightforward. But if the parties are unable to agree on a price, the dispute will get resolved in condemnation proceedings. If the matter goes into condemnation, the property owner (typically with the help of an attorney and an appraiser) will offer their own property valuation. One option for property owners is to dispute the forced sale by challenging the government’s proposed use of the land, but these challenges typically fail as long as the use is determined to be “proper” and for the public good. Another option is to suggest that the claim is too broad, which in some limited cases, may reduce the scope of the purchase. But the value of the property is generally the main issue when eminent domain cases go into condemnation proceedings. Public UseSince invoking eminent domain requires that the taken property be used for public use, it’s important to understand what that means from a legal perspective. The term “public use” is not limited to the actual, direct use by the public as would be the case for parks or roads but refers to any use that generally gives a benefit to the public. For instance, a parcel of land with an abandoned factory may be obtained and cleared of all structures through eminent domain. Even if the end result is an empty lot, and not everyone “uses” the land, it could be argued that this benefits the community as a whole because of the aesthetic improvement from its removal. What Property May be Taken Through Eminent Domain?An eminent domain action typically is applied to real property (real estate, including buildings and land), but any kind of property may be taken if done within the legal confines of the law (based on the Fifth Amendment’s Takings Clause). This includes both tangible and intangible property, such as franchises and contracts. Property That’s Deemed a RiskOften, governmental units — particularly at the local level — begin condemnation proceedings for private property that isn’t needed for public use, but rather has been deemed a risk to the public health or safety. This, in fact, is the more appropriate use of the term “condemnation,” although the authority or power invoked to condemn the property is that of eminent domain. For example, the government may decided to condemn and then seize the property of an old shipyard in order to clean up asbestos and other environment pollutants. Any private property may be taken if it’s proximity to the clean-up area is deemed unsafe. In this regard, the seizure is done in the best interests of the public even if the land ultimately is never used by the public. “Dedication” of LandA “dedication” of land is a similar form of appropriation of private land (or an easement therein) for public use. But instead of going through the adverse process of condemnation, the transfer of property is affected voluntarily by the landowner. A dedication may be express or implied through the landowner’s conduct and the facts and circumstances related to the property. For instance, someone who owns a parcel of property that includes access to a historical site may dedicate this portion of the property to the government. Notwithstanding, a dedication also may arise following an adverse (to the interests and/or use of the landowner) and exclusive use by members of the public under a claim of right. Such claim, by an adverse public user, is similar to a common law “adverse possession” claim between private parties and is predicated upon the knowledge of and allowance by the owner. Many states provide for both common-law and statutory dedications. Exceptions for Certain PropertyNot all property may be taken for any purpose. Many states prohibit the exercise of eminent domain for property currently being used as: A landowner can’t convert the use of property to one of these uses in order to avoid condemnation once eminent domain proceedings have begun (i.e. filing of a notice of intent). It can be confusing trying to wrap your head around exactly what types of property may be taken in an eminent domain action. Courts won’t allow takings if they’re not for the good of the public or if the landowner isn’t compensated fairly. If you believe your property is being unjustly taken, learn more about your options by meeting with an experienced eminent domain attorney near you. Challenging Eminent DomainAn aggrieved party who objects to a government taking must have an opportunity to receive fair notice (a reasonable time to obtain legal advice and prepare a formal objection). Additionally, there must be opportunity for a fair hearing before the award (monetary compensation) becomes final. The hearing provides a forum to determine whether or not there had been an actual taking as defined by law; whether the taking was for a public use; and/or whether just compensation had been made. If the government is unable to justify its taking and fails to offer just compensation to the property owner, the taking won’t be allowed by law (as rooted in the Fifth Amendment’s Takings Clause); but challenging eminent domain is no easy task. The following information will help you understand the process of challenging an eminent domain taking. Notice of Eminent DomainNo matter how well the government is able to justify the taking of private property, it can’t just take it unannounced. Prior to any governmental action to exercise its right of eminent domain, the government must negotiate in good faith with the landowner for an acceptable price for the land. Initially, most governments notify landowners of prospective action by serving a notice of intent. The contents generally describe the parameters of the property in question, the proposed use, and an offer (in dollars) of purchase. Extensive mediation and offers/counteroffers usually precede court action. A formal condemnation action only follows if an agreement can’t be reached. Hearings and Determining the Necessity of a TakingNot all condemnation proceedings are the same. State laws differ on the number of hearings and the procedural structure of each, depending on the type of property in question or the intended use. Generally, a landowner may contest both the proposed taking and the amount of compensation offered. Ultimately, if administrative appeals fail, the landowner may petition in court, typically claiming a violation of constitutional rights. Both sides may offer witness testimony and other evidence in support of their positions. Both sides may call attention to the fair market value (by expert testimony) of similar properties for comparison. Following court decision, appeals may take years, but generally does not stay the taking; if a landowner ultimately prevails on appeal, only money damages are generally available. Challenging Eminent Domain: Remedies for TakingsInitially, an objecting landowner may request either or both injunctive and monetary relief. However, if the government’s action meets the legislative and constitutional criteria, the landowner may be responsible for court costs if the objection was not well-grounded or appears to have been motivated by excessive financial interest. In cases of excessive takings (in which the landowner or landowners claim the government is taking more than it needs) or partial takings (easements), adjudication includes a determination of the percentage interest in a property which is adversely affected, and monetary award is prorated accordingly. Likewise, if the complaint is for devalued property which isn’t directly taken, but adversely affected because of governmental activity on nearby property, adjudication includes a determination as to whether other factors have devalued the property. In these cases, courts will determine the monetary difference between the devalued property and its fair market value without the alleged adverse effect. Compensation is required, effective from the date of the alleged taking. Payments not made at that time accrue interest, to which the landowner is entitled. Occasionally, subsequent actions or objections are filed years after the initial determination. This is especially true in the case of partial takings. Over time, a government entity may engage in additional activity that exceeds in scope of the initial taking. If this causes further decrease in residual use or enjoyment still vested in the original property owner, both injunctive and monetary relief may be available. Even if you have a very good reason for opposing a government agency’s proposed taking of your property through eminent domain, making the case on your own may be extremely difficult. Don’t