What is a mechanic lien on a house?

What is a mechanic lien on a house?

If you are trying to buy or sell a house that has a mechanic lien on the property, it must be taken care of (released by the lien holder) before any change of ownership can take place. In real estate terms, a mechanic lien, or a construction lien, is a security interest in the title of property. If a subcontractor, architect, plumber, etc. does work on a piece of property and were never paid, they will file a lien in the county where the property is located against the particular property. One important thing to know about mechanic liens: If you hire a general contractor to do work on your house and the general contractor hired a subcontractor and did not pay him for the job performed, the subcontractor can file a lien against your property and the home owner will be responsible for paying it before it will be released. Some tips to avoid mechanic liens Keep all receipts and paperwork from the contractor Get a lien waiver Pay with joint checks Pay subcontractors yourself The best defense against a lien on your house is to avoid it at all costs. However, if you find yourself in a situation where you need a lien released, please contact us to help you determine the best course of action for your...
What is a spendthrift trust?

What is a spendthrift trust?

A common occurrence while doing estate planning is when grantors want to leave specific property (money) but are worried that the beneficiary won’t use the property or spend the money wisely. One option available to the grantor is to have a spendthrift trust drafted. A spendthrift trust is a trust that is created for the benefit of third party that gives the trustee full authority to make decisions as to how the trust funds may be spent for the benefit of the beneficiary with certain restrictions as to how the money may be spent or distributed.   In simple terms, it’s a way to help protect the beneficiary if you believe they are not capable of handling the assets their about to receive.  A direct benefit of setting up this type of trust is that the beneficiary cannot access the funds directly, neither can his or her creditors. There are multiple reasons why a spendthrift trust might be useful.   For example, if the beneficiary is not good with money, has an addiction, might fall into debt with creditors, or is physically or mentally unable to make good decisions. If you do decide to have a spendthrift trust drafted, the following are questions that will have to be answered. When do you want the trust to end? Do you want any special payouts if the beneficiary encounters large expenses? How much money do you want the beneficiary to receive each month? Who do you want to be trustee and or successor trustee? If you are thinking about drafting your estate plan, please do not go it alone. Having a good...
How is money disbursed at a real estate closing?

How is money disbursed at a real estate closing?

Two common questions I get from my real estate clients who are selling property are: how and when do I get my money? In Illinois we make sure all parties to the transaction (buyer & seller) are safely covered with title insurance.   Title insurance protects the homebuyer and his lender from the possibility that the seller doesn’t – or previous sellers didn’t – have free and clear ownership of the property and are thus unable to transfer full title ownership to you. In order to obtain title insurance you must have your closing at a title insurance agency office where the policy is provided. The title insurance company has an interest in making sure the closing is handled correctly. Therefore, the title insurance agency conducts the closing. One of the benefits of using the title insurance company is that the title insurance agency acts as the “middle man” for the transaction and collects all of the monies from the buyer and lender. Once all of the money has cleared, the title company then disburses checks to all parties that need to be paid to complete the deal. In most transactions, checks will be given to the real estate agents, real estate attorneys, and the seller’s lender and/or lien holders. Any remaining proceeds are disbursed directly to the...