What is a durable power of attorney?
A Power of Attorney is a document you sign while competent that authorizes another person to act for you. That person is called your agent. A Durable Power of Attorney allows that person to act even if you later become incompetent. You can create a durable power that will be effective when you sign it or after some triggering event such as when two physicians state, in writing, that you are not capable of handling your affairs.
Name only someone you absolutely trust to follow your wishes and handle your finances honestly.
What can my agent do?
Your agent may be able to sign legal documents in your place, buy and sell real estate for you, pay your bills, and take other financial actions on your behalf.
Can my agent make health care decisions?
State law allows you to create a durable Power of Attorney for Health Care. Under this law, you give your agent the authority to make health care decisions for you, if and when you are unable to make them.
How do a power of attorney for health care and a living will differ?
A Living Will is a declaration to physicians that expresses your wishes regarding life-sustaining procedures or non-orally ingested nutrition and hydration, if you have a terminal illness, an end-stage disease or if you are in a persistent vegetative state. You may direct that such life-sustaining procedures be withheld or withdrawn, or you may direct that they be used to sustain your life. A designation of health care surrogate for health care appoints an agent to make most decisions related to your health care. If you specifically grant the power, your agent can decide to withhold or withdraw non-orally ingested nutritional support and fluid maintenance, admit you to a nursing home or community-based residential facility, and make other health care decisions.
What if I become incapacitated without a power of attorney?
If you are no longer able to manage your property or care for yourself and you have not signed a Power of Attorney or named a health care agent, a family member, agency, or health care provider may petition the court to appoint a guardian and conservator to act on your behalf. The conservator will be responsible for managing your financial assets (the “conservator of the estate”), while the guardian will be responsible for decisions related to your care (the “guardian of the person”). A single individual may serve as both conservator of the estate and guardian of the person, or the court may appoint separate individuals. Significant costs are usually incurred in connection with the appointment of a conservator or guardian and for this reason it is wise to plan ahead by having appropriate powers of attorney in place as part of your estate plan.
How is a guardian appointed?
Guardians are usually appointed in proceedings before the probate court of the county in which the incapacitated person resides. Any relative, state official or other person may request that the court appoint a guardian. The person who is alleged to be incompetent must be informed of the petition for appointment of a guardian and of the scheduled time for hearing. The court will appoint a guardian ad litem to act as the attorney for the allegedly incompetent person. The guardian ad litem will interview the individual and others, investigate, and make a recommendation to the court as to whether it is the individual’s best interests to have a guardian. A doctor or other health care professional may also be appointed to examine the allegedly incompetent person. The guardian’s attorney will prepare the petition for the appointment of a guardian and will guide the petitioner through this process.
What is probate?
Probate is a legal process that takes place after someone dies. It includes:
Typically, probate involves preparation of legal documents and court appearances by attorneys. The attorney and court fees are paid from estate property.
After your death, the person you named in your will as personal representative – or, if you die without a will, the person appointed by a judge – must file papers in the local probate court. The personal representative must prove the validity of your will. Unless waived by the will and the court, the personal representative also will be responsible for preparing and presenting to the court lists of your property and your debts.
Your personal representative must find, secure and manage your assets during the probate process, which commonly takes six months to a year. Depending on the contents of your will, and on the amount of your debts, the personal representative may have to decide whether or not to sell your real estate, securities or other property. For example, if your will makes a number of cash bequests, but your estate consists mostly of real estate, your real estate might have to be appraised and sold to produce cash. Or, if you have many outstanding debts, your personal representative might have to sell some of your property to pay them.
In most states, immediate family members may ask the court to release short-term support funds during the probate proceedings. Eventually, the court will grant your personal representative permission to pay your debts and taxes and divide the rest among the people or organizations named in your will.
Who handles probate?
In most circumstances, the personal representative named in the will takes this job. If there is not a will, or if the will fails to name a personal representative, the probate court names someone (called an administrator) to handle the process. Most often, the job goes to the closest capable relative or the person who inherits the bulk of the deceased person’s assets. However, two additional requirements to serve as administrator include, (1) the person must reside in the State of Alabama, and (2) the person must post a bond, which can be expensive. These requirements usually are not present if you have a will.
If no formal probate proceeding is necessary, the court does not appoint an estate administrator. Instead, a close relative or friend serves as an informal estate representative. Normally, families and friends choose this person, and it is not uncommon for several people to share the responsibilities of paying debts, filing a final income tax return and distributing property to the people who are supposed to get it.
Should I plan to avoid probate?
Probate in Alabama is usually a relatively simple and inexpensive process. While there can be expense associated with probate, the costs of planning to avoid probate oftentimes far exceed the expense of probate. Also, many times persons seeking to avoid probate inadvertently incur adverse income tax consequences.
