Monthly Archives: May 2010

New law: Home title can be protected from creditors in living trust

Estate Planning, Living Trusts

Most married couples hold title to their home in “tenancy by the entirety.” Married couples quit holding title as joint tenants when tenancy by the entirety was allowed in the mid 90’s in Illinois.

This means that if one dies, the house snaps to the other avoiding probate. Also, the house is protected from creditors. So if there is a court case against one spouse, the winner of the court case cannot enforce the judgment against the house. If the court case is against both spouses, the creditor can try to take the house.

Until recently, if the married couple had a living trust, and chose to deed the house to their trust, the couple lost the protection of tenancy by the entirety. A new law just passed that allows a married couple to hold title to their home (it only applies to a primary residence) in a living trust and keep the protection of tenancy by the entirety. (To be honest, I’ve never understood why the legislature allows married couples to protect their assets from creditors, but not single, divorced or widowed folks?)

The deed will convey title to the living trust, but will also state that title is being held as tenants by the entirety. Both spouses have to be trustees of the trust and the trust has to be for their benefit.

This is all brand new and was just passed last month.

Many living trusts that I review have only one trustee. From what I see, the trust will have to be amended to add both spouses as co-trustees. I almost always put both spouses on as co-trustees so changing title to the new tenants by entirety/living trust hybrid will be pretty easy for me.

I like the new tenancy by entirety/living trust form of ownership and suggest that clients take advantage of this (almost) free form of asset protection.

Is HAMP loan modification program dying?

foreclosures-shortsales

This is a well-written post on HAMP, the loan modification program. It talks about how HAMP appears to be dying due to “strategic defaults” (a person whose home is worth less than the mortgage just quits paying, without trying to sell it or modify the loan) and an overly complicated approval process.  Fewer and fewer people are making application for loan modifications and of those who do apply, many are shot down for lack of income.

Speaking of septic, mold, radon and structural engineers…

Real Estate-Purchases

There are many sub-specialties in real estate. I want to highlight some folks who do a nice job in some of these areas.

Well & Septic Testing

There are only a few sanitarians who deal with well and septic testing. Brian Sheehan of WS Inspectional in Buffalo Grove , 847-721-8615, does a nice job on well and septic inspections and doesn’t make a mountain out of a Wisconsin Mound… if you know what I mean.

Radon

Eliot and Associates 630-325-8005 does radon testing and remediation. I like their website: http://www.radonillinois.com/ They’ve done 10,000 radon mitigation systems (literally), so I often refer clients to them.

Structural Engineer

When you hear the words “structural engineer,” used in the context of a pending real estate transaction, it does not bode well for its future.  You can usually bet the deal is going down in flames. Recently, two separate clients hired Stuart Jacobsen & Associates of Northbrook 847 480-8899, http://www.skja-engrs.com/ to prepare structural engineering reports for homes during pending deals. The company charges reasonably and both transactions closed, which was a minor miracle.

Mold

Curt Mankoff of Mold Inspection Specialists in Lincolnshire, 847-774-6653, http://www.moldinspectionspecialists.com/index.html is an industrial hygienist and has done thousands of mold inspections.  He does the mold inspection (usually after the home inspector finds mold), not the mold removal/ remediation, which  is done by yet another party.

How to protest Cook Co. real estate taxes now

Real estate tax

Real estate taxes have remained level or increased while home prices have tanked. With lower home values, clients reasonably expect that they will be able to lower their real estate taxes to reflect the lower home prices. Cook County real estate taxes can be protested at two levels, the Cook County Assessor and the Board of Review. The Board of Review is now open in many Cook County townships and it may be worth filing a petition to lower your taxes. Here’s some background on how to undertake such a venture:

Can I protest taxes myself?

Yes, you can file a lack of uniformity complaint yourself with the Board of Review. The website is here and the forms and decent explanations are on the site. A lack of uniformity complaint means that you are claiming that you are not taxed uniformly with your neighbors.

How do I know when it is time to protest my taxes?

The Board of Review is currently accepting tax complaints. It opens by township. Palatine, Wheeling and Elk Grove townships are open right now, but won’t be for long. If your township is “closed” it is too late and you will have to wait until next year.

Do you handle real estate tax assessment cases?

No, I don’t. This is a specialty area of the law. I usually hire an attorney of my own to try to reduce the taxes on my house in Palatine. In my case, two out of three times, the tax bill was reduced and I was happy to pay someone to take care of the case for me.

What attorney should I hire to protest my taxes?

Most attorneys who handle real estate tax protests send mailings to homeowners when the assessor and board or review is accepting complaints. Some clients think that because the attorney sent a mailing then the attorney is somehow suspect, but that is not the case. All tax protest attorneys send mailings. Most times you sign a retainer agreement and send it in with no or a small payment of $50.00. The fee agreement pays the attorney 50% of the first year’s tax savings. This is a contingency fee agreement, so if the taxes are not reduced, you pay nothing. Richard Shapiro in Evanston, (847) 869-8686, and Christopher Walsh in Chicago, 312-372-1155,  are two attorneys I have referred clients to in the past. You will not meet with or talk to the attorney in most cases. The case is all handled through the mail.