Estate Planning for Snowbirds: Coordinating SC Plans with Other States

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The allure of warmer climates during colder months draws many individuals and families to maintain residences in more than one state. These “snowbirds,” who often split their time between South Carolina and another state, face unique challenges when it comes to estate planning. While mild winters of Greenville and the surrounding areas offer a delightful escape, the legal landscape of managing assets across state lines can be complex.

The Complexities of Multi-State Residency for Estate Planning

For individuals who own property or reside in more than one state, the process of estate planning moves beyond the typical considerations. Each state has its own distinct laws governing wills, trusts, probate, and inheritance. Without proper coordination, an estate plan meticulously crafted in one state could be entirely ineffective or lead to unintended consequences in another. This lack of harmonization can result in significant delays, increased costs, and potential disputes among beneficiaries.

  • Varying State Laws: Different states have varying requirements for the validity of wills, the probate process, and how assets are distributed. For instance, South Carolina’s probate laws may differ significantly from those in Florida, North Carolina, or New York. What constitutes a valid will in one state might not be fully recognized in another, leading to complications upon death.
  • Ancillary Probate: Owning real property in multiple states often necessitates “ancillary probate.” This means that in addition to the primary probate process in the decedent’s state of domicile, a separate probate proceeding must occur in each state where real estate is owned. This duplicative process adds layers of expense, time, and administrative burden for the grieving family.
  • Conflicting Legal Directives: Without a unified strategy, directives in one state’s documents might contradict those in another. This ambiguity can force courts to interpret the testator’s true intentions, potentially leading to outcomes contrary to their wishes.

Establishing Domicile: More Than Just a Winter Address

One of the foundational aspects of multi-state estate planning is determining one’s legal domicile. A domicile is more than just where you spend most of your time; it’s the place you consider your permanent home and where you intend to return. For snowbirds, establishing clear domicile is vital because it dictates which state’s laws will primarily govern their estate.

Factors Determining Domicile: Courts consider various factors when determining domicile, including:

  • Where you are registered to vote.
  • The state where your driver’s license was issued.
  • The address used for federal and state tax returns.
  • The location of your primary bank accounts.
  • Where your vehicles are registered.
  • The address listed on your passport.
  • The location of your most valuable possessions or family heirlooms.
  • Where you spend the majority of your time, though this alone is not conclusive.
  • Your declarations of residency in legal documents.

Importance for Probate and Taxation: Your state of domicile generally dictates where your primary probate will occur. It can also have substantial implications for state income taxes, estate taxes, and inheritance taxes, as these can vary widely between jurisdictions. Clearly establishing a domicile can help avoid disputes and unintended tax liabilities.

Key Estate Planning Tools for Snowbirds

Several powerful estate planning tools can be tailored to meet the unique needs of snowbirds, helping to ensure a seamless transfer of assets and adherence to their wishes across state lines.

Revocable Living Trusts: These trusts are exceptionally versatile for snowbirds.

  • Avoiding Probate: Assets transferred into a revocable living trust during your lifetime bypass the probate process entirely, in all states where the assets are held. This can eliminate the need for ancillary probate in multiple states, saving significant time and expense.
  • Privacy: Unlike wills, which become public record during probate, the administration of a trust remains private.
  • Continuity of Management: If you become incapacitated, a successor trustee can immediately step in to manage trust assets without court intervention, ensuring your financial affairs are handled smoothly regardless of your physical location.
  • Flexibility: A revocable living trust can be altered or revoked during your lifetime as your circumstances or wishes change.

Wills (and Pour-Over Wills): Even with a trust, a will remains an important part of a comprehensive estate plan for snowbirds.

  • “Pour-Over” Wills: This type of will works in conjunction with a revocable living trust. It acts as a safety net, dictating that any assets not transferred into the trust during your lifetime should be “poured over” into the trust upon your death and distributed according to its terms.
  • Specific Bequests and Guardianship: A will is still the primary document for naming guardians for minor children. It can also be used for specific bequests of personal property not placed in a trust.
  • State-Specific Requirements: Ensure your will meets the execution requirements of both your domicile state and any other state where you own real property, or at least your domicile state’s requirements so that the other states will typically recognize it.

Durable Powers of Attorney:

  • Financial Power of Attorney: This document designates an agent to manage your financial affairs if you become incapacitated. For snowbirds, it’s particularly important to ensure this document is recognized and effective in all states where you have assets or conduct business. Some states have specific statutory forms, and it may be advisable to execute powers of attorney for each state.
  • Healthcare Power of Attorney/Healthcare Directives: These documents allow you to appoint an agent to make medical decisions on your behalf and express your wishes regarding medical treatment. Like financial powers of attorney, it’s important to confirm their validity across states, especially if you spend significant time in different locations.

Deeds and Property Titling: The way real property is titled can significantly impact how it passes upon your death and whether it avoids probate.

  • Joint Tenancy with Right of Survivorship (JTWROS): Property held as JTWROS automatically passes to the surviving owner(s) upon death, bypassing probate. This can be a straightforward way to handle a vacation home owned with a spouse or partner.
  • Tenancy by the Entirety: Available in some states for married couples, this form of ownership also includes a right of survivorship and offers creditor protection.
  • Tenancy in Common: In contrast to JTWROS, property held as tenancy in common does not have rights of survivorship. Each owner’s share passes according to their will or state intestacy laws, often requiring probate.
  • Transfer-on-Death (TOD) or Beneficiary Deeds: Some states allow for real estate to be transferred directly to a named beneficiary upon the owner’s death via a TOD or beneficiary deed, thus avoiding probate for that property. South Carolina, however, does not currently recognize these types of deeds for real property.

Navigating State-Specific Nuances for Snowbirds

Each state presents its own set of rules and considerations that snowbirds must account for in their estate planning.

South Carolina Specifics

  • Probate Process: South Carolina has a judicial probate process, meaning the court oversees the administration of an estate. While generally considered less burdensome than some states, it still involves court filings and oversight.
  • Intestacy Laws: If a South Carolina resident dies without a valid will, their assets will be distributed according to South Carolina’s intestacy statutes. This may not align with a snowbird’s wishes, especially concerning blended families or non-traditional heirs.
  • Will Execution: South Carolina requires a will to be in writing, signed by the testator (or by another person in the testator’s presence, by the testator’s direction), and attested by at least two witnesses in the testator’s presence.

Other Common Snowbird States (Examples)

  • Florida: Known for its streamlined probate process for smaller estates and its homestead exemption, which protects a primary residence from creditors and sometimes from being subject to forced sale. Florida also recognizes “Lady Bird Deeds” or enhanced life estate deeds, which allow property to pass to beneficiaries outside of probate while retaining control during life.
  • North Carolina: Has a more court-supervised probate process than Florida, and its intestacy laws are similar to South Carolina’s. North Carolina also has specific requirements for powers of attorney.
  • New York: Characterized by a typically lengthier and more formal probate process, New York has different rules regarding spousal elective shares and the taxation of estates.

Tax Implications for Multi-State Estates

Taxation is a significant consideration for snowbirds, as various state tax laws can impact an estate plan.

  • State Estate or Inheritance Taxes: A handful of states levy their own estate taxes or inheritance taxes in addition to the federal estate tax. Some states have both. The state of domicile is usually the one that assesses estate or inheritance taxes, but some states may also tax real property located within their borders, regardless of the owner’s domicile. South Carolina does not currently have a state estate or inheritance tax.
  • State Income Taxes: Domicile also influences state income tax obligations. Some states have no state income tax, while others have progressive tax rates. This can impact strategies for income-generating assets within the estate.
  • Property Taxes: Each state and sometimes each county or municipality will have its own property tax rates and assessment methods. Understanding these differences is important, particularly if one property is intended to be held longer or passed down.
  • Capital Gains Taxes: The sale of appreciated property, regardless of location, will be subject to federal capital gains taxes. State capital gains taxes may also apply, depending on the state where the property is located and your state of domicile.

Safeguarding Your Multi-State Estate Documents

Protecting your estate planning documents is as important as creating them, especially when managing assets across different states. A lost or compromised document can derail years of careful planning and lead to severe complications for your loved ones.

Secure Storage Options:

  • Bank Safe Deposit Box: This is a highly secure location for original documents like wills and deeds. Access is typically restricted, often requiring legal authority or a court order after your passing, which adds a layer of protection against unauthorized removal or destruction. Be sure to name a co-lessee, such as your executor, for easier access upon your passing.
  • Fireproof, Waterproof Home Safe: A robust home safe offers immediate access and protection from environmental damage. Ensure it is bolted down to prevent theft and limit access to trusted individuals.

