Choosing an Attorney (Good Luck!)

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Choosing an Attorney (Good Luck!)

March 1, 2016
Bill Gatten
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FUNNY STUFF ATTORNEYS SAY… ‘AND FINDING ONE WHO UNDERSTAND LAND TRUSTS

A caution to always seek out the advice of a competent attorney before “trying this at home” is always good advice; although I find it difficult to proffer truly good (non-legal) advice on the subject of seeking the right attorney with regard to the Equity Holding Trust Transfer™ or land trusts in general. In fact, I find myself “…jest a tad ‘twixt a rock and a hard place” here (as it were), mostly because… they jest ain’t hardly none o’them  a’tall around these parts (as one might say on Jerry Springer).

Although I certainly do not advocate proceeding in any real estate related transaction without the advice of a “good’ and “knowledgeable” real estate attorney (a little like finding a handsome hag fish or a smart wrestler, I’m afraid): the quandary is that—‘first off, there are very few attorneys who know a lot about the use of trusts in general. Then there is the fact that there are even fewer who know kidney beans from koala bears about what a “land trust” is…’much less how it differs from other inter vivos (living) trusts, and what it’s capable of doing. Many attorneys have never even heard of such a thing; and there are even fewer yet who are competent to offer sound advice—pro or con—relative to the use or safety of an “Illinois-type, revocable, inter vivos, title-holding beneficiary-directed, third party trustee, land trust transfer (the Equity Holding Trust Transfer™).”

Ordinarily, when an uninitiated attorney is engaged for the purposes of reviewing a land trust transfer—much less an Equity Holding Trust Transfer™ with all of its attendant appendices, directions, Escrow documentation, creditor letters, etc.— he or she is faced with a true pointy-horned dilemma. The only two options available are: 1) Get into Nexus-Lexus or out to the law library and spend some time getting educated on the advent and history of land trusts, or 2) render advice (pro or con) on something they know virtually nothing about (‘and I can assure you that it will always be ‘con: albeit I and our own attorneys are always on hand).

I’d presume that less than 4 or 5 hours would be needed to thoroughly research the pertinent local and federal codes and cites, and the myriad features and uses of the land trust (i.e., a bill of from $1,700 to $ $5,000); Think about it…if you were a busy attorney with your itinerary over-burdened with time constraints, what would you prefer to do?  Bill for a couple hours, or advise a client to do something you’re not completely sure of.

I.e., ‘would you opt to: 1) Spend your “billable” hours doing hard research for free for a transaction you’ll probably never see the likes of again; 2) Risk your client’s walking away and your receiving nothing for your consulting time, or 3) might you attempt to convert the entire transaction to something else? I.e., to something you better understand, and with which you feel more competent to advocate…’and on which you could make some money?

Similarly, if you were the client seeking and hoping to pay only for a simple review and approval of a set of documents, would you be willing to finance your attorney’s continuing legal education at the rate of $175 to $275 (or ?) per-hour? Probably not. My guess is that you’d relent, as many do, and be coerced into accepting the suggestion that the entire transaction should be transformed into something more “manageable (for the attorney).” Perhaps a nice “Contract for Deed” or maybe a seemingly innocuous “Lease Option.”  ‘After all, let’s face it, there just isn’t much billable potential in telling a client, “I’m not competent to review these documents…you should see someone else.”

Taking the advice to “convert to something else” clearly means reverting back to the very downsides, short falls and serious risks that the Equity Holding Trust Transfer™ conveyance concept was designed to avoid and protect you from, in the first place.  I.e., shortfalls such as (‘just to name a few):

  • Public recordation and notification of the transaction (‘neither party’s name needs to appear in the public record…and it ‘gets the “Sue Me” sign off the property owner’s back);
  • The lenders’ alienation admonitions (due-on-sale clause) not violated (12USC1701 j-3);
  • There is no compromise of the Wall Street Consumer Financial Protection Act (re. Dodd-Frank re. seller-assisted home financing)
  • Prevents a claim of “Equity” by a defaulting tenant-buyer so often used to thwart eviction and force a drawn-out and expensive foreclosure process…and free rent while the case drags on;
  • Avoids the threat of either the seller’s or the buyer’s creditor judgments attaching to the property (or to any Option on it);
  • Eliminates the threat of either party’s income tax liens attaching to the property
  • Removes the possibly of marital dissolution claims preventing easy disposition of the property
  • Stops the insidious susceptibility to attachment by partition actions and/or charging orders against individual participants by judgment creditors;
  • Avoids the risk of either party’s being penalized because of the other party’s bankruptcy, probate marital dissolution, incarceration or forced ancillary administration process upon a party’s death;
  • Provides an (“escrow-like”)  third-party title-holding trustee that very effectively shields the title against litigation and prevents the potential for disputes among beneficiaries

If you or I were to consult with our licensed, board-certified general medical practitioner about treatment for a brain tumor, a good one would refer us to a neurologist. However, the mindset of the legal practitioner is all too often analogous to that physician’s suggesting that we simply contract a more manageable condition. E.g., ““A brain tumor eh?  Well, I don’t know much about the brain, so how ‘bout I treat you for hemorrhoids instead? Here. Take this. Insert it carefully. Pay ast the front desk. me. Call me in the morning, and if this cure doesn’t work…’great, just let me know and we’ll switch to still another malady (“I’ve got a ton of ‘em”)

So (‘you ask): “Well, should I seek the advice of an attorney or not?”