fight an uphill battle; get professional help from an experienced, local eminent domain attorney today. How the Government Takes PropertyAs cities and towns expand and undertake improvements to roadways, sewer and power lines, communications, and other systems, the government must often secure or acquire access to private land. Without the government’s power to do so, the size and capabilities of our public infrastructure would become inadequate to serve the needs of society. The right of the government to obtain private land for public purposes is known as eminent domain, and this right derives from federal and state constitutions and related laws. The power of eminent domain allows the government to take private land for public purposes only if the government provides fair compensation to the property owner. The process through which the government acquires private property for public benefit is known as condemnation. As the government makes its plans for expansion and improvement of publicly maintained roads and utilities, it determines which private parcels will be affected. Once it makes that determination, the government will work with its own appraisers to determine the appropriate price for the necessary property interests. When the government has established its estimation of the property value, it may offer the landowner a particular price for the property. If the property owner agrees, the government buys the land. If the property owner disputes the government’s valuation and they cannot agree on a price, the matter will go to condemnation proceedings. During condemnation proceedings, the property owner will get to offer his or her own valuation for the property. Typically, the property owner will work with an attorney and an appraiser. The attorney will protect the property owner’s legal rights respecting the involved property, and the appraiser will work to establish the property’s fair market value. The property owner may also oppose a forced sale by contesting the government’s proposed use of the property. As long as the use is proper, however, this type of challenge will fail. As an alternative, the landowner may also claim that the extent of the property the government is attempting to condemn is too great and that its purposes can be fulfilled with less intrusion. Generally speaking, the government is only allowed to invade the property rights of individuals to the extent necessary to accomplish the intended public purpose. Free Initial Consultation with LawyerIt’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
Ascent Law LLC
8833 S. Redwood Road, Suite C West Jordan, Utah 84088 United States Telephone: (801) 676-5506
Ascent Law LLC
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What Is The Average Attorney Fee For Foreclosure? What Is Real Estate Tax Sales Redemption? What Is In A Valid Estate Plan? Divorce Lawyer and Family Law Attorneys Ascent Law St. George Utah OfficeAscent Law Ogden Utah Officevia Ascent Law, LLC https://www.ascentlawfirm.com/what-is-eminent-domain-the-government-can-force-you-to-sell-your-home/ If you’ve got people in your life who you love and want to take care of, it’s wise to build an estate plan. This plan, which you can put together with the help of an estate planning specialist, will make sure loved ones are taken care of in the event of your death. An estate plan is more than just drawing up a will. It also involves formalizing how you want to be looked after (medically and financially) if something happens to you, or if you’re unable to make your own decisions later in life. Your estate plan will also clarify how you want your assets to be protected during your lifetime and distributed after your death. state planning entails the preparation of will or codicil, setting up trusts, bequeathing gifts to persons or entities and/or granting authority to do certain acts by way of power of attorney. This discuss will explain the various forms of estate planning and highlight its benefits. Reasons to Create Your PlanVery few people wake up in the morning and wish they could spend the day working with their attorney to create an ‘estate plan.’ However, creating (or updating) a plan is among the most important things you can do. When you do, you can: By planning, you also make things easier for your family. If something happens to you, it will already be a very difficult time for your family and other loved ones. How wonderful it will be if they know exactly what you want to have happen and have the means at hand to follow your wishes. Consider the planning you do now to be your final future gift to your loved ones. While estate planning can entail some difficult choices and means confronting uncomfortable issues, it does provide a sense of relief and peace of mind when it is done. You’ll know that you have done your best to plan and provide for yourself and for loved ones, as well as for the causes you’ve cared about during your lifetime. There is great satisfaction in knowing what your legacy on earth will be. WillA valid will is generally type written, dated, and signed by you as well as two legally competent witnesses. States differ as to the exact requirements for a valid will and whether a handwritten will, with or without witnesses, are valid. The probate court oversees administration of a valid will at death to carry out your instructions. The court charges probate fees to administer an estate and the documents and proceedings are public record. Revocable Living TrustBeneficiary DesignationsYour will or living trust does not control distribution of assets such as your IRA, commercial annuities, and some other assets at death. Your IRA or annuity administrator will distribute these types of assets according to a beneficiary designation form on file with their office. These are the forms you fill out when you establish IRAs or other types of retirement plans, or purchase a commercial annuity or life insurance policy. This form directs the administrator as to who will receive whatever remains upon your passing. You can also request a beneficiary designation for a bank or investment account. Since your will and living trust do not apply to these important assets, these beneficiary designations can have a profound impact on how your overall estate is distributed and should be part of any coordinated plan. Power of Attorney (POA) for Financial MattersThis document grants to someone you trust the ability to act on your behalf for a variety of potential transactions and responsibilities. You decide when the POA will become effective and the extent of the authority granted. A POA is only effective during your lifetime and automatically terminates at your death. Health Care Power of Attorney (HCPOA) for health care decisionsThis document appoints someone to make decisions for you regarding medical treatment if you are not able to make these decisions for yourself. It allows you to specify who is in charge of making critical treatment decisions and, perhaps more importantly, who does not have that authority. Physician’s Order for Life Sustaining Treatment (POLST).This document describes what health care treatment you want in case of an emergency. You work with your doctor to document your wishes regarding resuscitation and other life sustaining procedures. Managing and Distributing Your WealthYou might conceive of the estate planning process as constructing a pyramid from the ground up. Primarily, you want to do what you can to ensure your own well-being. In so doing, keep in mind that it’s not selfish to look out for yourself! Only by meeting your own needs now and in the future are you able to build the next level of the pyramid. If you’re fortunate enough to accomplish some important basics, you’re then in a position to provide for family members and other loved ones. Thereafter, if you have the desire and the means, it becomes appropriate to think about a legacy you can leave for causes dear to you in addition to family and friends. The Benefits of Estate PlanningFor the management of an individual’s property in the event of incapacity For proper distribution of assetsEstate plan is very beneficial for accurate distribution of an individual’s assets. Wills, codicils, deeds of gifts and trusts enables an individual determine how their assets will be distributed to their beneficiaries after their death to prevent disputations in future. Without an estate plan, the court will determine how the assets of a deceased will be distributed. For the protection of beneficiariesAn estate