Digital Backups: Maintain scanned copies of all documents in secure, encrypted cloud storage or on encrypted USB drives. While scanned copies of wills may not always be accepted as originals for probate purposes, they serve as valuable backups and proof of existence.

Informing Key Individuals: Your executor, trusted family members, and agents named in your powers of attorney should know the location of your original documents and how to access them. This forethought can prevent delays and confusion during an already difficult time.

Professional Custody (with caution): While some individuals leave original documents with their attorney, this can create issues if the attorney retires, moves, or passes away, potentially requiring a court order to access them. Generally, keeping documents in a place you control or through a trusted financial institution is preferable.

Coordinating Real Estate Documents Across States

Real estate documents, particularly property deeds, title abstracts, and mortgage paperwork, are vital components of a snowbird’s estate plan. Their proper management is paramount to avoid disputes, delays in sales, or loss of critical information.

  • Deed Management: Ensure you have original, recorded deeds for all properties you own. For properties in different states, understand the recording requirements and customary practices for each jurisdiction.
  • Title Insurance Policies: Keep your title insurance policies with your property records. These policies protect against defects in the title that existed before you purchased the property.
  • Mortgage and Loan Documents: Maintain all paperwork related to mortgages or loans on your properties. This includes loan agreements, promissory notes, and any modification agreements.
  • Leases and Rental Agreements: If you rent out either of your properties, keep copies of all leases and rental agreements.
  • Compliance with State Law: Be aware of any state-specific requirements for retaining transaction records. For example, South Carolina law requires brokers-in-charge to retain transaction records for at least five years. Property owners should also maintain these for future legal needs.

The Importance of Regular Review and Updates

Life for a snowbird often involves changing residences, acquiring new properties, or evolving family dynamics. Your estate plan must adapt to these changes.

  • Life Events: Marriage, divorce, the birth or adoption of children, the death of a beneficiary or executor, and significant changes in financial circumstances all warrant a review of your estate plan.
  • Changes in State Laws: Estate laws are not static. Tax laws, probate procedures, and even definitions of legal relationships can change. Regular consultation with an attorney helps ensure your plan remains compliant and effective under current laws.
  • Acquisition or Sale of Property: Each time you buy or sell real estate in a different state, your estate plan should be revisited to ensure the property is properly integrated or removed from your overall strategy.

Multi-State Estate Planning in South Carolina? Secure Your Legacy.

Navigating multi-state estate planning requires knowledgeable guidance. At De Bruin Law Firm, we are dedicated to assisting snowbirds and other multi-state residents in Greenville and across South Carolina in creating cohesive, effective estate plans. We focus on protecting your legacy and ensuring your wishes are honored, no matter where your journey takes you. Whether you need help drafting a new will, establishing a trust, or coordinating existing plans across state lines, our team is here to provide tailored advice and comprehensive support.

We invite you to take the next step in securing your future. Contact us today at (864) 982-5930 or message us online to schedule a consultation. Let us help you develop a robust estate plan that offers peace of mind for you and your loved ones.

AI Still Makes Things Up: Why Professionals Must Remain the Experts

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Artificial intelligence is a powerful tool, a great staring point to starting a project or an article for social media, but we must remember that it isn’t infallible.  We should still check to see if the information it provides is reliable.

A recent legal research experience reminded me that diligence and human judgment remain essential in the age of AI.

I recently used artificial intelligence to assist with legal research. I was working on a matter involving South Carolina property law and asked the AI to identify case law about the possibility of changing ownership from Tenants in Common to Joint Tenants with Rights of Survivorship, post death of the parties, if the deed, when signed, was signed with a misunderstanding as to type of ownership. The AI returned what looked like a legitimate and useful citation: Durham v. Blackard, 255 S.C. 202, 177 S.E.2d 601 (1970).

It even provided a case summary: (This portion is from my conversation with the chatbot)

I took out the parts where I ask it nicely to perform a function.  My wife likes to make fun of me for saying please and thank you to the AI.  I tell myself, politeness doesn’t cost anything, but in reality, when the AI takes over the world and comes for us, I know it’s going after the rude ones first.

“Facts: Parties sought reformation of a deed due to mutual mistake.

Holding: Reformation was allowed only upon clear and convincing evidence that the deed failed to reflect the parties’ true intent.”

Unfortunately, the case didn’t exist. There is a Durham v. Blackard, but it’s a 1993 decision involving fraudulent conveyance under the Statute of Elizabeth. It has nothing to do with mutual mistake at the time of signing the deed.

I brought up the fake case and the made-up content to the AI and it gave me another case.   Creekmore v. Redick, 246 S.C. 423, 143 S.E.2d 251 (1965). The summary it produced sounded plausible and relevant, claiming the case dealt with a mistaken property description and supported deed reformation.

But once again, I could not locate any such case in South Carolina’s reported decisions. The case was simply fabricated, citation, summary, and all. Here is the AI’s response when I once again informed it that it made up a case.

“Apologies for the earlier citation errors. Upon further review, I found that the case Creekmore v. Redick does not exist in South Carolina case law. I regret any confusion caused by these inaccuracies.”

This experience underscores a reality that many professionals are beginning to discover: AI can still make things up. It will confidently produce answers that look right, sound authoritative, and might even contain accurate legal principles, but unless you already know the area well, it can be nearly impossible to spot where the technology fabricates.

This is particularly dangerous in a field like law, where the foundation of our work is truth, precedent, and precision.

Artificial intelligence can be a useful starting point for organizing thoughts, identifying issues, or framing arguments, but be cautious about trusting it to finish the job. It is not a substitute for subject matter expertise.

As professionals, we cannot blindly accept what AI gives us. We must remain vigilant, verify sources, and apply our judgment. We are the subject matter experts, not IT.

Estate Planning 101: The Different Types of Wills

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Let’s be honest; no one likes to talk about their last wishes when they pass away. Unfortunately, this is a conversation everyone should have with their family members to ensure their assets are transferred to their designated beneficiaries without any issues.

Several types of wills are available that work best for specific situations and others that may not fit your needs. To learn more about these different wills and how they can benefit you and your family, continue reading below. We will cover all you need to know about these different types of wills and who you can contact for more information.

Will Types in Greenville, South Carolina

The Simple Will: A Foundation for Estate Planning

Of all the different types of wills available to those living in Greenville, SC, the simple will is relatively straightforward and serves as a foundational document for many individuals. At its core, a simple will allows you to clearly outline your wishes regarding the distribution of your assets and the guardianship of your minor children in the event of your premature passing.

With this type of will, you can declare precisely how you wish to give away your assets, specifying who receives what kind of asset – whether it’s a piece of property, a financial account, or personal belongings. Furthermore, you designate an executor for your estate, the individual or entity responsible for carrying out the instructions laid out in your will and managing the probate process. The executor ensures that your debts are paid, assets are distributed as you’ve directed, and all legal formalities are observed.

While seemingly comprehensive, a simple will is best suited for estates that are not overly complex. If you own a business, have a substantial estate that might be subject to significant taxes, or possess intricate financial arrangements, a simple will may not be sufficient. In such cases, other, more specialized types of wills or estate planning tools might be more appropriate to address the nuances of your financial situation and minimize potential tax burdens.

There are also specific situations where relying solely on a simple will might not be the most effective strategy. For instance, if your intention is to leave land to your children or other family members, or if you have children from a previous marriage, a simple will might not adequately address the complexities of these arrangements. 

Similarly, if you need to establish a special needs trust for a beneficiary with a disability to ensure they can receive financial support without jeopardizing their public assistance eligibility, a simple will won’t suffice. 

Lastly, if you have any reason to believe that your will might be challenged by an estranged family member or another party, a simple will may not offer the robust legal protections needed. In any of these situations, seeking the guidance of a reputable estate planning attorney is highly recommended to determine the best type of will and overall estate plan for your unique circumstances.

Testamentary Trust Will: Conditional Bequests and Beneficiary Protection

A testamentary will introduces an element of conditional giving through the creation of a trust. Unlike a simple will, which directly distributes assets, a testamentary will establishes a trust into which certain assets are placed for the benefit of named individuals. A designated trustee is then responsible for managing this trust on your behalf after your passing. This option is particularly valuable if you have beneficiaries who are minors or individuals you prefer not to have direct, immediate control over a large inheritance.

