03.08.

The step-by-step legal process of selling property when the Seller is an Estate

Many realtors find themselves in a confusing situation when selling a deceased owner’s property.  There are many questions that arise during the process, so we’ve created a simple step-by-step legal guide to selling property when the Seller is an Estate.

We’ll send the steps straight to your inbox.

02.28.

What You Should Know About Foreclosure Prevention and the Foreclosure Process

Going through a foreclosure is a homeowner’s nightmare. If you find yourself at risk of foreclosure or you have received a summons for a foreclosure hearing in South Carolina, you may feel scared and even hopeless. The first step to taking control of the situation is becoming educated about how to prevent a foreclosure and your rights in the foreclosure process. Take a deep breath and a minute to review the points below, so you can begin to take back control.

Prevent a foreclosure

  1. Contact your loan provider about workout options

If you know that you will not be able to make a scheduled payment on your mortgage, it is important that you contact your loan provider right away to discuss your options. Most mortgages have “acceleration” clauses, which allow the loan provider to demand payment of the full amount of the loan once a single payment is late. You may qualify for a repayment plan or loan modification, but you must contact your loan provider immediately.

 

  1. Refinance your loan

If you are having trouble making your monthly payments, you might consider refinancing your home and extending your repayment period to lower your monthly payments.

 

  1. Find more room in your budget

While this suggestion might sound easier said than done, coupled with our suggestions above, you might find ways to cut back your expenses in other areas to cure your default or avoid missing a monthly payment. Steps like cooking at home, buying generic products in bulk, and even canceling cable and internet can help to bridge the gap and avoid a foreclosure.

 

  1. Sell your home

You might consider selling your home to avoid a foreclosure. If you owe more on your mortgage than the market value of your home, the sale will be called a “short sale.” In a short sale, your lender must agree to write off the remaining amount owed.  If you decide to sell, please obtain a Realtor who has knowledge and experience in short sales.

 

  1. File for bankruptcy

As a last resort, you might consider filing for Chapter 13 bankruptcy, however, you should consult an attorney and financial adviser before doing so, as there are significant legal and financial consequences to this decision.

 

Your rights in the foreclosure process

 

  1. You may be presented with a Notice of Default

After receiving notices of missed payments, the lender will send a Notice of Default, which will outline how much you owe and the deadline for payment.

 

  1. In a judicial foreclosure state, you have a right to defend yourself

South Carolina is a judicial foreclosure state, which means that a lender must sue you in order to foreclose on your home. The burden of proof will be on the lender and you will have an opportunity to present your defenses.

 

  1. You have the right to appeal

If a South Carolina court issues a Judgment of Foreclosure, you will have 30 days to appeal the judgment.

 

  1. Some states have statutory laws that allow a redemption period after a foreclosure

While some states provide a redemption period after a foreclosure, if a Judgment of Foreclosure is issued in South Carolina, you will not have a statutory redemption period in which to pay the default amount of your mortgage after the judgment is final.

02.20.

9 Ways Children Benefit From Divorce

Divorce has a bad stigma.  People often think it’s best for children if they work through their relationship issues and stick it out.  That is usually false.  If you are considering getting a divorce, but you are concerned about the impact on your children, consider the following ways that children could benefit from divorce depending on different situations.

 

  1. The child is removed from an environment where they were physically abused.

Every parent has a moral and legal obligation to protect their child from physical abuse. If one parent is physically abusive toward the child or unwilling to protect the child from physical abuse by another person, the other parent has an obligation to remove the child from that environment and protect the child from any physical abuse. Filing for divorce and petitioning for full custody of the child can help protect them.

 

  1. The child is protected from psychological abuse.

Psychological abuse can sometimes be more difficult to identify than physical abuse. Emotional manipulation, name calling, harsh punishments, and extreme anger or rage can all constitute psychological abuse. If a child is subjected to psychological abuse in the home, a divorce can facilitate the child’s removal from the abusive parent.

 

  1. A parent or another individual in the home is being physically abused.

A child does not need to be physically abused themselves to be harmed by physical abuse in the home. Witnessing the physical abuse of a parent, sibling, or other household member can cause fear, anxiety, and other harmful psychological effects, and can teach the child a lack of respect for other people, which will have lasting effects throughout his or her life.

 

  1. A parent or another individual in the home is being psychologically abused.

Watching another person be psychologically abused in the home, whether in the form of emotional manipulation, aggression, or verbal abuse, cannot only be hurtful to a child, but can also teach that child to accept such treatment or treat others the same way.  Emotional abuse has lasting effects, whether direct or indirect.

 

  1. The child is protected from a neglectful parent.

When one parent is absent and not fulfilling their parental obligations of providing financial support, a divorce between the parents will enable the other parent to petition for child support. Whether child support will be ordered depends on a myriad of factors including each parent’s income, education level, and work history. Many states use a formula to calculate the proper amount of child support owed by the non-custodial parent.  

 

  1. The child is no longer exposed to substance abuse.

Substance abuse in the home can be very harmful to a child. It is often accompanied by some form of emotional abuse and can lead to physical abuse. Additionally, children living in environments with substance abuse are more likely to gain access to drugs and alcohol.

 

  1. The child is able to relax away from an environment with fighting and tension.

Perhaps a child is not living in a home with physical, emotional, or substance abuse, but has two parents who are constantly fighting—that disharmony in the home can cause many negative emotions for children including fear, anxiety, stress, and depression. If parents cannot learn to deal with their marital problems in a healthy manner, divorce may provide children with a healthier, more stable environment away from the toxic tension of their parents’ fighting.