plan invariably protects the interest of beneficiaries by ensuring that their shares are properly specified and preserved. If an individual has a child who is a minor, the individual can designate guardians and trustees who will oversee the financial and other needs of the minor. On the other hand, if the individual’s children are adults, but are unable to manage finances or assets, the individual can create a trust to protect the children from making bad decisions. For a speedy and efficient transfer of an individual’s assetsThe deed of gift and trusts are very speedy and cost effective ways to transfer one’s assets to a beneficiary. Without proper estate plan, the process of transfer of assets may be extremely cumbersome. Estate planning helps an individual to identify cost effective and peaceful way to transfer their asset to their beneficiaries either during their lifetime or after their death. To minimize cost and avoid disputesAn estate plan will specify how an individual’s assets will be managed and distributed to beneficiaries thereby leaving no room for speculations and confusion. Hence this will prevent disputations and invariably save time and money. To minimize estate taxesThe significant loss of a part of one’s estate to the payment of taxes is a factor that should motivate people to establish an estate plan. Through strategic planning, people can substantially reduce or eliminate taxes by setting up trusts as part of their will, living trusts or bequeathing gifts to their beneficiaries during their lifetime. In conclusion, it is important to note that not every form of estate plan is suitable for everyone. Each form of estate planning has its distinct and unique features and people’s. If an individual desires a speedy and cost effective process of property transfer, it’s important to consider the various forms of estate plan that will help the individual achieve their desired purpose. For example, executing a deed of gift or setting up trusts depending on the individual’s preference can be preferred to making a will because of the lengthy process of obtaining probate. Choosing the appropriate estate plan can ensure simple, tax efficient and organized transfer of assets to beneficiaries, it removes uncertainties and prevents disputes. Factors To Consider In Estate And Financial PlanningMany individuals delay estate planning in Tracy because it involves end-of-life issues. However, regardless of your age or health, it’s always in your family’s best interests to consult an estate planning lawyer sooner, rather than later. Unexpected tragedies occur all too often; by dealing with these matters promptly, you can ensure that your family’s financial future is protected in the event of your passing. When you meet with an attorney to address matters such as your last will and testament, you’ll need to consider the following factors. Evaluate Your Financial SituationAfter scheduling a meeting with an estate planning lawyer, it’s time to gather together important financial documents. Review all of your financial information to determine the total value of your assets, and your current and anticipated cash flow. Compare your cash flow and assets to your total liabilities to determine your net worth. Consider other factors that may affect your finances in the future, such as the rising cost of living, your retirement or your spouse’s retirement, and unexpected, yet significant expenses, such as those related to a major illness. By understanding your particular financial situation, your estate planning lawyer can help you develop a sound financial plan for the future and for your heirs. Consider Your Beneficiaries’ NeedsWhen you create a will with the help of your estate planning attorney, you’ll designate beneficiaries for your assets. You’ll also designate beneficiaries for your life insurance policy, retirement accounts, and similar accounts. It’s entirely your decision as to how to divide your estate among your family members, friends, or charitable organizations. However, when designating beneficiaries, you should consider their future needs and their spending habits. Many individuals earmark funds in a trust to cover specific expenditures, such as college tuition or special needs expenses. Reduce Your Taxable EstateEstate and income taxes can take a significant portion of the assets you allot to your beneficiaries. Your estate planning lawyer can help you develop efficient strategies to minimize tax obligations. You might also consider purchasing a life insurance policy that will cover the estate tax your heirs will owe. Create An Inventory Of What You Own And What You OweCompile a comprehensive list of your assets and debts, including account numbers and contact information, as well as names and contact information for your important advisers. Keep the summary in a secure, central location – along with original copies of important documents and provide a copy of the summary for the executor of your will. This list could be a piece of paper or also a digital file kept in a secure location. Develop A Contingency PlanAn estate plan allows you to control what would happen to your property and assets if you or your spouse passed away today. It also puts a documented plan in place so that if you became incapacitated, your family could carry on your affairs without having to go through court. This includes a strategy for providing income if you were to become disabled and covering potential expenses for care giving that may be needed at some point. Provide For Children And DependentsA primary goal for many estate plans is to protect and provide for loved ones and their future needs. Your estate plan should include provisions for any children, including naming a guardian for children under age 18 and providing for those from a previous marriage if you remarry, your assets may not automatically pass to them. It also would specifically address the care and income of children or relatives with special needs that must be planned carefully to avoid jeopardizing eligibility for government benefits. Protect Your AssetsA key component of estate planning involves protecting your assets for heirs and your charitable legacy by minimizing expenses, and covering estate taxes while still meeting your goals. If necessary, your estate plan would include specific strategies for transferring or disposing of unique assets like a family-owned business, real estate or investment property, or stock in a closely held business. Many people use permanent life insurance and trusts to protect assets while ensuring future goals can be met. Document Your WishesIf you want your assets distributed in a certain way to meet financial or personal goals, you need to have legal documentation to ensure those wishes are followed if you die or become incapacitated. This includes designating beneficiaries for your life insurance policies, retirement accounts and other assets that are in line with your goals. It also means ensuring that titles of material assets, such as automobiles and property, are named properly. Work with an attorney to be sure you have an updated will disposing of your assets, a living will reflecting your end-of-life wishes, as well as powers of attorney for health-care and financial matters. Appoint FiduciariesTo execute your estate plan, you must designate someone to act on your behalf if you are unable to do so as executor of your will, trustee for your assets, legal guardian for your dependents and/or personal representative or power of attorney if you became incapacitated. You need to be sure your fiduciaries are aware of and agree to their appointments, and that they know where to find your original estate planning documents. Fiduciaries can be family members, personal friends or hired professionals such as bankers, attorneys or corporate trustees. Whether you are just starting out or have accumulated wealth over a lifetime, an up-to-date estate plan helps you minimize the impact of unexpected events on you and your family by preserving, protecting and managing your assets. A financial advisor can help you create a financial security plan to meet your goals, and provide tools and resources to build an estate plan that makes an impact well into the future. Free Initial Consultation with LawyerIt’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
Ascent Law LLC
8833 S. Redwood Road, Suite C West Jordan, Utah 84088 United States Telephone: (801) 676-5506
Ascent Law LLC
The post What Is In A Valid Estate Plan? first appeared on Ascent Law, LLC.