The power of a testamentary will lies in its ability to place conditions on how your beneficiaries receive their assets. For example, you can stipulate that a certain amount of money or a particular asset becomes available only when a child graduates from college, reaches a specific age, or gets married. This allows for a more controlled and responsible distribution of wealth, aligning the inheritance with specific life milestones or needs. It provides a layer of protection, ensuring that assets are used wisely and for their intended purpose, especially for younger or less financially experienced beneficiaries.

Living Will: Your Healthcare Directives

While often discussed alongside other types of wills, a living will isn’t a document that dictates the distribution of your assets. Instead, it serves as a crucial statement of your last wishes regarding your medical care and end-of-life decisions. This legally binding document outlines your preferences for medical treatment, including whether or not you wish for life-saving measures to be employed in specific circumstances. For instance, you can specify whether you would want to be kept alive via machines if you were to enter a vegetative state or if you would prefer to be taken off life support.

The primary benefit of having a living will in place is that it alleviates the immense burden of making difficult healthcare decisions from your family during an emotionally challenging time. It ensures that your medical wishes are honored, providing clarity and peace of mind to both you and your loved ones. To guarantee that your medical-related wishes are respected and followed, establishing a living will is an essential component of comprehensive estate planning.

Holographic Wills: The Handwritten Exception

Holographic wills are often misunderstood, conjuring images of futuristic, floating documents. In reality, a holographic will is a will that is entirely written in your own handwriting. What distinguishes them from other wills is that the typical requirements for witnesses and notarization are often less stringent or even waived in jurisdictions that recognize them.

However, the main drawback of holographic wills lies in their potential for ambiguity. Because they are often written without the guidance of legal professionals, the language used can be open to different interpretations. This can lead to significant problems and disputes among your beneficiaries, as one individual might interpret your wishes in one way, while another may have a completely different understanding. This lack of clarity can result in prolonged legal battles and family discord, making them a less desirable option for most people.

Joint Wills: The Shared Estate Plan

Joint wills are typically created by a husband and wife, outlining their shared wishes for the disposition of their assets. A common arrangement is for one spouse to agree to leave their entire estate to the other in the event of their passing. Historically, joint wills were a more common choice due to their perceived efficiency in saving time and money in the estate planning process.

However, times have changed, and the limitations of joint wills have become more apparent. A significant restriction of a joint will is that the surviving spouse generally cannot alter the will without the permission of the deceased spouse’s estate or, in some cases, without the consent of the beneficiaries named in the joint will. 

This inflexibility can create considerable challenges, particularly if the surviving spouse remarries. For example, assets held within a joint will cannot easily be transferred or bequeathed to stepchildren from a new relationship, limiting the surviving spouse’s ability to adapt their estate plan to new family dynamics. For these reasons, joint wills are far less common today, with most couples opting for individual wills or other estate planning strategies that offer greater flexibility.

Oral Wills: The Spoken Word

As the name implies, oral wills are wills that are spoken verbally to one or more witnesses. While they might seem convenient, most states do not legally recognize these types of wills. The primary reason for this lack of recognition is their inherent lack of concrete evidence and the difficulty in accurately deciphering and verifying the testator’s true intentions. Without a written record, there is significant room for misinterpretation, forgetfulness, or even fraudulent claims.

Generally, oral wills are only considered acceptable in very limited and extraordinary circumstances, such as when a person is on their deathbed and facing imminent demise, and there is no opportunity to create a written will. Even in these rare situations, strict legal requirements typically apply, and proving the validity of an oral will can be an arduous process, often leading to challenges and disputes among potential beneficiaries.

Wills vs. Trusts: Understanding the Differences

Both wills and trusts are invaluable tools in estate planning, designed to manage and distribute your assets. However, they operate under different principles and offer distinct advantages. The fundamental difference lies in their timing and how they function. Wills only become effective upon your passing. They are essentially a set of instructions for the probate court to follow in distributing your assets after your death.

Trusts, on the other hand, can be effective during your lifetime or become effective upon your passing, depending on the type of trust created. A trust involves transferring ownership of assets to a trustee, who then manages those assets for the benefit of designated beneficiaries according to the terms of the trust agreement. This allows for greater control over asset distribution, potential avoidance of probate, and can offer privacy that a will does not. While both are set up while you are alive, a will’s power only truly kicks in after your death, whereas a trust can provide ongoing management and protection of assets both during your life and beyond.

Different Types of Trusts: Beyond the Basics

Just as there are various types of wills, a diverse range of trusts exists to cater to specific estate planning needs. Each type of trust offers unique benefits and serves different purposes. For instance, an irrevocable trust is a powerful tool for protecting your assets from creditors and can also offer significant tax advantages. 

With an irrevocable trust, once you transfer assets into it, you generally give up your ownership rights to those assets. A named trustee manages these types of trusts, ensuring they are administered according to your instructions and for the benefit of your beneficiaries. This loss of direct control is often balanced by the asset protection and tax benefits it provides.

Special Needs Trust: Protecting Vulnerable Beneficiaries

As mentioned earlier, a simple will is not suitable if you need to establish a special needs trust. If you are concerned about the financial well-being of a beneficiary with a disability, a special needs trust is an indispensable legal arrangement. These trusts are specifically designed to enable your beneficiaries to receive financial support from the trust without jeopardizing their eligibility for state or federal public assistance programs, such as Supplemental Security Income (SSI) or Medicaid.

Without a properly structured special needs trust, an inheritance could be considered an asset by government agencies, making the beneficiary ineligible for crucial public benefits. This could leave your loved one without the essential financial assistance they rely on for medical care, housing, and other necessities. 

Therefore, if you have a beneficiary with special needs, it is absolutely critical to contact a reputable estate planning attorney to ensure the trust is meticulously drafted to comply with all relevant laws and regulations, safeguarding your loved one’s access to vital governmental support. The complexity of these trusts necessitates expert legal guidance to avoid inadvertently disqualifying a loved one from essential benefits.

Will vs. Trust

Trusts and wills are both excellent tools used for estate planning, but one only works during a significant life event, whereas you can use the other while alive. Wills and trusts are both set up while you are alive, but wills only kick into effect when you pass away. A trust can be used during your life or go into effect when you pass away.

Different Types of Trusts

Just like there are several different types of wills available for you to use, there are other trusts that you can use. For example, you can use an irrevocable trust to protect your assets from creditors. With an irrevocable trust, you give up your ownership rights to assets when you transfer them. A trustee manages these types of trusts.

Special Needs Trust

As mentioned earlier, if you need a special needs trust, you won’t be able to list your wishes in a simple will. If you are concerned about the financial need of a beneficiary with a disability, you can create a special needs trust.

These legal arrangements enable your beneficiaries to receive financial support from the trust without jeopardizing their state or federal public assistance program eligibility. You should contact a reputable estate planning attorney if you need a special needs trust. The last thing you need is for your loved one to lose access to supplemental security income or other federal benefits because the trust affects their income.

What Happens if You Die without a Will?

If you die without a will, the distribution of your assets and property must go through probate. The state handles this process. In general, the court must declare someone as the executor of your estate before they can handle sorting through your debts and assets.

In general, the court allows a portion of your estate to go to your surviving spouse, and they will divide the remaining assets amongst your children if you have any. The court does not take in any factors that may influence it to divide the assets unequally. For example, if you don’t want one child to receive something, the court won’t know that. They will treat all your heirs as equals.

So if you have specific assets that you wish to go to one particular person, you should create a will. This will lessen the burden that your family has to go through with probate court. Depending on the size of your estate, it could take months, if not years, for the probate process to complete.

How to Create a Will or a Trust

If you wish to create a will or a trust, you can do so without the need of an attorney, but that is not recommended. There are specific tax considerations and laws that you must keep in mind when creating these types of documents.

The last thing you want is to create a will online that does not have the proper protection or clear intentions. When you pass away, if the will is not direct on your last wishes, your beneficiaries are left to try to interpret your wishes.

Estate Planning Attorney

If you want to ensure your last wishes are honored and well understood, it would be best if you reached out to an attorney to create the document on your behalf. You may be tempted to pay the small fee online to file your paperwork, but if there are any discrepancies or mistakes made, it will cause problems down the road. Partnering with an estate planning attorney will ensure you have honored all your last wishes.

Help with Different Types of Wills

Making sure that your last wishes are honored is a big deal to your family, so it is best that you get a will that clearly states what you want to happen you pass away.

