Real Estate Law Article

The Benefits of Hiring an Attorney When Purchasing a Home

 When purchasing a home, many legal issues can arise. Hiring an experienced real estate lawyer who is trained to handle the purchase and sale of real property is helpful to navigate the process. 

One of the most important aspects of any real estate deal is the contract. Although standard real estate forms may be used, an attorney can help you understand certain terms that can be confusing. They may also recommend the addition of specific language to reflect the buyer and seller’s agreement and wishes. Attorneys will work with your real estate agent in negotiating contractual terms on your behalf. It is important to ensure that your contract is in compliance with all state laws and county ordinances, and it should address any specific problems that might affect the future use of the property. 

Another important part of a real estate transaction is title insurance. Once you have signed the contract, you will need to obtain title insurance to ensure that the property is free of any encumbrances, such as liens or judgments, that would prevent the seller from having marketable title. A real estate attorney will examine recorded documents affecting title to the property, and then apply the Florida Uniform Title Standards to any title problems that arise during this review. Your attorney can explain the effect of any easements on the property as well as prior agreements or restrictions that were enforced by a prior owner. If the search reveals something problematic relating to title on the property, your attorney can advise you on how to proceed. 

Once you are ready to close on the property, your attorney can prepare all the important closing documents, such as the deed and the closing statement. Your attorney can help you understand the nature and amount of the closing costs, as well as provide advice as needed should any issues arise during the closing process. Once the deed and the mortgage paperwork are signed, your attorney can file and record these documents in the applicable county according to state law. 

Obtaining an attorney is extremely beneficial when it comes to the intricacies involved in real estate transactions. Buying a home is one of the largest purchases you will ever make. An experienced real estate attorney helps to represent your best interests and ensures that the entire process follows the applicable laws of Florida and the county in which the property is located. 

Estate Category

Secure Act and Its Impact on Retirement Plans

 On December 20, 2019, the President signed into law the “Setting Every Community Up for Retirement Enhancement” Act (the SECURE Act). The Secure Act modified many requirements for employer-provided retirement plans, individual retirement accounts (IRAs), and other tax-favored savings accounts. Most of the provisions go into effect this year (2020). Now is a good time to review and consider how these new rules may affect your tax and retirement-planning situation. 

Below is a brief overview of some of the key provisions of the Secure Act that may act on an individual’s retirement planning and tax and estate planning. 

Elimination of any age restriction for traditional IRA contributions. 

Prior to 2020, once an individual attained the age of 70 ½, he or she were not allowed to make traditional IRA contributions. Beginning in 2020, the Secure Act allows an individual of any age to make contributions to a traditional IRA, as long as the individual is working and has earned income. 

Required minimum distribution (RMD) age raised from 70½ to 72. 

Before 2020, retirement plan participants and IRA owners were generally required to begin taking RMDs, from their plan by April 1 of the year following the year they reached age 70½. For distributions required to be made after Dec. 31, 2019, for individuals who attain age 70½ after that date, the age at which individuals must begin taking distributions from their retirement plan or IRA is increased from 70½ to 72. 

Reduction of Stretch IRAs. 

For deaths of plan participants or IRA owners occurring before 2020, beneficiaries (both a spouse and non-spouse) were generally allowed to stretch out the tax-deferral advantages of the plan or IRA by taking distributions over the beneficiary’s life or life expectancy (in the IRA context, this is sometimes referred to as a “stretch IRA”). However, for deaths of plan participants or IRA owners beginning in 2020 (later for some participants in collectively bargained plans and governmental plans), distributions to most non-spouse beneficiaries are required to be distributed within ten (10) years following the plan participant’s or IRA owner’s death. This change eliminates the ability to “stretch” out the tax deferral over the beneficiary’s life. 

This 10-year rule requirement does not apply for distributions to (1) a surviving spouse of the account owner; (2) a minor child of the deceased account owner; (3) a disabled or chronically ill individual; and (4) any other individual who is not more than ten years younger than the account owner. These beneficiaries who qualify under this exception may generally still take their distributions over their life expectancy (as allowed under the rules in effect for deaths occurring before 2020). 

In addition to the foregoing changes, the Secure Act made the following changes and/or additions: (a) tax free or qualified distribution from a Section 529 savings plans to cover registered apprenticeships and to repay qualified student loans; (b) plan distributions (up to $5,000 per individual (or $10,000 for married couple)) used to pay expenses relating to birth or adoption for expenses related to the birth or adoption of a child are not subject to the 10% early withdrawal penalty for individuals under age 59 ½; (c) taxable non-tuition fellowship and stipend payments are now allowed to be treated as compensation for IRA contribution purposes, and therefore, the payments may be contributed by the individual to an IRA; (d) allow annuity and lifetime income option within employer plans; (e) incentives for business owners with 100 or fewer employees to establish a retirement plan (tax credits are increased from $500 to up to $5,000 for new plans); and (f) certain long-term part-time employees who work at least 500 hours in at least 3 consecutive years will be eligible to participate in their employers 401(k) plan (starts in 2021). 

With the start of a new year, it is always a good time to review and revisit your retirement plan and to consider tax and estate planning ideas. We recommend that you seek competent tax and legal counsel in tax estate planning and consult with your financial/investment advisor concerning your retirement plan.