Whether to spend your time and effort planning to avoid probate depends on a number of factors, most notably your age, your health and your wealth. If you’re young and in good health, adopting a complex probate-avoidance plan now may mean you’ll have to re-do it as your life situation changes. And if you have very little property, you might not want to spend your time planning to avoid probate. A conference with an estate planning attorney can best answer this question for you.
What is estate planning?
Estate planning helps ensure that your assets will pass to those people you designate in a manner that will give them the maximum benefits; helps reduce or eliminate the tax burden on your estate; and allows your assets to pass to your chosen beneficiaries with a minimum of inconvenience and expense.
What does an estate plan involve?
A proper estate plan may include a will or trust, a written agreement concerning the status of your assets, a directive to your physician or a durable power of attorney and final instructions.
Should I regularly review my estate plan?
An estate plan should not be considered permanent. Conditions, as well as your desires, may change. Barring an important life change that warrants immediate review, an estate plan should be reviewed at least every five years. Life changes that might warrant review include birth, death, marriage, divorce or disability of you or of a beneficiary, a substantial change in your net worth or that of your beneficiary, purchase or sale of a business or moving your residence to a different state.
What are trusts?
A trust document is an agreement between three people dealing with assets. The Grantor is the creator of the arrangement who appoints a Trustee to hold the legal title to the assets for the benefit of the Beneficiary. Although there are certain legal limitations, it is possible for the Grantor and Beneficiary to be the same person and is even possible for the Grantor to serve as his own Trustee. In some situations, Grantors may wish a bank or other entity to serve as the Trustee.
Should I have a trust?
Trusts can offer a number of important benefits, including:
However, trusts are not appropriate for everyone. A conference with an estate planning attorney can best answer this question for you.
What happens after an offer to buy property is accepted?
The period between the time you pay your deposit check and the closing date is normally 30, 60, or 90 days. Your deposit check will be cashed so be sure you have sufficient funds in your account to cover it. It will be applied to the purchase price if the sale goes through. But if you cancel the deal for a reason not permitted in the contract, the seller may be entitled to keep your deposit (and may be entitled, in some cases, to additional damages). You should consult with an attorney prior to cancelling any contract.
Prior to closing, the requirements and contingencies of the purchase contract need to be reviewed and satisfied. The contract may contain certain conditions, contingencies and have other special requirements. Typical items include a financing contingency, a sales contingency and an inspection contingency, among others. The contract also will typically require that the title to the property is free of claims or defects. The inspection provision allows the buyer to have the property professionally inspected. The financing provision gives the buyer time to secure mortgage approval. The sales contingency allows the buyer time to sell his existing residence. Also, review of the title to the property by the closing attorney will ensure there are no unknown claims against the property. A real estate lawyer can assist and advise you regarding these matters.
Carefully review or have your attorney review the title report to ensure you have a clear title to the property. An estate planning attorney also can help you determine how best to hold title to the property.
What are contingencies?
Contingencies are escape hatches in a real estate contract. They let you walk away from the deal without penalty if certain conditions are not met. You might, for example, sign a contract to buy a property but make your obligation to close contingent on:
(1) Your being able to get a suitable mortgage loan.
(2) Your having a contractor inspect the condition of the home or building and your being satisfied with the contractor’s report.
(3) Your determination that the building can be renovated and used to your satisfaction.
(4) Your being satisfied with a report you will order concerning environmental hazards.
A qualified real estate attorney can help you put appropriate contingencies in your contract.
What are some things a buyer should look out for when dealing with the purchase of a house?
The buyer should consider:
(1) Exactly what property is included in the sale. Lighting fixtures, drapes or blinds, refrigerators, stoves, washing machines and dryers are often problem areas.
(2) The quality of the neighborhood.
(3) Whether any nearby development plans will affect the property.
(4) The inspection report.
(5) The amount of real estate taxes.
If the inspection is not satisfactory, can the buyer cancel the agreement of sale?
Among the many contingency clauses a contract should include is an inspection contingency clause that permits the buyer to opt out of the deal.
What is involved in recording the title?
When you purchase real property, you will receive the deed that transfers ownership or title of the property to you. The deed gives you formal title in exchange usually for a specified amount of money. The conveyance of real property is not complete until the deed is delivered to you or your authorized agent.
Following the closing, the closing attorney will file your deed with the Probate Court in the county where the property is located. This gives the public notice that you now own the property. Following this, you will then be directed to take the deed to your county tax assessor and have the property assessed in your name and claim any ad valorem tax exemptions to which you may be entitled.