Whether you need help creating your living will or a simple will, reputable attorneys can help you navigate the different types of wills. If you are ready to create your will or you have questions about what option is best for you and your situation, contact us.

What’s on a Real Estate Closing Statement?

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Home sales in 2021 increased by 8.5 percent from 2020.

Each time someone buys a home, they work through many steps before closing on it. A few days before closing on a house purchase, the buyer and seller receive a real estate closing statement.

What is this statement, and what information can you find on it?

Here is a guide to help you know what a real estate closing statement is, how to read it, and the information you’ll find on it.

Understanding Your South Carolina Real Estate Closing Statement

A real estate transaction, particularly the final act known as “closing” or “settlement,” is a complex culmination of agreements, negotiations, and financial transfers. At the heart of this intricate process in South Carolina lies the real estate closing statement – a pivotal document that distills all financial activity into a digestible summary for both buyer and seller. Far more than just a receipt, it serves as the official financial reconciliation of the entire deal, providing transparency and clarity regarding every dollar spent and received.

The Essence of the Closing Statement

Fundamentally, a real estate closing statement in South Carolina is a detailed accounting of all monies involved in the property transfer. It enumerates every cost, credit, and adjustment pertaining to the transaction, ensuring that both parties fully understand their financial obligations and benefits. Its primary function is to arrive at the precise “bottom line” – the exact amount the buyer must bring to the closing table and the exact net proceeds the seller will walk away with.

In South Carolina, it’s common for the closing firm, typically a law firm due to the state’s “attorney closing” requirement, to prepare this document. Depending on their internal practices or the complexity of the transaction, they may opt for a single, consolidated statement that outlines the finances for both buyer and seller side-by-side. 

Alternatively, they might generate two distinct statements: one specifically itemizing the buyer’s debits and credits, and another exclusively for the seller’s financial breakdown. Regardless of the format, the purpose remains identical: to provide a comprehensive and accurate record of financial flow. Reviewing this statement diligently is crucial, as it provides each party with a clear, line-by-line understanding of how their final financial obligations or receipts were calculated.

The concluding section of the statement is arguably the most anticipated part for both parties. For the buyer, it reveals the precise sum of funds they need to provide to finalize the purchase. For the seller, it specifies the exact amount of money they will receive from the sale after all expenses and payoffs are accounted for. This clear finality is what makes the closing statement such an indispensable document.

Decoding the Information: What You’ll Find on a Closing Statement

A typical real estate closing statement, while dense with figures and line items, is meticulously organized to categorize the various financial components. Let’s break down the main categories you’ll encounter:

The Costs for the Buyer: Debits and Deductions

The buyer’s section of the closing statement—or their dedicated statement—will meticulously detail every expense they incur in acquiring the home. While the most substantial cost is, naturally, the agreed-upon purchase price of the property, numerous other associated fees and charges contribute to the overall expenditure. These are typically listed as “debits,” indicating money owed by the buyer.

  1. The Agreed-Upon Selling Price: This is the foundational debit, representing the negotiated cost of the property itself.
  2. Lender Charges (Loan Origination Fees): If the buyer is financing the purchase, the lender will levy various fees for processing and underwriting the loan. These can include:
    • Loan Origination Fee: A percentage of the loan amount, charged by the lender for processing the mortgage application.
    • Discount Points: Fees paid upfront to the lender in exchange for a lower interest rate.
    • Underwriting Fee: Covers the cost of evaluating the loan application and borrower’s creditworthiness.
    • Processing Fee: For the administrative work involved in handling the loan.
    • Appraisal Fee: Paid to an independent appraiser to determine the property’s market value.
    • Credit Report Fee: For obtaining the buyer’s credit history.
    • Flood Certification Fee: To determine if the property is in a flood zone.
    • Tax Service Fee: Paid to a third-party service that monitors property tax payments to ensure they are current.
  3. Prepaid Items & Escrow Setup: These are expenses the buyer pays at closing that cover periods after closing or are set aside for future recurring costs.
    • Prepaid Interest: Interest on the new loan from the closing date to the end of the month.
    • Property Taxes (Initial Escrow Deposit): Lenders often require an initial deposit into an escrow account to cover future property tax payments. This ensures funds are available when taxes are due.
    • Homeowner’s Insurance Premium: The first year’s premium is typically paid in full at closing, and an initial escrow deposit for future premiums is also common.
    • Mortgage Insurance (PMI/MIP): If applicable, a portion of the premium may be due at closing, along with an initial escrow deposit.
  4. Third-Party Service Fees: These are charges for services essential to the transaction but not directly related to the lender or seller.
    • Home Inspection Fees: For a professional assessment of the property’s condition.
    • Pest Inspection Fee: To check for termites or other wood-destroying organisms.
    • Survey Fee: If a new property survey is required to verify boundary lines.
  5. Title-Related Fees: In South Carolina, these fees are particularly prominent due to the attorney-led closing process.
    • Title Insurance Premiums: Often comprising two parts:
      • Lender’s Title Insurance: Protects the lender’s interest in the property.
      • Owner’s Title Insurance: Protects the buyer against defects in the title (highly recommended).
    • Title Search/Examination Fee: For researching the property’s history to ensure a clear title.
    • Closing/Settlement Fee (Attorney Fees): Paid to the closing attorney for coordinating the closing, preparing documents, and facilitating the transfer of funds. This is a significant cost in SC.
    • Recording Fees: Paid to the county to officially record the deed and mortgage.
  6. Prorations (Buyer’s Share): While often a credit for taxes, if the buyer is taking over something prepaid by the seller (less common), they might have a small debit. For example, if the seller already paid HOA dues for the month of closing, the buyer would owe the seller for their portion.

The Credits for the Buyer: Reducing the Out-of-Pocket Expense

Just as the buyer has costs, they also receive “credits” that reduce the total amount of money they need to bring to closing. These are funds or adjustments that work in the buyer’s favor.

  1. Earnest Money Deposit: This is the initial deposit the buyer made to show their serious intent to purchase the home. It’s held in an escrow account and then applied as a credit towards the purchase price at closing.
  2. Down Payment: The significant portion of the purchase price that the buyer pays upfront, reducing the amount of the mortgage loan. This is a direct credit against the purchase price.
  3. Loan Proceeds: The actual amount of money the lender is providing for the mortgage. This is a major credit that offsets the purchase price and other costs.
  4. Prorated Property Taxes: This is a common and often substantial credit for the buyer. Property taxes are typically paid in arrears or for a specific tax year. If the seller has occupied the home for a portion of the current tax period, they are responsible for their share of the taxes up to the closing date. The buyer receives a credit for this amount, effectively reducing their closing costs, as they will be responsible for paying the full tax bill when it comes due.
  5. Seller Concessions/Credits: Sometimes, as part of the negotiation, the seller agrees to pay a portion of the buyer’s closing costs or provide a credit for repairs. These negotiated amounts will appear as credits on the buyer’s statement.
  6. Prorated HOA Dues/Other Dues: Similar to property taxes, if the seller has prepaid homeowner’s association dues beyond the closing date, the buyer will receive a credit for the unused portion.

The Costs for the Seller: Expenses of Selling

The seller’s side of the statement, while typically less extensive in terms of individual line items compared to the buyer’s, still outlines several significant expenses that reduce their net proceeds from the sale. These are also listed as debits.

  1. Mortgage Payoff: This is often the largest single debit for the seller. If they have an existing mortgage on the property, the outstanding balance, including any interest accrued up to the closing date and potentially a prepayment penalty (though less common now), must be paid off at closing. This amount directly reduces the funds the seller receives.
  2. Real Estate Commissions: The commissions paid to the real estate agents (both the seller’s agent and the buyer’s agent) are a primary expense for the seller. This is usually a percentage of the final sales price and can be a substantial sum. The commission is typically split between the two brokerages involved.
  3. Prorated Property Taxes: From the seller’s perspective, they are debited for the property taxes owed for the period they owned the home up to the closing date. This is the flip side of the buyer’s credit for prorated taxes.
  4. Transfer Taxes/Deed Stamps: In South Carolina, there is a deed recording fee (often referred to as deed stamps) that is usually the seller’s responsibility. This is calculated based on the sales price.
  5. Attorney Fees (Seller’s Portion): The seller will incur legal fees for the attorney preparing the deed, handling the payoff, and overseeing their side of the closing.
  6. Title Insurance (Seller’s Responsibility): While the buyer often pays for the lender’s and owner’s title insurance, the seller might be responsible for clearing previous title issues or providing certain title-related documents.
  7. HOA Fees/Other Dues (Prorated): The seller is responsible for their share of any homeowner’s association dues, special assessments, or other recurring charges up to the closing date.
  8. Seller Concessions: Any closing costs or repair credits that the seller agreed to pay on behalf of the buyer will appear as debits on the seller’s statement.
  9. Home Warranty: If the seller agreed to purchase a home warranty for the buyer as part of the deal, the cost of this warranty will be debited from the seller’s proceeds.
  10. Lien Payoffs: If there are any outstanding liens on the property (e.g., judgments, mechanic’s liens), these must be paid off at closing and will appear as debits.