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What Is The Difference Between IPO And Private Placements What Is The Average Attorney Fee For Foreclosure? What Is Real Estate Tax Sales Redemption? Divorce Lawyer and Family Law Attorneys Ascent Law St. George Utah OfficeAscent Law Ogden Utah Officevia Ascent Law, LLC https://www.ascentlawfirm.com/what-is-in-a-valid-estate-plan/ Each state has different laws for tax sales. Generally, the taxing authority, usually the county, doesn’t have to go to court before holding a tax sale. Instead, the process is often started when the taxing authority files a list of delinquent taxes, which includes information about the taxpayer, the property, and the amount due, with the recorder’s office and publishes a copy in the newspaper. Also, the homeowner typically is entitled to some form of notice of the pending tax sale. Then, in some places, the county holds a public auction. Commonly, bidding begins at the amount that covers the delinquent taxes, interest, and related penalties that are owed to the taxing authority. The winning bidder at the sale normally receives either a: In some jurisdictions, though, a sale isn’t held. The taxing authority simply executes its lien by taking title to the home. In other places, the taxing authority must foreclose the property, usually by filing a lawsuit in court, before holding a tax sale. Tax Deed SalesIn tax deed sales, the taxing authority sells the title to the home. A tax lien certificate sale, on the other hand, doesn’t convey ownership of the property. Rather, the taxing authority sells its lien and the purchaser usually receives a tax lien certificate. This certificate entitles the purchaser to basically take over the position of the taxing authority and collect full payment of the past-due taxes, plus interest, from the delinquent taxpayer. If the delinquent taxes aren’t paid by a certain date, the purchaser of the lien generally has a right to foreclose the lien, or take specific steps to convert the certificate to a deed, and get title to the home. Redeeming The PropertyMost jurisdictions that sell tax deeds offer a right of redemption after the sale, which allows you to get your home back. To redeem, you must reimburse the purchaser the amount paid at the sale, or pay the taxes owed, plus interest within a specific time frame called a “redemption period,” which is generally between one to three years. Sometimes, the redemption period takes place before the sale. If you pay the delinquent taxes before the start of the sale, the sale will not take place. Setting Aside The SaleIf you can’t redeem the home, you might be able to set aside (invalidate) the tax sale after it has occurred by showing, for example: Saving Your Home After a Tax Lien SaleAfter a tax lien sale, you still own the home because the purchaser only buys a lien against your property. If you pay off the amount of the lien or the purchase price (depending on the situation), plus allowed costs, like interest, within a specified time period you get to keep the home. This, too, is referred to as “redeeming” the home. If you’re facing an imminent tax sale, or one has already occurred, consider talking to an experienced attorney in your state as soon as possible. A qualified foreclosure lawyer, tax lawyer, or real estate lawyer can answer your questions about how the process works where you live and the specific steps you need to take to save your home from a tax sale. If you fail to pay your property taxes or other municipal charges, like a sewer or water bill, the past-due amount becomes a lien on the home. This type of lien almost always has priority over other liens, including mortgages. If the taxes remain unpaid, in most cases, the taxing authority will eventually: In some places, however, a sale isn’t held. Instead, the taxing authority executes its lien by taking title to the home. State law then generally provides a procedure for the taxing authority to dispose of the property, usually by selling it. In other jurisdictions, the taxing authority uses a foreclosure process before holding a sale. In many states, the home can be sold for the amount of the past-due taxes. So, a $300,000 home could be sold for $1,500 of unpaid taxes. This situation is very different from a home mortgage foreclosure where the purchaser at the sale usually pays an amount close to the property’s fair market value. Ultimately, in a tax sale, the purchaser can potentially obtain title to the home for a fraction of its actual value. Generally, people who lose their home to a tax sale have two options to get the property back: redeeming it or setting aside (overturning) the sale. In most states, delinquent taxpayers get some time during which they can repurchase (“redeem”) the home after a tax sale by paying the buyer the amount paid at the sale or paying the taxes owed, plus interest, penalties, and costs. In some states, the redemption period occurs before the sale. But if you don’t redeem, the purchaser can get title to the home free and clear of any liens that existed before the sale. Usually, the homeowner gets the right to live in the home during the redemption period. Exactly how long the redemption period lasts varies from state to state; one year to three years is typical. In some states, though, the redemption period is much shorter. Check your state laws or consult with an attorney to find out the tax sale redemption period where you live. If you can, you should redeem as soon as possible to prevent additional interest and penalties from accruing. Sometimes, homeowners aren’t aware that a tax sale has been scheduled until after it’s already happened. Defects In the Tax Lien or Tax Sale ProcessDefects in the tax lien, such as omitting one of the property owners’ names, or defects in the tax sale process, like failing to give proper notice, might provide grounds to set aside a tax sale. Minor mistakes probably aren’t enough to invalidate a sale, but a defect that prejudices the homeowner’s rights probably will. For example, let’s say a property owner provides the county (the taxing authority) with a new address for mailings. But the county doesn’t send any notices about the delinquent taxes to the property owner at the new address. So, the property owner doesn’t receive notice of a tax sale. In this situation, the sale could probably be set aside for lack of proper notice. Whether a particular defect is significant enough to invalidate the sale depends on a state’s statutes and case law. The Taxes Were Paid or Aren’t OwedIf the homeowner already paid the taxes, the sale is invalid and could be set aside. Likewise, if the property is exempt from taxation, a tax sale would be void. Excusable NeglectA legitimate excuse for failing to respond to, say, a tax sale foreclosure action might justify setting aside the sale. For example, if a 74-year-old widow with a psychiatric disorder fails to do anything about the delinquent taxes until eviction proceedings start, a court would likely set aside the sale and let her keep the home if she pays the full amount of the taxes due. Redemption PeriodIf a borrower or homeowner fails to pay their mortgage or property taxes, the local tax collector or lender has the right to pursue legal action against the borrower to reclaim the money owed to them. With delinquent property taxes, this is done through a tax lien foreclosure or tax deed sale. For a delinquent mortgage, it’s done through a mortgage foreclosure. The foreclosure process varies slightly for each but will eventually result in the property being either sold at a public auction or taken back by the lender or tax lien holder through foreclosure. In both events, the real property transfers to a new owner. However, in some states, there is a redemption period after the foreclosure sheriff’s sale, which offers a right of redemption to the property owner or third party with vested interest in the property. This redemption period is the specific period of time in which the foreclosed owner or other third party with vested interest, like a mortgage holder or junior lien holder, can redeem the foreclosure sale by paying the delinquent amount plus penalties and interest. Not every state offers a redemption period. Statutory redemption, or the allowable grace