[Big Mac]

I really appreciate all the great replies to my previous legal advice thread for my neighbor. I hope I'm not abusing the privilege, but now I want to start getting some tips for my own family's real estate situation. And again, for anyone kind enough to offer advice in this thread, I'm not holding anyone responsible for the fitness of this advice - I understand there are no warranties of any kind.

Okay, here's the background: As I mentioned in the last thread, my grandmother passed away in 2009 (about a year after my neighbor's mother). The beneficiaries of my grandparents' trusts/estate are my mother, brother and me on the one hand and my uncle on the other hand. My mother and uncle got equal 42.5% shares, and my brother and I got a combined 15%.

At issue: There are two pieces of real estate that the three of us want to retain ownership of (one of which my parents paid my grandparents for and should have owned outright, but I've stopped trying to fight that battle), whereas my uncle wants to be cashed out of his share soon. Because of the cost of attorneys, and due to the fact that I have experience writing legal settlement agreements, I have taken it on myself to draft an agreement between the four of us that will cash him out. I am, however, going to get the agreement I write up reviewed by a real estate attorney so that I'm sure it's up to legal grade, but before I do that I want to try and make sure I'm addressing the major points and taking the steps one would prudently take to make sure the agreement is solid and beyond legal question.

The broad agreement will have the following elements: My uncle will get additional cash beyond his share of certain inherited accounts the family holds, in order to draw down his equity in the two pieces of real estate, and then he will accept a five year private real estate note from us for the balance of his share in the properties.

What I'm wondering primarily is, aside from describing the transactions between the accounts in the agreement, and besides writing up the real estate notes, what do I have to make sure is done (for example with the title to the properties) to ensure that there's no possible ambiguity about ownership of the properties we're buying my uncle out of in the future? Should we be setting up new trusts or other vehicles to transfer the properties into based on my strong assumption that my grandparents' trusts will not be sufficient protection going forward, and if so should we be doing that around the same time we sign the agreement with my uncle? What are the most important issues I should be considering in a transaction like this?

[ShortcutToMoncton]

Honestly, just spend the $1500 or whatever it is and let a lawyer take care of this.

[Big Mac]

In my experience, around here, what we need done would be much more expensive than $1500. Much more. I wouldn't be surprised if something like this would cost $5,000-$7,500 if a lawyer were told just to do it all. It sounds like rates are more reasonable in your area. And my uncle is really weird about necessary fees. I'd rather do as much work as I can myself and then have it proofed by a lawyer, and besides I've already written up ~60% of everything.

[ShortcutToMoncton]

Hahaha, yikes. I need to move to Cali....

[Big Mac]

Haha yeah. The thing is, it's not completely straightforward - there are a lot of moving parts to the transactions involved. And I assume moving parts equal many more billable hours.

[rambo47]

You need real legal advice.

Here's why: In New Jersey, when two people own a piece of property jointly there is a little-known valuation law. It comes up often in divorces when the husband wants to buy out his ex-wife and makes a low-ball offer, figuring she'll have to take it. When one party offers the other a price for their half of the property, they have set fair value for their half as well. They are legally obligated to accept a buyout of their half at that low-ball price they set, should the other person decide to buy them out instead of selling. Doesn't happen often, but it does happen.

Things like that are out there, maybe even in CA. A professional would know.

[Big Mac]

Thank you for the information rambo. Interesting. We've already gotten an appraiser and have prices we agree with, but you're right I have to make sure everything is done properly.

I talked to a close personal friend who is a lawyer in Los Angeles and asked him if he had a referral to a good real estate lawyer. He said he had the best. At first my friend told me not to waste my time with the work I was doing, but when I told him there were a lot of parts involved and that I didn't want to pay a huge bill, he agreed that my strategy to write things out and get them certified by a lawyer would be best. Even if my attempt at lawyer language doesn't fit for this particular need, I know writing up all the details of how things will need to be handled (various account transfers, etc.) definitely will be important for the lawyer to have.