The Credits for the Seller: Funds Received

The seller’s credits typically simplify to one primary source, though others can occasionally appear.

  1. The Home’s Sales Price: This is the most significant credit for the seller, representing the total amount for which the property was sold. This is the starting point from which all seller costs are subtracted.
  2. Prorated Prepaids (Less Common): In rare instances, if the seller had significantly prepaid certain expenses (like a full year of HOA dues) that extend far beyond the closing date, they might receive a small credit back from the buyer for the unused portion.

The Bottom Line: Final Figures and Financial Exchange

The “bottom line” is the summation of all the financial machinations detailed above, providing the ultimate figures for the actual money exchange at closing.

For the buyer, the closing statement’s final calculation involves adding up all the debits (costs) and then subtracting all the credits. The resulting figure is the precise amount of money the buyer must bring to the closing appointment. 

This amount typically needs to be in the form of a cashier’s check or a wire transfer, as personal checks are rarely accepted for such large sums to ensure funds are immediately available. The closing attorney’s office will provide detailed instructions on the acceptable payment methods and amounts well in advance.

For the seller, the calculation is essentially the reverse. The closing firm adds up all the credits the seller receives (primarily the sales price) and then subtracts all the seller’s associated costs and payoffs. The final number represents the net proceeds the seller will receive from the sale. This amount is usually disbursed to the seller via a direct wire transfer to their bank account or a check issued by the closing attorney’s office immediately after the closing is completed and all documents are recorded.

Therefore, the real estate closing statement serves as the definitive financial ledger for the transaction. It clearly illustrates to the buyer how much they need to contribute to complete the purchase, and it transparently shows the seller precisely how much they will gain after all their obligations and expenses are settled. 

Its accuracy and the detailed breakdown it provide are crucial for a smooth and legally sound transfer of property ownership in South Carolina. Buyers and sellers are strongly advised to review this document carefully, ideally with their real estate agent or attorney, prior to the closing date to clarify any questions and ensure all figures align with their understanding and agreements.

A Real Estate Closing Statement Is A Summary

The best way to explain a real estate closing statement is to know that it summarizes the financial details of a real estate deal.

In some cases, the firm handling the closing creates one statement that includes the information for the buyer and seller.

In other cases, they create two statements: one for the buyer’s information and the other for the seller’s information.

The closing statement summarizes all the money coming and going for the buyer and seller, and each party can read through it to see the transaction details.

The bottom of the statement shows the final amounts for the buyer and seller. It shows how much money the seller receives at closing and the amount of money the buyer must bring to the closing.

The Importance Of Reading It Before Attending The Appointment

Whether you’re buying a house or selling one, hiring a real estate attorney is an essential step you shouldn’t forego. Your attorney handles the closing work for you and ensures its accuracy.

You should receive a copy of the closing statement a few days before the scheduled appointment. When you get it, you should read it through line by line.

All the documents you sign at the closing come from the information on this one document. So if you find errors, you shouldn’t close on the deal until they fix them.

If you find mistakes, fixing them before closing is much simpler than fixing them afterward.

For example, suppose the statement doesn’t include the earnest money you paid when you wrote the offer. If this happens, you’ll pay more for the house than you should, as your earnest money reduces the amount you need.

Use A Real Estate Lawyer For Assistance

Learning about a real estate closing statement can help you prepare for buying or selling a home. Then, when you hire a real estate lawyer for help, you’ll have the legal protection and assistance you need for the sale.

If you need a real estate lawyer in Greenville, SC, contact us at De Bruin Law Firm. We can help you with any type of real estate sale!

How Can a Real Estate Lawyer Help You?

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About 5.8 million houses sold in May 2021. That’s 44.6% up from May of last year! Whether you plan on buying or selling this year, there are many legal variables to consider first.

You don’t have to navigate these legal complexities alone. Instead, consider hiring an experienced real estate lawyer. You can rely on their experience and expertise throughout every step of the process.

What is a real estate attorney, exactly, and what do they do? When should you hire an attorney to help? Keep reading to find out!

After reading this guide, you can hire the best real estate lawyer to help you through your next transaction. Identifying the benefits of having a lawyer at your side will help you make a more informed choice.

Read on to learn everything you need to know before buying or selling a property today!

What is a Real Estate Attorney?

First, let’s answer the question that likely brought you here: what is a real estate attorney?

A real estate lawyer can help guide you through the legal process of buying or selling property. They can negotiate the transaction and handle any disputes that occur.

Some states even require you to have a real estate attorney present during the closing process. Even if you live in a state that doesn’t require one, you might want to consider it. After all, a lawyer will have your best interests in mind every step of the way.

They can prepare and review any legal documents or paperwork in advance. They can also advise you if there are any problems or omissions in the documents. Otherwise, you might not realize there’s a problem until after the fact.

Real estate law is a matter for local and state jurisdictions. Make sure to hire an attorney with experience in the area.

You can rely on their experience and expertise to make more informed decisions before buying or selling property.

Real estate law covers selling, buying, or legal issues related to real property.

Make sure to find a lawyer who specializes in real estate transactions. They’ll understand the proper procedures you’ll need to follow. For example, you might want to ask them about:

  • Zoning
  • Titles
  • Estate planning
  • Deeds
  • Property taxes

These laws can vary by local or state government. Make sure to choose a lawyer licensed to practice in the state where the transaction is taking place.

Why Hire a Lawyer?

Remember, you’re required to hire a lawyer in some states. Your lawyer can help prepare or review documents before a transaction takes place. These documents can include:

  • Purchase agreements
  • Title documents
  • Transfer documents
  • Mortgage documents

They’ll also attend the closing (when money is paid and the title is transferred). They’ll make sure the transfer is legal and binding.

You might want to hire a lawyer to ensure the necessary documents are in order. They can also write insurance policies as needed. Otherwise, you might want to hire them to handle the transfer of funds for the purchase.

If you’re financing the purchase, talk to your real estate attorney about the federal HUD-1 Form. Discuss any related transfer of funds documentation for the lender, too.

Appeal to State or Lender Requirements

If you’re buying a home in certain states, you’re required to retain a real estate attorney. These states include:

  • Connecticut
  • Delaware
  • Georgia
  • Massachusetts
  • New York
  • North Carolina
  • South Carolina
  • West Virginia

State law will require you to retain a lawyer for specific parts of the transaction.

Some states require you to have an attorney to provide a title opinion. These states include:

  • Alabama
  • Louisiana
  • Mississippi
  • North Dakota
  • South Dakota

An opinion shows a lawyer reviewed the title abstract or examination. The document indicates they didn’t see any obstacles to the transaction.

Remember, you still might want to hire an attorney even if the state doesn’t require one. They can help if you’re dealing with a tricker type of purchase. They can also assist if there’s an issue regarding property lines.

Some mortgage lenders also require you to hire an attorney as part of the transaction.

Avoid Contractual Issues

Only 5% of all buyers choose to purchase a home directly from the owner. Before going this route, you might want to hire an attorney. Otherwise, you might encounter contractual issues and disagreements.

For example, you might encounter disputes related to:

  • The chain of title
  • Lot line problems
  • Other contract issues

Consider hiring a real estate lawyer if the purchase involves any out-of-the-ordinary elements. Otherwise, these elements might complicate the purchase contract.

An experienced lawyer will take the complexity of your situation into account. If any contractual issues arise, they’ll know how to respond.

Your attorney can help resolve the problem. For example, they can provide legal representation if a dispute ends up in a courtroom.

Your lawyer will gather information from both parties and try to encourage a resolution. They might hire a surveyor or title company to gather additional evidence, too.

Peace of Mind

You never know when something could go wrong. With that in mind, consider hiring an attorney before there’s an issue. Having a lawyer at your side will ensure your bases are covered.

They can provide peace of mind before a transaction goes awry. They’ll also consider your best interests every step of the way.