period to repay the debt with interest and fees, is most commonly used in judicial foreclosure states, but the redemption grace period and whether it’s provided will depend on the type of foreclosure sale. If the home is going through foreclosure, it’s unlikely the property owner has the money to pay the debt or they would have paid it prior to the foreclosure sale. However, there are some instances when the foreclosed owner is able to pay the outstanding debt after the sale because they gained access to a new source of money. But in reality, the most common type of redemption is by third parties who carry an interest in the home. For example, a mortgagor who still has an outstanding mortgage surely doesn’t want to lose the home through a tax sale. In the event the property does go to tax sale or tax lien foreclosure, they may have the ability to repay the outstanding tax amount with interest and fees. This allows them to regain title to continue with foreclosure proceedings if need be or recoup the debt paid for taxes in some other fashion. It’s also fairly common for a junior lienor, or a mortgage lender who is in second position behind the first mortgage holder, to execute their right of redemption, but this is typically done before the sale. For example, if the borrower is delinquent on their first mortgage and the lien holder is foreclosing, the junior lien holder can pay the outstanding amount in order to keep their security position in the property. This is usually only executed when the home has equity, because the redeeming junior lienor now has room to recoup their investment in the property through a sale after redemption and completing their foreclosure. As you can see, redemption periods play a big role in distressed real estate sales. As a property owner or real estate investor, it’s important to understand how a redemption period can impact you or the potential outcome of your investment. It’s a good idea to speak with an attorney in the area who specializes in real estate foreclosure for further guidance on your local or state laws for right of redemption. Tax DeedThe term “tax deed” refers to a legal document granting ownership of a property to a government body when the owner fails to pay any associated property taxes. A tax deed gives the government agency the authority to sell the property to collect the delinquent taxes. Once sold, the property is then transferred to the purchaser. These transactions are called “tax deed sales” and are usually held at auctions. A property tax is any tax paid on a piece of property. Taxes are paid by the owners of real estate individuals or corporate entities and are assessed by the municipal government in which the property is located. The taxes collected are used to fund various municipal programs, such as water and sewer improvements, law enforcement and fire service, education, road and highway construction, public servants, and other services. Property tax rates vary by jurisdiction. When property taxes are left unpaid, the taxing authority may sell the property’s deed or title and therefore, the property to recover the outstanding taxes. The taxing authority usually a county government must go through a series of legal steps in order to acquire a tax deed. These include notifying the property owner, applying for the tax deed, posting a notice at the property, and posting a public notice of sale. The exact steps that must be taken generally vary in accordance with local and municipal laws. In a tax deed sale, the property itself is sold. The sale takes place through an auction, with a minimum bid of the amount of back taxes owed plus interest, as well as costs associated with selling the property. The highest bidder wins the property. The tax deed legally transfers ownership to the purchaser on one condition: The new owner must pay the entire amount owed within 48 to 72 hours, or the sale is canceled. Any amount bid by the winning bidder in excess of the minimum bid may or may not be remitted to the delinquent owner. This depends on the jurisdiction. The original owner may forfeit this excess amount if they do not claim it within a specified period of time. Free Initial Consultation with LawyerIt’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
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What Is The Difference Between Rule 144 And 144A? What Is The Difference Between IPO And Private Placements? What Is The Average Attorney Fee For Foreclosure? Divorce Lawyer and Family Law Attorneys Ascent Law St. George Utah OfficeAscent Law Ogden Utah Officevia Ascent Law, LLC https://www.ascentlawfirm.com/what-is-real-estate-tax-sales-redemption/ One of the considerations in deciding whether you should hire a lawyer to help you fight your foreclosure is the cost. It’s essential to understand how legal fees work to make sure that you don’t end up paying more than you can afford. Most foreclosure defense attorneys structure their fee agreements with homeowners in one of three ways: Before you pay money to a foreclosure lawyer, consider whether you should hire a foreclosure attorney in the first place. Some foreclosure defense attorneys charge an hourly rate for their services. The rate can range from around $100 per hour to several hundred dollars per hour. With this type of fee arrangement, the lawyer generally collects an initial retainer; an advance payment to the attorney before starting to work on your case of several thousand dollars. The retainer amount and hourly rate vary widely, depending on the attorney’s experience and the customary rates in the area. Say you give your foreclosure defense attorney a $2,000 retainer. She charges $200 per hour. First, she reviews all of the documents in your case. Then, she prepares and files an answer and affirmative defenses to the foreclosure action. All of this takes five hours. The attorney also spends time preparing for and attending a foreclosure mediation with you. You’ll also get billed for the time it takes to make phone calls and emails related to your case. This work, too, adds up to five hours. The retainer is now gone, and the attorney hasn’t even attended any foreclosure hearings yet. Because the attorney must do more work, you’ll have to make further payments. Pros and ConsThe benefit to this type of fee arrangement is you’ll only pay the attorney for the amount of time actually worked on your case. The downside is that while the attorney will probably be able to give you a likely range of what you’ll pay in total, you won’t get an exact price as far as what the total cost of the foreclosure defense will be—and hourly fees can add up quickly. The benefit to paying a flat fee is that you know ahead of time exactly what the total cost of your foreclosure defense will be. Whether it takes five months or two years to dismiss the foreclosure or for the lender to complete the process, you know that this is all you’ll pay. The downside is that not all foreclosure attorneys offer this option, and you’ll have to pay the fee upfront, which is difficult for many distressed homeowners. Other Lawyers Charge a Monthly RateSome foreclosure attorneys charge an upfront retainer ranging from several hundred to several thousand dollars and then a monthly fee (like $500) for each month that the foreclosure is pending. In addition, attorneys have been known to charge an extra fee on top of this amount, called a “contingent fee,” if the case is dismissed due to the firm’s efforts. Pros and ConsThe benefit of paying a monthly fee is that you know what your attorney will cost each month without variation. Also, the attorney has an incentive to keep you in the property for as long as possible (if that’s your goal). The downside is that you must pay this amount each month, even if little activity takes place in your case during that time. Foreclosure defense attorneys will also charge for costs, like mailing, travel expenses, and court costs, on top of their fee. Beware of Unreasonable Foreclosure Defense FeesWhen the financial crisis occurred, it became difficult for many people, including attorneys, to find work. As a result, many attorneys became foreclosure defense “experts” overnight marketing their services to homeowners in distress. In some cases, the fees that attorneys charge