 

  1. Divorce will enable the child’s parents to pursue future relationships that model mutual respect and healthy communication.

It is important for children to grow up observing healthy relationships that demonstrate love, care, mutual respect, and healthy communication. If a child’s parents fail to model a good relationship, a divorce can enable the parents to find a better suited spouse.

 

  1. Divorce can teach children to set boundaries in their relationships and require respect in relationships.

There is an old adage: “You teach people how to treat you.”  Some couples try to stay together for the children, which may cause them to permit unacceptable treatment. This does not benefit children. If the treatment by one spouse to another has become harmful and is unchanging, a divorce can teach children to not accept that type of treatment in their own relationships.

 

02.14.

The Differences Between an LLC and a Corporation

One of the first crucial decisions when starting a new business is choosing the right business structure. Often, new business owners consider forming a limited liability corporation (LLC) or a Corporation.

An LLC is a business entity that is separate from its owners, known as “members”, flexible in structure, and limits the personal liability of its members. The LLC can also choose different tax structures.  It can choose to be taxed as a sole proprietorship or partnership, depending on the number of members, or as a Corporation.

A corporation can take two different forms: an S corporation or a C corporation. A C corporation is a standard corporation that is formed by filing articles of incorporation with the secretary of state where the business is to be incorporated. An S corporation is a closely-held corporation that derives its name from an IRS provision providing special tax treatment for an incorporated business that meets certain requirements.

To determine the best fit, an understanding of the tax and functional differences of each form is important:

 

Tax Differences:

In an LLC taxed as a sole proprietorship or partnership, there is no need to file a business tax return—each owner of the LLC pays personal income taxes based on their percentage of ownership in the company. As the business entity itself does not pay taxes (the individual owners pay personal income tax), taxes are said to “pass through” the LLC. An LLC, without employees, is not required to pay unemployment taxes or state disability taxes.

Taxes also pass through an s-corporation. In this structure, owners are paid a salary and the remaining profit or loss passes through the s-corporation and is taxed through an owner’s personal income taxes. S-corporations are generally required to pay unemployment taxes, state disability taxes, payroll taxes, and—in some states—state corporate taxes.  

In a C corporation, the business is a separate entity that is required to file its own corporate tax return. The taxes do not “pass through” to shareholders.

 

Organization Requirements:

An S corporation has several organizational requirements:

  • No more than 100 shareholders;
  • Only one class of stocks;
  • Shareholders must be citizens or residents of the United States; and
  • Shareholders must be individuals.

If these requirements are met, the business entity will not be required to file its own tax return and the taxes will pass through to the owners.

In an LLC, taxes also pass through the entity, but there is no limit on the number of members, which need not be United States citizens or residents. C corporations also have no restrictions on ownership and can issue stock in multiple classes.

The choice between forming an LLC or a corporation should be based on the particular needs and goals of your business. For guidance in selecting the best business structure and forming your business, contact our experienced business law attorneys in Myrtle Beach SC.

02.06.

Why You Should Not Put Your House in Your Adult Child’s Name

You may have heard that you can avoid Probate by putting your home in your adult child’s name; or perhaps your son or daughter is helping to pay your bills and you think it would be easier to manage finances if your property was in their name. If you are considering adding your adult child’s name to the deed of your home or transferring ownership of your home to your child, consider the following reasons why you should not do so:

 

 

  • You will no longer have sole legal control of the property.

 

When you put your home in your adult child’s name, you can no longer sell the property without his/her consent. Furthermore, in the unfortunate event that your child were to pass, the property—or at least their interest in the property—could be inherited according to their Will, or lack thereof, depending on how the property is titled.

  

 

  • Your property may be exposed to your adult child’s current or future debt liabilities.

 

Your home may be exposed to your adult child’s creditors, if he/she has unpaid debt, or is subject to a tax lien in the event that your child is overdue on state or federal taxes. Even if your adult child does not already have debt, he/she may be able to use the property as collateral to secure future loans. You will have no protection from their creditors.

 

 

  • The transfer may be considered a gift that renders you temporarily ineligible for Medicaid benefits.

According to Medicaid regulations, if your transfer is viewed as an attempt to move assets and become eligible for Medicaid funds to pay for long-term care, your “gift” may trigger a period of ineligibility for Medicaid benefits. When you apply for Medicaid, you will have to disclose all financial transactions during a certain period of time. If you have to move into a nursing home and you recently made a transfer, the period of ineligibility will be calculated using a formula that divides the value of the transfer by the average cost of a nursing home in your state.

 

 

  • You might have to pay taxes on your gift.

 

The transfer to your adult child will legally be considered a gift and subject to federal gift tax regulations. Under the new tax plan that came into effect in 2018, this will likely only impact families with very large estates, but it is something to consider in your estate planning strategy.

 

  • Your child may have increased capital gains taxes.

For federal income tax purposes, if you simply add your child’s name to the title, he/she receives the gift at your cost basis. For example, if you paid $100,000 for the property and it is now worth $500,000, and you give your daughter half of the house, her cost basis would be $50,000. When she goes to sell the property, she would be entitled to the $250,000 and, if he/she isn’t living in the property when it is sold, he/she might have significant capital gains taxes to pay.

 

Overall, the decision to transfer the deed of your home to your adult child can create several problematic circumstances and, in most cases, should not be done for reasons of convenience or as a tool to avoid probate.  Speak with an attorney and allow them to guide you.

 

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