How to Find a Real Estate Attorney

To find the best real estate lawyer in town, turn to friends, family members, and neighbors. Start developing a list of referrals. Visit your local bar association website online, too.

Look for a real estate attorney with years of local experience in the industry. Their prior experience will give you peace of mind. They’ll have the expertise and know-how necessary to offer the help you need.

Buy or Sell With Ease: Hire a Real Estate Lawyer Today

Buying or selling property doesn’t have to feel stressful. Instead, consider hiring a real estate lawyer. They’ll protect your best interests through every phase of the process.

With their help, you can complete the transaction without unnecessary hassle.

Need help right away? We’re here for you.

Schedule a consultation today to get started.

How Can an Estate Planning Lawyer Help You?

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As you get older, the importance of developing an estate plan increases dramatically. However, according to a recent survey, only 42% of Americans have a plan for their estate.

Looking ahead at end-of-life situations feels grim, but you need to have a plan for what you leave behind. Should you pass intestate, meaning without a will, the state will be in charge of distributing your assets.

This sort of planning involves a significant amount of legal paperwork, intimate knowledge of estate planning laws, and a sound strategy. For this, you need an estate planning lawyer to guide you through the complex process of preserving your legacy.

The Duties of an Estate Planning Lawyer

It should be obvious that estate planning lawyers are attorneys who specialize in estate planning. That means their chief responsibility is assisting you in your end-of-life preparations. They ensure that your loved ones receive the benefits you’ve decided to pass along.

Start your estate planning with an attorney as soon as you’re able. Your estate plan needs to account for so much more than the money you’re leaving to loved ones. It may include designating guardianship, determining what to do with a business you own, and making determinations on financial assets like stocks.

You need the help of an attorney to guide you through the plan-making process.

Develop a Will

Writing a will is a critical aspect of estate planning. While you can write one on your own, enlisting the help of a qualified estate planning attorney will make the process much easier.

An attorney builds a will that uses specific language, can help the will stand up to contestation, and ensures that your assets are distributed in the way that you desire.

Will writing can be complex, and it’s easy to make mistakes. Unfortunately, a minor oversight could put your entire estate in jeopardy.

Establish a Trust

While wills typically go into effect in the event of your passing, a trust can go into effect immediately. Another key difference is that a will must go through the probate process and become public record, while a trust remains private.

Your lawyer may determine that establishing a trust is a more appropriate measure.

With a trust, you’ll name a trustee who will be responsible for distributing the assets named in the trust according to its outlined terms.

Assistance with Taxes

Inheritance and estate taxes can quickly drain any funds you pass along to your family members. This may leave them without the financial support you planned to provide for them.

An estate planning lawyer will work with you and your loved ones to navigate these complicated tax laws and help you minimize the tax liabilities associated with estate planning.

Powers of Attorney

Should you become incapacitated and unable to make decisions on your own, a lawyer can help establish powers of attorney so a loved one can act on your behalf. This is especially important if you’re someone’s primary caregiver, as you need to ensure that they’re provided for.

Situations When You Need an Estate Planning Attorney

In addition to their most common duties, an estate planning lawyer can aid you and your family members in a number of complex situations.

Updating Your Plan

Family dynamics are ever-changing, so you may deem it necessary to make changes to your end-of-life plan. Fortunately, a lawyer makes the process simple.

You may want to leave assets to a specific family member, add a new beneficiary like a grandchild or step-child, or exclude someone from your will.

Some members of your family may prove themselves too irresponsible to manage their inheritance. You may also need help navigating laws that prohibit non-immediate family members from receiving benefits.

Interstate or International Assets

Dealing with your state’s estate laws is complicated enough, but the process becomes even more difficult if you have assets in another state or another country. You’ll have to abide by the laws in those states and countries as well as the ones where you currently reside.

Without professional legal help in this situation, it’s almost impossible to ensure that your assets are protected and distributed in the manner you desire.

Succession for Your Business

If you’re an entrepreneur and own a small business or a stake in one, you need to ensure that your business doesn’t fall into the wrong hands when you pass. An attorney will help you determine your business’s succession plan and ensure that an appropriate individual takes the reins.

Protecting Your Will

Since wills go through the probate process, certain situations allow interested parties to contest the validity of your will. The responsibility of defending the will then falls to your named executor.

An experienced attorney can help ensure that your will is able to stand up to contestation. They can include a powerful no-contest clause that renders anyone who contests a will unable to receive benefits.

Establishing an Irrevocable Trust

While many estate plans allow you to modify them, an irrevocable trust cannot be changed. Due to the permanence of such a trust, it’s advised you consult with an attorney.

Irrevocable trusts have a few unique advantages and can certainly benefit your loved ones. They may help someone who depends on you for primary care retain their medical benefits, help a beneficiary who needs financial aid minimize costly estate taxes, and can protect your assets from debtors who come to collect from your estate.

An Estate Planning Lawyer Keeps Your Assets in Order

Planning your estate is a difficult thing to do, and it’s advised you start the process early. Consult with an estate planning lawyer so your beneficiaries don’t have to worry about what happens to your assets after your passing.

The best estate planning lawyers will help you develop a plan for your financial assets. They’ll determine if you need a will or trust. Finally, they can help you through all of the complex legal situations surrounding estate law.

Looking to hire a lawyer to help with your estate planning? The De Bruin Law Firm is ready to help. Schedule a consultation today.

10 Facts About Business Law Cases

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Lawsuits are the modern way of holding other people accountable through the court system. People can sue other people who have harmed them, as well as businesses who they believe are in the wrong. But what is business law, exactly?

Business law is any legal dealing between people in relation to commercial matters. A business could sue another business for copyright infringement. There could also be a disgruntled employee seeking financial restitution.

Here are ten business law cases that demonstrate how tricky and complicated legal proceedings can get.

1. Apple vs Samsung

In 2011, Apple filed a lawsuit against Samsung for copyright infringement. According to them, Samsung had stolen the design for its smartphones and tablets from Apple. This included aspects of its hardware and software, such as the layout of its home screen.

Ultimately, the United States Supreme Court decided in Apple’s favor, granting them $539 million. Despite the lawsuit, Samsung and Apple continue to push products that are similar to one another.

2. Florida Couple vs Bank of America

Banks losing lawsuits aren’t a completely strange occurrence. However, it is unordinary for them to completely ignore the outcome of a lawsuit.

In 2009, a Florida couple was wrongfully foreclosed on by Bank of America. They responded with a lawsuit that won them $2,500 in legal expenses. However, Bank of America decided not to pay the couple despite the judgment.

The couple, with the local sheriff in tow, showed up at a local branch of the bank and started possessing items. The bank was ultimately forced to give a check to settle the debt.

3. Sony vs Itself

Although two subsidiaries owned by the same company are supposed to work together, they can find themselves at odds.

In 2001, the Recording Industry Association of America decided to sue Launch.com. According to them, Launch.com wasn’t seeking proper licensing for its Internet radio service. Sony belonged to the trade association and was a part-owner of the Launch website at the time.

To an extent, this was one of the rare situations where a company was suing itself.

4. Oprah vs Farmers

Sometimes individuals find themselves on the wrong end of an entire industry. In 1996, Oprah Winfrey did a segment on the mad cow disease and how it was affecting the U.S. beef industry. By the end, she declared she would never eat another burger again.

Members of the Texas cattle industry filed a lawsuit together against Winfrey, alleging more than $10 million in damages due to what they claimed were libelous statements. Ultimately, the jury voted in Winfrey’s favor.

5. The North Face vs The South Butt

Business law cases are often fought over trademarks. One Missouri teenager found himself at odds with The North Face Apparel Corp. over his own parody company called The South Butt.

The name, logo, and tagline were all parodies of The North Face’s original ones. However, the teenager’s company capitalized on its association with the larger company. The lawsuit resulted in a settlement that prohibited The South Butt from continuing its business.

6. Carl Sagan vs Apple

Famous astronomer Carl Sagan once sued Apple over his name used as a codename in the 90s. Originally, he requested they change the name via a letter. They refused and changed it to BHA, which was short for Butt-Head Astronomer.

Sagan sued for libel, but he lost his case. They would eventually come to an out-of-court agreement with Apple making a statement of apology.

7. Hlatky vs Steward Health Care System, Inc.

Contracts in business law are one of the most important aspects. They decide whether or not there’s even a case to be fought.