for services related to foreclosure aren’t reasonable. So you need to be careful and do your research when hiring an attorney to fight your foreclosure. Ultimately, when trying to decide if a foreclosure defense fee is reasonable, ask yourself whether the attorney is charging a fair amount considering the services provided or whether the lawyer is trying to get a windfall from your situation. One of the biggest concerns of people in need of the assistance of an attorney is how much it will cost. The type of fee arrangement that is available to a client will often have a lot to do with the type of legal issues you are bringing to your attorney. There are several common types of attorney fees and fee arrangements: What Does A Foreclosure Defense Attorney Do For You?Foreclosure cases are rarely set in stone. Hiring an experienced foreclosure defense attorney early in the case gives you the best chance of success. The last thing you want to do is battle for your home in court without knowing all your options. Here are a few immensely helpful things a foreclosure attorney can do for you. 1. Provide You With Options: A foreclosure defense attorney knows the legal landscape better than you. Their experience and judgment will save you time, help you avoid pitfalls, and maximize your chances of saving your home. Depending on your situation, your best course of action may be to avoid foreclosure via loss mitigation, modify your loan, file for Chapter 13 bankruptcy, or have your foreclosure attorney represent you in court outright. An experienced foreclosure attorney in Los Angeles can help you understand the pros and cons of each option. When to Hire a Foreclosure Attorney?Your lender usually has to wait until you’re at least 120 days late on your payment to initiate either a judicial or nonjudicial foreclosure, depending on state laws. In a judicial foreclosure, you respond to the lender’s lawsuit through the state court system. To fight a nonjudicial foreclosure, which doesn’t require the lender to secure a judge’s approval, you have to file your own lawsuit for the court’s consideration. In either process, you should usually seek out an attorney for some situations in particular, such as when: via Ascent Law, LLC https://www.ascentlawfirm.com/what-is-the-average-attorney-fee-for-foreclosure/ Public vs. Private OfferingThe most common type of public offering is an initial public offering, in which equity shares are offered to public investors for the first time. A secondary or follow-on public offering occurs when you want to sell equity shares in the public markets after you’ve completed an IPO. After a company has gone public, it is regulated by the Financial Authorities and must disclose regular financial performance to the public. When you list shares in a public offering, you are inviting shareholders to not only share in the ownership and profits of the business but you are also allowing them a vote on the future direction your company takes. In a private placement, you sell equity shares or debt instruments of your business to a select group of investors. The target investor audience for private placement deals are accredited investors, high net-worth individuals as described by the applicable regulations. The investors, who you are responsible for finding, although you could enlist the help of an intermediary, agree to buy and hold the participations (debt or equity) for a discounted price. There isn’t a lot of paperwork involved, and you do not have to register the deal with the Financial Authorities. Initial Public Offering (IPO) vs. Private PlacementPrivate companies that seek to raise capital through issuing securities have two options: offering securities to the public or through a private placement. Regulations on publicly traded securities are subject to more scrutiny than those for private placements. Each offers the necessary capital, but the criteria for issuing, ongoing financial reporting and availability to investors differs with each type of issue. An IPO is under the regulation by the Securities and Exchange Commission (SEC) and requires strict financial reporting criteria on a regular basis to remain available for trade by investors. In an IPO, the issuer obtains the assistance of an underwriting firm to help determine what type of security to issue, the best offering price, the number of shares to be issued and the time to bring it to market. Though the underwriting firms such as Goldman Sachs (GS) or Morgan Stanley (MS) that bring the issue to market hold shares to sell to their clients at the initial sales price, average investors can obtain the shares once they begin trading in the secondary market. IPOs can be a risky bet for investors, as there is no previous market activity to evaluate. This is why reading the IPO prospectus report, and gaining any knowledge about the company is crucial before investing. IPOs became friendlier to small businesses as a result of the passage of the Jumpstart Our Business Startups Act, which was created to support hiring and lessen the otherwise extensive financial reporting burden on small businesses filing for an IPO. What does Private IPO mean?Private IPO is the process of raising capital through private placements. These placements are offered only to accredited investors such as pension funds, investment banks and certain mutual funds that meet the criteria laid down by the company offering private IPO. In return for purchasing through private IPO, these entities get a certain percent of ownership in the company. This process is in contrast to public IPO, where companies sell shares to the public to raise their capital. A private IPO differs from a public IPO in the amount of regulation and scrutiny the companies are subjected to. In the case of a public IPO, they have to meet the regulations laid down by the SEC. Also, they have to adhere to strict disclosure and financing requirements, which can be cumbersome. In the case of private IPO, the regulations are greatly reduced. If companies raise capital through Regulation D, then they are exempt from the many financial reporting requirements laid down by the SEC. This reduced regulation saves companies from spending so much time and effort, and this is why many companies prefer to take this route to raise capital. However, the downside is that companies cannot raise large amounts of capital because the pool of investors is highly limited. Another downside is that marketing of these private IPOs may be much more difficult than public IPOs. This difficulty is because private placements are riskier when compared to publicly traded companies, as the latter are subject to more scrutiny than the former. Moreover, liquidity levels are low with private IPOs as the shares cannot be sold easily when the investor needs money, unlike public IPOs, where the investor can sell his/her shares on the market to get immediate cash. For these reasons, private IPO is not for everyone. Rather, it is best used when a company does not need high amounts of capital, and is not willing to go through the long and arduous reporting requirements. A company can be more selective about who buys its shares if it sells them in a private placement. Shares sold in an initial public offering, or IPO, are offered to the general public and tend to attract more attention. However, private placement allows a company to raise money without going public and having to disclose financial information. A company can remain private while still gathering shareholder investments. Private placementPrivate placement (or non-public offering) is a funding round of securities which are sold not through a public offering, but rather through a private offering, mostly to a small number of chosen investors. Generally, these investors include friends and family, accredited investors, and institutional investors. Private placement is also referred to as an unregistered offering. While an IPO requires a company to be registered with the Securities and Exchange Commission (SEC) before it sells securities, a private placement is exempt from that requirement. A private placement might take place when a company needs to raise money from investors. Yet it is different from taking money from other private investors, like venture