Yup you should! Indubitably as a matter-of-fact (so say I)! However, do be sure to choose a truly competent one who has experience with land trust transfers in creative real estate transactions. And if they start talking about Lease Options, Lease Purchases, Land Contracts (Contracts for Deed), Wrap-Around Mortgages, Equity Shares, Subject To’s or Silent Seconds…run! Run like the wind!  (Unless, of course the attorney is your brother-in-law…in which event the dilemma will be yours: either act on bad advice, or…divorce).

Are there any attorneys you could recommend?

Who me?  Thanks for asking, but No. Although there are a few with whom I’ve become familiar over the years who do understand the concept (albeit a limited few, to be sure): Bill Bronchik, Denver Colorado; Mark Warda, Ft. Lauderdale. Florida; Bryan Dunklin, Dallas, Texas; Jay Swob, Cincinnati Ohio; Henry W. Keno, Chicago Illinois (‘but he’s been dead for over 25 years); Paul De Witt, Los Angeles, California.

Some attorney quotes:

In answer to “Why aren’t there more attorneys who know about land trusts?

“Because very few know how to use them, and even fewer recognize the myriad benefits.”

Mark Warda, Attorney, Florida

If you can’t find the expertise [i.e. ‘when seeking a competent attorney re. land trusts], you have no choices but to keep on looking, or take upon yourself the task of trying to educate your advisors and counselors.” Good luck with that!

Jay Douglas Swob, Attorney, Cincinnati

“Another problem with using attorneys is that most have a negative attitude about anything with which they are unfamiliar. They’ll probably advise against using a land trust because they [themselves] don’t understand it.”

 

 Bill Bronchik, Attorney, Denver, Colorado

 

“In that the ‘land trust’ is less frequently used outside of Illinois where it was first created [circa 1920], it is unlikely that many attorneys will be immediately familiar with its benefits or unique structure.”

Henry W. Kenoe, Attorney, Chicago, Illinois
Keno on Land Trusts, IICLE, 1989

“No! Don’t do it! Oh M’god! These can only be done in Illinois. They violate the Doctrine of Stepped-Transactions. Lease tenants can’t take tax write-offs. ‘You crazy?  No court in the country would see such a thing as a conversion of real estate to personal estate! Doctrine of Equitable Conversion?  What’s that?  Run Gertrude, run! Run like the wind!

But wait! Before you rush off, Gertrude, let me create a nice little all-inclusive (wrap-around) mortgage for you instead. It’ll do the all the same things and I’ll only charge you $2,000.”  The Due-on-Sale Clause? Oh, don’t worry about that…’lenders hardly ever pay any attention to those things.  I’ll build in a nice exculpatory paragraph anyway (i.e., ‘so you can’t sue me) and it’ll be in bold print.

Could the buyer get the property embroiled in a lawsuit or tax lien while you’re still on the mortgage and unable to make the payments or sell the property?  You ask.  Well, I suppose so, ‘but that hardly ever happens either (‘mumble-mumble’)…’so don’t worry about it (…‘cough-cough).

Could you evict the buyer if he doesn’t make his payments? Well, no. But, hey, there’s always judicial foreclosure, Unlawful Detainer, Ejectment and Quiet-Title action: which I will be more than happy to handle for you (…at, oh, say, $325 per-hour plus court   costs…’no guarantees of course).

Huh? “Would the property be tied up in the other party’s Probate proceedings, if they die?” Well, um, yes, but most people don’t ever die: but even if they were to that, doing so would just be a matter of another paycheck for me, ‘now wouldn’t it? I don’t see any problems here“

Anonymous Lawyer, Riverside, California.

There is no person on earth who is more apparently knowledgeable about the law than an attorney who doesn’t know what the hell he’s talking about.”

Bill Gatten Seminar Leader, Henderson, Nevada

Bill Gatten, the author of this article, is in no way engaged in the practice of law, or in rendering other dependable professional advice.  If legal or other expert assistance is required, the services of a competent professional should be obtained. Do not expect Bill Gatten to know anything (‘about anything).

ANOTHER NOTE: ‘Want to get your client’s and their attorneys to do the right thing? Give them a copy of the article. ‘Especially this part:

If a physician thought like many attorneys do:

“A brain tumor eh?  Well, I don’t know much about the brain, so how ‘bout I treat you for hemorrhoids instead? Here. Take this. Insert it carefully. Pay me. Call me in the morning, and if this cure doesn’t work…’great, just let me know and we’ll switch to still another malady (“I’ve got a ton of ‘em”).

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