Recording also allows for the examination of the chain of title. Anyone who wants to know who owns a piece of real property can check the records of the probate court for the county in which the property is located. Before you purchase real property, you can follow the chain of sales and transfers of the property – from the original grant of the land all the way to the current owner. When title insurance is purchased, the title insurer checks the change of title to determine whether any defects occurred in prior conveyances and transfers – defects may then be pointed out and excluded from coverage. It is critical to ensure that each time the property was transferred, the previous purchasers obtained clear title.
What is real property?
Land and objects permanently attached to it are considered real property. Permanent attachments also are known as improvements, including homes, garages, and other buildings. Gas, oil, minerals and other substances below the land also are considered permanently attached. Non-permanent items such as mobile homes and tool sheds are not considered real property.
What types of laws restrict real property?
An array of federal, state, county and local laws restrict what you can do with real property that you own. Various governmental agencies are responsible for enforcing these laws. Violation of real property laws can result in fines, penalties, injunctions and even criminal prosecution. Among the most common restrictions are:
(1) zoning – limitations on the use of the property for residential, industrial, agricultural, or commercial purposes and restrictions on the types of improvements to the real property;
(2) environmental regulations — restrictions on the types of materials that can be stored on the real property and regulations regarding who is responsible for their removal;
(3) public easements and rights of way — these are used to allow access to other property, to provide for roads and sidewalks, and to enable electric/gas/telephone/sewer lines to be installed;
(4) deed and subdivision restrictions or covenants — these are documented in the public record and limit current and future uses of property. Limitations can include the density of a building, dictate the type of structure that can be built or prevent buildings from being used for specific purposes. These may also include home owners’ association covenants and similar restrictions.
What are the risks in owning real property?
There are many risks inherent in owning real property. Some of the more common include:
(1) liability for violation of zoning ordinances;
(2) liability for environmental hazard clean-up;
(3) liability to others who are injured on the property;
(4) liability to others who are injured by the property (such as an uphill landowner is responsible when his land slides onto a downhill landowner’s property);
(5) liability to third parties pursuant to contract (such as responsibility to make mortgage payments to the lender);
(6) liability to a purchaser when the property is sold (if there is a problem in transferring title, interest or possession);
If you fail to maintain your property or knowingly create a condition on your property that causes injury to someone’s property or person, you could be determined to be negligent and thus responsible for the harms and injuries that result from your negligence. To reduce your exposure to risk from owning real property, you have an affirmative obligation to maintain your property so as not to cause harm or injury to others.
What is eminent domain?
Federal, state and local governments have the right of “eminent domain,” which means they can condemn and force the sale of private property for public purposes. When private property is taken by the government, the owner is entitled to just compensation for the property.
What is an easement?
An easement allows another person the right to use your land for a specific purpose. The most common easements are those granted to public utility or telephone companies to run lines on or under your private property and those granted to neighboring property owners to use a common driveway to give access to their home.
What is an option?
It is a right a seller grants a buyer to buy real estate within a certain period of time. If someone is interested in buying an office building but wants more time before committing to the purchase, the prospective buyer could offer to pay the owner an option fee to reserve the property. In return, the owner might be willing to grant you the right to buy the building within a certain period at a specified price. The owner would not be able to sell to anyone else in the meantime.
You could agree that all or part of the option fee would apply toward the purchase if you decided to actually purchase the property. If you did not exercise your option, you usually forfeit your option fee.
What provisions should be in a commercial real estate contract?
Since every real estate deal is different, you will need to get advice from a lawyer on how best to protect your interests. Your contract likely should address the following:
(1) An exact description of the property you are buying, including the land surrounding the building;
(2) The purchase price and whether it is all due at closing or in installments;
(3) A list of any equipment or personal property that is included in your purchase;
(4) Any contingencies that must be met before you are obligated to complete the purchase, for example, you can make the deal contingent on your ability to get a mortgage loan;
(5) How property taxes will be pro-rated (allocated) between you and the seller;
(6) The type of title evidence or title insurance the seller must provide;
(7) The date for closing and delivery of possession;
(8) What legal recourse a party has if the other party defaults;
Is there a difference between a residential and a commercial lease?
When a person leases rental property from a landlord for use as a residence, the arrangement is called a residential lease. When a business leases rental property, the arrangement is called a commercial lease.
While there are many similarities between residential and commercial leases, state and local law often regulate the relationship between a tenant and a landlord under a residential lease. These laws are designed to provide basic requirements for the condition of rental property, and to protect tenants from unscrupulous landlords. Since commercial leases are viewed as being contracts between knowledgeable business people, less governmental protection is needed.
What are some rights and of the landlord and tenant?
Tenants have a responsibility to:
Landlords are obligated to provide:
How do I evict a tenant?
Eviction can be based on non-payment of rent, lease expiration, violation of lease terms or nuisance. To ensure your rights as a property owner are protected, you should contact a qualified attorney before initiating eviction.