capitalists. It’s still regulated by the Securities and Exchange Commission (SEC), but under different rules, collectively known as Regulation D. Reg D allows companies to issue securities based on the investors buying them. It distinguishes between accredited and non-accredited investors, as defined by the SEC. Any number of accredited investors can take part in private placements. Though private placements can issue securities to non-accredited investors, only 35 such investors can be included. If you’re looking to invest in a private placement as an accredited investor, you’ll need to meet some requirements, including: PIPE (Private Investment in Public Equity) deals are one type of private placement. SEDA (Standby Equity Distribution Agreement) is also a form of private placement. They are often a cheaper source of capital than a public offering. Since private placements are not offered to the general public, they are prospectus exempt. Instead, they are issued through Offering Memorandum. Private placements come with a great deal of administration and are have normally been sold through financial institutions such as investment banks. Private placement can offer investors an exclusive opportunity that isn’t available to the public. It can also offer companies funding without requiring them to register with the SEC or disclose a lot of financial information. However, all investments carry risk. Though still covered by antifraud portions of securities laws, private placements can withhold more information than investors than public offerings. Companies should know that non-accredited investors still require financial disclosures. Meanwhile, potential investors should consider gathering information beyond what’s offered before sinking their money into a private placement. Restrictions of Private PlacementsThere are some limitations of private placements, especially when it comes to what types of investors are allowed to participate. A number of rules within the SEC’s regulation D cover those restrictions. Rule 504Issuers can offer and sell up to $1 million of securities a year to as many of any type of investor as you want. They aren’t subjected to disclosure requirements. Rule 505This rule says issuers can offer and sell up to $5 million of securities a year to unlimited accredited investors and 35 non-accredited investors. If you’re selling to a non-accredited investor, you’ll need to disclose financial documents and other information. With accredited investors, the issuer can choose whether or not to disclose information to investors. But if you provide that information to accredited investors, you must also share that information with their non-accredited ones. Rule 506An unlimited amount of money can be raised if the issuer doesn’t participate in solicitation or advertising. While an unlimited amount of accredited investors can be brought in, 35 non-accredited can take part if they meet specific criteria. They need to have enough financial knowledge or have a purchaser representative present to understand and evaluate the investment. Differences Between Private Placement & Public OfferingBoth private placements and public offerings, such as initial public offerings, are ways for you to raise money to grow your business. One, the IPO, is a very public manner in which your business can expand and involve outside investors, while a private placement is less spectacular but can be equally effective in helping your company reach its potential. The approach that’s best depends on your ultimate goals and whether or not you want to open the door to a small or large number of outside shareholders. Private PlacementIn a private placement, you sell equity shares of your business to a select group of investors. The target investor audience for private placement deals are accredited investors, or those who earn at least $200,000 annually or whose net worth exceeds $1 million, according to a 2010 article on “The Wall Street Journal” website. The investors, who you are responsible for finding, although you could enlist the help of a broker, agree to buy and hold the shares for a predetermined period of time and in exchange are offered shares of the company for a discounted price. There’s not a lot of paperwork involved, and you don’t have to register the deal with the U.S. Securities and Exchange Commission. Public OfferingThe most common type of public offering is an initial public offering, in which equity shares are offered to public investors for the first time. A secondary or follow-on public offering occurs when you want to sell equity shares in the public markets after you’ve completed an IPO. After a company has gone public, it is regulated by the SEC and must disclose quarterly and annual financial performance to the public. When you list shares in a public offering, you’re inviting shareholders to not only share in the ownership and profits of the business but you’re also allowing them a vote on the future direction your company takes. AdvantagesThe federal government made IPOs more small-business friendly as a result of public policy that was passed in 2012. The rule, which is named the Jumpstart Our Business Startups Act, was formed to support hiring, and it lessens the otherwise extensive financial reporting burden on small businesses filing for an IPO. Although you may not earn as much money in a private placement compared with an IPO, the expenses associated with a private deal are less. Private placements can also be completed quicker than IPOs, and if you value your position as a private entity, you don’t have to sacrifice that privacy but can still gain access to liquidity, or cash, from the deal. DisadvantagesWhen it comes to a public offering, such as an IPO, a potential disadvantage is time. If you need to have the capital that will be raised in the deal, you’re probably not going to see any proceeds for at least six months from when you begin the public offering process. A potential drawback with a private placement is that the deal won’t get as much attention as it would in an IPO. That’s because securities laws limit the way that you can advertise a private placement, and as a result the deal may not generate as much investor interest versus a deal that is more heavily marketed. The post What Is The Difference Between IPO And Private Placements? first appeared on Ascent Law, LLC.via Ascent Law, LLC https://www.ascentlawfirm.com/what-is-the-difference-between-ipo-and-private-placements/ What is Rule 144A?Rule 144A is a safe harbor exemption from the registration requirements of Section 5 of the Securities Act for certain offers and sales of qualifying securities by certain persons other than the issuer of the securities. The exemption applies to re-sales of securities to qualified institutional buyers, who are commonly referred to as “QIBs.” QIBs must be institutions, and cannot be individuals—no matter how wealthy or sophisticated. The securities eligible for resale under Rule 144A are securities of U.S. and foreign issuers that are not listed on a U.S. securities exchange or quoted on a U.S. automated inter-dealer quotation system. Rule 144A provides that reoffers and re-sales in compliance with the rule are not “distributions” and that the reseller is therefore not an “underwriter” within the meaning of Section 2(a)(11) of the Securities Act. A reseller that is not the issuer, an underwriter, or a dealer can rely on the exemption provided by Section 4(1) of the Securities Act. Resellers that are dealers can rely on the exemption provided by Section 4(3) of the Securities Act. Rule 144A modifies the Securities and Exchange Commission (SEC) restrictions on trades of privately placed securities so that these investments can be traded among qualified institutional buyers, and with shorter holding periods—six months or a year, rather than the customary two-year period. While the Rule, introduced in 2012, has substantially increased the liquidity of the affected securities, it has also drawn concern that it may help facilitate fraudulent foreign offerings and reduce the range of securities on offer to the general public. Rule 144A is designed to provide an exemption to the general rule that all securities must be registered with the SEC before being sold. The rule