In the case of Hlatky v. Steward Health Care System, the Supreme Judicial Court found the Defendant had committed a breach of contract. Hlatky was a cancer researcher whose research lab was driven into bankruptcy when support was withdrawn by Steward.

The following lawsuit ended with the plaintiff winning $10.2 million for damages to an asset she didn’t own.

8. Marriott Data Breach

In late 2018, the Mariott hotel chain was breached. Their reservation systems had hundreds of millions of customer records that were now taken by attackers.

A class action was taken against them alleging several violations. The plaintiff was one of its members that was made vulnerable by the breach. Mariott won the lawsuit due to the fact that no sensitive information was compromised.

9. Facebook Facial Recognition

Privacy and its related permission are some of the most important contracts in business law. If a user doesn’t approve of sharing information, then it can’t be used.

Facebook’s photo-tagging feature was innocuous at first. However, it used facial recognition technology to associate people in photos with their accounts.

The lawsuit against Facebook alleged that these scans were created without user consent and violated Illinois law. Its final settlement was $650 million and one of the largest settlements for a privacy violation.

10. Scarlett Johansson vs Disney+

One example of an online business law case is that of Scarlett Johansson against the online streaming platform, Disney+.

Since movie theaters were closed during the pandemic, Disney decided to upload many of its movies directly to its streaming platforms. Although Black Widow was one of the first films to screen in theaters once more, it was also added to the streaming platform for subscribers.

According to Johansson, that decision violated her contract. It could also potentially cost her more than $50 million.

The two parties reached a settlement in September 2021. The actual terms of the settlement were not made public.

Managing Business Law Cases

As much as you’d like to avoid business law cases, they’re a natural part of owning a business. Unfortunately, any public individual or business is at risk of a lawsuit for one reason or another. You may also find that you need to rely on the legal system to hold another company accountable.

When that happens, reach out to De Bruin Law Firm for help. Our office is located in Greenville, South Carolina, and we specialize in business law, criminal defense, estate planning, and real estate.

Contact us today to schedule a consultation.

Everything You Should Know About Real Estate Law

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It’s no secret that real estate properties are among the most valuable assets. Did you know that the country’s real estate market size is expected to rise by 0.4 percent in 2021?

When done right, purchasing and selling property can be a lucrative investment. You need expert guidance when making such a life-altering financial decision.

Real estate transactions should follow various regulations and principles for them to succeed. Therefore, you should understand real estate law to improve your experience when buying or selling property.

But what exactly does the real estate law entail, and what role does it play in real estate transactions? Find out more in this detailed guide:

What Exactly is Real Estate Law?

Real estate law typically governs the acquisition and use of property. The law also oversees the buying, selling, and usage of land. Its common aspects include estate planning, taxes, zoning, purchase financing, titles, and deeds.

There are various stipulations under the real estate law on the right to own and use property. These stipulations directly or indirectly cover home sellers/buyers, landlords, renters, and homeowners.

Other law domains such as contract law, inheritance law, and family law relate to real estate law. Contract law, to be precise, requires parties to seal their transactions in writing. Special family law provisions such as spousal rights in homeownership also apply to real estate law.

Federal Real Estate Laws

Four major federal laws in the US govern all types of real estate transactions. They include the Real Estate Settlement Procedures Acts (of 2011) and the Truth in Lending Act (of 1974).

These laws mandate property sellers to be transparent about their interest rates. They also give buyers a right to discard loans and lay guidelines on solving disputes brought by mortgage rates.

Dodd-Frank Wall Street Reform and Consumer Protection Act (of 2010) covers the rights of borrowers. It allows you to sue your lender if their unfair acts subjected you to huge monetary losses. This law also protects you from fine print and hidden fees charged by lenders.

Under the Fair Housing Act of 1968, you shouldn’t be discriminated against when selling or buying property. This legal framework covers discrimination against consumers’ disability, familial status, and sex. It also prohibits discrimination against religion, nationality, gender, and race.

Does Real estate Law Qualify as State Law?

Every state in the US has its laws surrounding real estate practices, procedures, and licensing. These laws tend to change due to court decrees or legislative actions. You should keep tabs on them for you to understand your rights in any real estate transaction.

Find out about the agency regulations that govern client-agent relationships in your state. Learn more about agency disclosure, buyer agency agreements, listing agreements, and dual agency. You should also check the stipulations on transactional and facilitating brokerage.

US states have different licensing laws and procedures on real estate transactions. Learn more about the fees and minimum requirements before investing in real estate.

Your local state government may have laws on land-use restrictions. Find out the board/agency that grants zoning ordinance variations and the time limits for the same.

Every state has its real estate laws on ownership rights, theories, and forms. Check whether your state recognizes liens or title for ownership. You should also find out the requirements for married couples and other special categories of buyers.

Real estate law also covers property disclosure, rent control and rights, and ownership transfer. Each segment comprises regulations that are unique to your state.

Real Estate Law in Property Transactions

A typical real estate transaction involves a broker (representing the seller), a seller, a buyer, and an attorney. The seller and broker must seal their relationship in a contract known as a listing agreement. In this type of contract, the broker may earn a certain commission if they find a suitable buyer.

An exclusive arrangement gives the broker the right to compensation even if a buyer is found without their help. The broker/salesperson must have obtained a license from the relevant state licensing agency for the transaction to be legal.

Contract law governs agreements between buyers and sellers. The agreements must be sealed in writing, while the seller should give proof of the title.

The buyer may hire a real estate attorney or a title insurance company to investigate the title’s marketability. They may also seek coverage from the insurance company for the title against losses if the title is invalid.

Real estate transactions end with the seller handing out a deed to the new buyer. A deed provides ownership transfer notice or establishes property ownership.

Real Estate Law and Lawyers

Real estate attorneys help in documenting and reviewing contracts and transactions. You’ll also need them when examining titles, insurance policies, and sale contracts.

With an attorney’s help, you’ll negotiate a contract that protects your right. The legal counsel can also revise or adjust it to fit your unique needs.

Your real estate lawyer can arrange for title insurance for your property. This policy covers any problems that occur before or after you purchased an asset.

You can count on an experienced attorney to protect your interests in a real estate transaction. They may work with brokers, developers, or other lawyers to get you a legally sound deal.

Handling foreclosure proceedings can be difficult without expert legal help. You may need this help when facing a lender that wants to recover a defaulted loan by selling or obtaining ownership of your property.

Some real estate transactions involve unpleasant legal situations that require legal representation. A real estate lawyer will expertly advise you on zoning violations, property management, and property taxes. You may count on them to reach a settlement agreement.

Hire a Real Estate Attorney Today

With these basics of real estate law, you can decide how you’d like to benefit from legal help. To get the most out of a property transaction or negotiation, you need to know your rights. Use this information when carrying out any real estate transaction.

Do you need legal help navigating the complex real estate market? Our real estate lawyers are more than willing to listen and handle your situation. We’ll respond within one business day once you submit your query.

How to Create Rock Solid Business Contracts

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Business is done with contracts. Getting yours right is critical. Getting them wrong can be costly.

No matter what kind of business you run, well-written contracts protect your interests. Good contracts keep things running smoothly.

Would your contracts withstand court scrutiny?

Understanding how to write contracts that work can help you ensure yours will hold up if disputed. So, here are the basic dos and don’ts of writing solid business contracts.

Writing Solid Business Contracts

You, your clients, and your vendors should be able to rely on the efficacy of your business agreements. To ensure your business contracts are reliable and legally enforceable, here are some basic “do’s.”

Keep It Simple, But Specific

We’ve all seen contracts loaded with complex legal terminology. All the “heretofores” and “thereunders” make it difficult, if not impossible, for a layperson to understand.

Using flowery language in an effort to sound smarter can backfire. If your clients can’t understand what the contract says, they may choose not to sign and to do business with your competition instead.

Be as specific as possible to avoid misunderstandings. Only use legalese if it serves to make the contract terms more precise or clear.

A Handshake Doesn’t Protect You

Under South Carolina law, certain contracts must be in writing. Agreements involving wills or trusts and contracts in the realm of real estate law must be written to be enforcible.

Although some simple contracts can be oral agreements, it’s difficult to enforce them should there be a dispute. Well-written contracts help prevent misunderstandings.

Be As Specific As Possible

Vague business contracts serve no one. The more specific your contracts are, the less room you leave for misunderstanding. Include as much detail as possible. Use precise terms.

Specify all payment terms and delivery or service dates and deadlines in detail. State clearly who is paying what to whom, and when they must make payment.