[imitchellg5]

Ask your lawyer friend to write it if he has the time. Take him out to dinner. Since he's in LA with you, he'll know what will fly the best for your county and city. Write your own ideas out, have your lawyer friend translate them, then have it certified.

[Big Mac]

Thank you Mitchell. Yeah, I'll definitely ask him how best to proceed with the source material I've produced. This lawyer I'm getting referred to just moved into the suites owned by my lawyer friend, so I'm confident I'll be treated well. But lawyers still want to make money no matter what, so I have to try to limit the expense.

Hey guys, my uncle raised a point. He got [referred to] a trust attorney to review the document I come up with, and he questioned why I'd want a real estate attorney. Should I be going with a trust lawyer, a real estate lawyer or an estate lawyer for this kind of need? On second thought, I know I definitely don't want an estate lawyer because the agreement I'd come away with would be ridiculously convoluted. The lawyer my friend referred me to is a real estate/business lawyer so I think I'm good, but what do you think? I guess I'll ask him his opinion when I speak to him soon.

[imitchellg5]

How complex is the estate situation? If it's just land with empty homes, that's pretty easy to figure out. If you've got cars, or really anything of any significant monetary value, it's going to be more difficult. But the lawyer you've been referred to sounds like he can handle the situation perfectly well. (I only know about this because my grandparents have been trying to figure all this out in Washington State recently)

[Big Mac]

It's a mix of issues: two houses with joint-tenancy rights of use, family property inside of one of the houses, a car, cash accounts, etc. The positive part is that, after my uncle gently prodded me to complete my work, I made excellent progress today and nearly have my draft of the agreement complete. I just hope the lawyer I go to will deem my work to be largely legal grade, and that way he won't have to do too much costly editing. I'll let everyone know how it goes, and maybe I'll have some tips for those in similar situations.

I hope your grandparents get things figured out without too much difficulty, Mitch. My advice to you is, if you see something potentially problematic in how things are going with them, speak out about it. Don't just be passive because you're the grandson and your opinion isn't supposed to carry as much weight according to some. Let your family know your concerns, stated respectfully, and don't just drop the issue. These types of matters can be hard for families to deal with because possessions can sometimes complicate family relationships greatly, but if you don't get problems taken care of early on, they can really haunt you down the line. You can't dictate terms to your grandparents, of course, but you're an adult and have a right and obligation to look out for the family. And I'm not saying it's easy, but it should be done - especially if both of your grandparents are still alive.

[imitchellg5]

Luckily they are very pro-active about it, and I'm the only grandchild. Most of their relative wealth is in properties scattered about the state, which makes things a challenge. That is very good advice though, thanks Big Mac

[Big Mac]

Here's an update. I spoke to the lawyer I was referred to by my lawyer friend, and the good news is that he's handled many similar real estate situations (what we need to do is not uncommon) and that a real estate lawyer is the right specialty to go to, at least in his opinion.

The downside? Cost. He says that for that level of work, he would need a $5,000 retainer, and it could end up costing double that, although likely less because I've done a lot of the work myself.

The lawyers here really do huge business. I'd hate to hear what a NYC lawyer would charge. So are you moving here Shortcut?

[Big Mac]

Here's a new update: I called the Los Angeles division of the state bar for a referral. The phone rep took my information and then matched me with a lawyer in West LA. I saw him two days ago and the consultation was fantastic. He's a real estate/business/contract lawyer who was originally a tax lawyer. He was on top of every issue, often two steps ahead of my next question. He was also very time efficient on my behalf (saving me billable time after my initial free 30 minutes). He asked for a $2,500 retainer, half of what others were asking for. He told me that will last for a while at the initial stage but that when it comes to getting the agreement written it will definitely cost more. I'm very confident at this point that I found exactly the right lawyer.

Regarding what I had written up as a draft agreement, he told me it wasn't legally enforceable as written but was a good outline for him on the details involved. It will be interesting to see how different the agreement he creates is from what I had written, but he made me see that there were factors and multiple scenarios regarding the different properties that had to be taken into account in the agreement and which I did not cover.