specifically addresses the resale of securities among what the rule calls qualified institutional buyers, which includes most categories of institutions that qualify as accredited investors under the securities laws. Individual investors cannot be qualified institutional buyers; only institutions qualify under Rule 144A. The general intent of the rule is to allow institutions to engage in transactions the SEC would deem too risky for the general public. Institutions can make trades even though the underlying issuer hasn’t provided the full information required for SEC registration. The assumption is that large institutions are savvy enough to do their own due diligence without the SEC backing them up, in contrast to individual investors, who typically lack the resources to verify claims from issuers without the agency’s help. In addition, Rule 144A has made the markets for privately placed restricted securities more liquid than they would otherwise be. Ordinarily, a two-year holding period applies under SEC Rule 144 to institutions that buy restricted securities from issuers. By allowing trades among qualified institutions, Rule 144A allows shorter-term investment in these securities. Who may rely on Rule 144A?Any person other than an issuer may rely on Rule 144A. Issuers must find another exemption for the offer and sale of unregistered securities. Typically, they rely on Section 4(2) (often in reliance on Regulation D) or Regulation S under the Securities Act. Affiliates of the issuer may rely on Rule 144A. What types of transactions are conducted under Rule 144A?The following types of transactions often are conducted under Rule 144A: Rule 144A programAn issuer that intends to engage in multiple offerings may have a Rule 144A program. Rule 144A programs are programs established for offering securities (usually debt securities) on an ongoing or continuous basis to potential offered. They are similar to “medium-term note programs,” but they are unregistered, and the securities are offered only to QIBs. These programs often are used by financial institution and insurance company issuers to offer securities, through one or more broker-dealers, to institutional investors in continuous offerings. The Impetus for Rule 144ABefore a security can be offered to the general public, the Securities Act of 1933 stipulates that the issuer must register it with the SEC and provide extensive documentation through a filing with the agency. Rule 144A, however, was drawn up in recognition that more sophisticated institutional investors may not require the same levels of information and protection as do individuals when they buy securities. The Rule provides a mechanism for the sale of privately placed securities that do not have—and are not required to have—an SEC registration in place, creating a more efficient market for the sale of those securities. Rule 144A Holding RequirementsIn addition to not requiring that securities receive SEC registration, Rule 144A relaxed the regulations over how long a security must be held before it can be traded. Rather than the customary two-year holding period, a minimum of a six-month period applies to a reporting company, and a minimum one-year period applies to issuers not required to meet reporting requirements. These periods begin on the day the securities in question were bought and considered paid in full. What securities are eligible for exemption under Rule 144A?Securities offered under Rule 144A must not be “fungible” with, or substantially identical to, a class of securities listed on a national securities exchange (which includes the NASDAQ Market System) or quoted in an automated inter-dealer quotation system (“listed securities”). Common stock is deemed to be of the “same class” if it is of substantially similar character and the holders enjoy substantially similar rights and privileges. American Depositary Receipts (“ADRs”) are considered to be of the same class as the underlying equity security. Preferred stock is deemed to be of the same class if its terms relating to dividend rate, liquidation preference, voting rights, convertibility, call, redemption, and other similar material matters are substantially identical. Debt securities are deemed to be of the same class if the terms relating to interest rate, maturity, subordination, convertibility, call, redemption, and other material terms are substantially the same. A convertible or exchangeable security with an effective conversion premium on issuance (which means at pricing) of less than 10%, and a warrant with a term less than three years or an effective exercise premium on issuance (at pricing) of less than 10%, will be treated as the “same class” as the underlying security. 144A BondWhat is a 144A Bond Offering?144A bonds fall under “Rule 144A”. The 144A is an SEC rule issued in 1990 that modified a two-year holding period requirement on privately placed securities by permitting QIBs to trade these positions among themselves. Prior to this the holding period for such private stock was different. A 144A bond offering is a U.S. based offering, and typically is considered an alternative to the timely and costly initial public offering. What Is Rule 144?Rule 144 is a regulation enforced by the U.S. Securities and Exchange Commission that sets the conditions under which restricted, unregistered, and control securities can be sold or resold. Rule 144 provides an exemption from registration requirements to sell the securities through public markets if a number of specific conditions are met. The regulation applies to all types of sellers, in addition to issuers of securities, underwriters, and dealers. Understanding Rule 144Rule 144 regulates transactions with restricted, unregistered and control securities. These types of securities are typically acquired in unregistered, private sales or constitute a controlling stake in an issuing company. Investors may acquire restricted securities through private placements or other stock benefit plans offered to a company’s employees. The SEC prohibits the resale of restricted, unregistered and control securities, unless they are registered with the SEC prior to their sale, or they are exempt from the registration requirements when five specific conditions are met. Five Conditions for Resale of Rule 144 Securities• Five conditions must be met for restricted, unregistered and control securities to be sold or resold. First, the prescribed holding period must be met. For a public company, the holding period is six months, and it begins from the date a holder purchased and fully paid for securities. For a company that does not have to make filings with the SEC, the holding period is one year. The holding period requirements apply primarily to restricted securities, while resale of control securities is subject to the other requirements under Rule 144. Why Is Rule 144 Important?As an employee, small business owner, or investor, you may own some restricted or control securities. These are usually given in the following situations: Rule 144 is important because it provides an exemption under which you can sell these securities in the public stock market without registering them with the SEC. Investors and shareholders in private offerings have the opportunity to resell their restricted securities, which makes them more valuable than if you held onto them indefinitely. Who does Rule 144 apply to?Rule 144 applies to: Rule 144 does not apply to: Conditions of Rule 144To sell your restricted or control securities to the public under Rule 144, you must meet five conditions. Note that although Rule 144 is not the only way to sell such securities, it is the most commonly used and provides a safe harbor for sellers. Holding PeriodYou need to hold the securities for a minimum length of time (the holding period): This holding period only applies to restricted or control securities — not securities purchased in the public market, which are not restricted. However, if an affiliate purchases non-restricted securities on the public market, those shares become control securities, and their resale must meet the conditions of Rule 144. Free Initial Consultation with LawyerIt’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
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