Likewise, describe in detail the service, product, or item that is being purchased. Include when and how the service will be performed, or the customer will receive their purchase.

Don’t leave anything open for interpretation or misinterpretation.

Correctly Identify All Parties

Like all legal agreements, business contracts must be clear about who is obligated to provide the goods or services to whom. It must also be clear who will pay for those goods or services.

So, you must use the correct legal names of the parties to the contract. If you are doing business with another business, use the full name of that business (including any Inc. or LLC) in the contract.

Don’t use the names of the people signing the contract. They aren’t responsible for fulfilling the obligation. Their company is.

Capacity and Duress

A legal contract requires that anyone signing it must have the mental capacity to do so. That means they must be free from mental incapacity and sober. Otherwise, the agreement isn’t enforceable.

Likewise, everyone signing a contract must be doing so of their own free will. Financial or emotional coercion nullifies the deal.

Contract Termination and Dispute Resolution

Sometimes the terms of a contract can’t be met by one party. Sometimes the deal can’t proceed because of, or the deal is halted by an outside influence. So, it makes sense to include circumstances under which the contract can be terminated.

Include a section that states specifically what you and the other party can and will do if you disagree about the contract’s terms. Will both parties agree to go to mediation or arbitration before taking the dispute to court? Write it into the contract.

Say Which State’s Laws Govern the Contract

If you’re doing business in South Carolina, your contract will be governed by South Carolina’s laws. Specify that in your business contracts. This is especially important if you do business with clients or vendors in other states or countries.

You may also choose to specify where you will mediate, arbitrate, or bring a legal action under the contract should a dispute arise.

Contract Mistakes to Avoid

Just as there are certain details that you should do for every contract, there are other things you should never do. These not only weaken business contracts; they can also cost you.

Using Ready-Made Contract Templates

There’s no denying document templates have made many business functions easier. But when it comes to business contracts, ready-made templates are risky.

Your business is as individual as you are. You have your own business practices, methods, and goals. The one-size-fits-all contract template doesn’t account for all the details that make your business unique. Consequently, it may not protect your interests if a dispute arises.

Promising the Moon

It should go without saying that you should never promise more than you can deliver. You also shouldn’t agree to pay more than you can realistically afford.

You should be certain you can honor the terms of your business contracts before signing them. That includes clearly defining the scope of all obligations and any applicable deadlines. Then stick to the contract terms.

Negotiating with Subordinates

If the person you are negotiating with doesn’t have the authority to sign the agreement, you’re speaking with the wrong person. Don’t waste your time negotiating with a subordinate.

You should insist on negotiating with the person who has the authority to sign the contract. Often that is the owner, president, or chief executive officer.

Business contracts signed on behalf of a corporation by someone who doesn’t have enough authority to make the agreement can’t be enforced. Protect your interests by negotiating with the right person.

Skipping the Lawyer to Save Money

It may be tempting to try to write your business contracts yourself. But that could be a costly mistake. To adequately prepare business contracts, you must fully understand the legal and regulatory environment of your industry and location.

Remember, lawyers must know the precise meaning of the sometimes obtuse legal terms that pepper many business contracts. If you don’t understand the legalese, an attorney specializing in business law can explain it to you and ensure that the contract works for you.

Safeguarding Your Business Interests

When it comes to protecting your business interests, you can never be too careful. No matter how thoroughly you’ve reviewed your business contracts, it’s a good idea to have your lawyer review them.

Our contract specialists are here to help ensure your agreements work for your business. We can help with business contracts, trademarks, mergers and acquisitions, business formation, real estate law, and other business law issues.

Contact our business law experts today. Let us help with your contracts so you can focus on your business.

7 Factors to Consider When Choosing Business Lawyers

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What do you love about owning your own business? Most likely, you enjoy selling something or providing a service that other people need or enjoy. But, who do you turn to when you need help with your business, and you don’t know the answer?

Business lawyers are there for you and other business owners when it comes to business legal matters. They assist with starting a business, writing contracts, contract disputes, and many other areas. If you encounter an issue with your business, you should contact a business sooner than later.

Choosing business lawyers can seem daunting, but we are here to help. Here are some things to consider when considering options for lawyers.

1. Integrity

When you select a lawyer, they represent you and your business. This means that you’ll want that person to have upstanding character. Lawyers need to be tough in some circumstances, along with stalwart.

What you don’t want is someone who will go to any lengths to resolve an issue in your favor. Once they have moved on, you are left to pick up the pieces of yours and your business’ shattered reputations.

A good way to root out the bad ones is to look at lawyer references and reviews. Many different sites offer reviews for lawyers and law firms. You should also cross-check those reviews with at least two other websites to get a complete picture of a lawyer.

If a lawyer is accused of shady behavior multiple times, they will do it again.

2. Consider Legal Experience When Choosing Business Lawyers

Integrity aside, the best way to choose a competent lawyer is to take their legal experience into account. You’ll want to verify that the lawyer you want to hire has experience with the issue you have. Talk to your lawyer and ask them questions to get a thorough understanding of their experience.

You should also see if they have other areas of expertise related to business law. It can be good to have some to call who is already familiar with your business if other problems arise.

Look at the track record of their cases and see how successful they are at resolving issues for their clients in their favor. This can help give you confidence in your lawyer’s ability. You should also consider the number of cases your lawyer has handled.

A lawyer who has been practicing for years will have more wisdom than a lawyer with less time on the job. This shouldn’t be the most important thing you consider, however. Lawyers who have a high success rate with their cases have a lot of wisdom to offer.

3. Experience as a Business Owner

Business lawyers have experience dealing with the legal aspects of business, but many do not have experience as business owners. They can understand, but it can be more difficult without firsthand experience.

When you are dealing with a large law firm, most of the lawyers at the firm will work for the partners. At a small law firm, however, the lawyer that handles your case might be a partner. This means that they will have the legal experience you need and share your business experience.

Business experience isn’t necessary for business lawyers to be effective. However, that experience can help them better understand the issues that you have.

4. Effective Communicator

Aside from knowledge of the law, one of the most important skills a good lawyer should possess is good communication skills. A lawyer’s job is to communicate with opposing counsel, the judges that preside over their cases, and juries. Your lawyer also needs to be good at explaining things to you.

Legal matters are difficult to understand, and your lawyer should communicate this in a way you understand. A good attorney should anticipate your questions and notify you about developments without you asking.

Not only does an attorney need to know how to communicate, but also the best communication method. Some matters may only warrant an email, but others may dictate an in-person meeting. Your attorney needs to read the situation and respond as appropriate.

5. Billing Structure

Legal services can cost a lot, especially if it takes your attorney a lot of time to address your issue. Hourly billing will cost you more if your problem only requires a few hours of a lawyer’s time.

Talk to your lawyer about the fee structures they have available. Find a lawyer with a fee structure that fits your needs at the time. You should also inquire if the fee structure can be adjusted if your needs change in the future.

6. Get a Local Attorney

Business laws will vary between states. Some districts in a state may have unique business laws that are different from others across the state. This is why you need someone familiar with the business laws in your area.

It isn’t impossible for lawyers not from your area to help you. However, they will need to familiarize themselves with local business laws. Much of their time will be spent trying to understand local regulations instead of playing an active role in assisting you.

7. Relatability and Transparency

An important element of a successful attorney/client relationship is the attorney’s ability to be relatable and transparent. As a client, you need to be able to get along with your attorney. Good rapport is important between an attorney and their client, especially when difficult subjects arise.

A good relationship will make it much easier to discuss these matters.

Your attorney should also communicate with you when the need arises to ensure you stay on top of matters concerning your business. The more comfortable the two of you are communicating with each other, you’ll both be able to tackle issues better when they come up.

Your Greenville Attorneys

Your care a great deal for your business, and when choosing business lawyers, we know you’re looking for someone who will do the same.

A good attorney should be open, reliable, honest, and an effective communicator. You will also need someone with plenty of experience; if they are a partner at their firm, they can also relate to you as a business owner. Find a business attorney in your district who is familiar with local business laws.

If you are in the Greenville area, De Bruin Law Firm has attorneys who can help with the legal matters of your business. We also have attorneys who specialize in real estate law, criminal defense, and estate planning. If you need legal help, schedule a consultation so we can assist you.

The De Bruin Law firm offers a wide range of legal services to clients in Greenville, SC and the surrounding upstate. Our experienced attorneys can help you with legal matters in the areas of business law, criminal law, estate planning, and real estate law.

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