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Listener Question Show: Real Estate Law

Outlaw Lawyer / Josh Whitaker & Joe Hamer
The Truth Network Radio
August 5, 2023 2:00 pm

Listener Question Show: Real Estate Law

Outlaw Lawyer / Josh Whitaker & Joe Hamer

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August 5, 2023 2:00 pm

On this edition of the Outlaw Lawyer we dig into Real Estate Law. Josh Whitaker and Joe Hamer handle listener Questions this week. All questions center around real estate law. 

If you have a legal situation and have questions you can always contact Whitaker and Hamer Law Firm 800-659-1186.

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See omnystudio.com/listener for privacy information.

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Coming up on the Outlaw Lawyers, we are going to dive into real estate related listener questions.

That's right. Coming up, listener questions. Again, real estate related right here on the Outlaw Lawyer.

Don't go anywhere. And now, Outlaw Lawyer. Welcome in to the Outlaw Lawyer. Josh Whitaker and Joe Hamer are your hosts. They're the managing partners. Whitaker and Hamer law firm. They're practicing attorneys here in North Carolina.

Offices conveniently located for you, Raleigh, Garner, Clayton, Goldsboro, Fuquay Varina, Gastonia, and now in Moorhead City. I'm Morgan Patrick, consumer advocate. Each and every week we talk legal topics, legalese. And if you've got a situation you're facing, you've got some questions you need answers to, you can always call Whitaker and Hamer. Here's the number 800-659-1186. That's 800-659-1186.

Leave your contact information briefly what that call is about and an attorney with Whitaker and Hamer will be in touch. And you can always email the show questions at theoutlawlawyer.com and we'll answer those questions on a future program. Gentlemen, welcome in. It is listener question time, but I know we like to banter back and forth to open up. Yeah.

For better or worse, it's hard to, it's hard to get right into the law, like right to business right away. Yeah. I feel like I'm still easing in.

I'm not in radio mode, man. I feel like you need to slap me in the face to wake me up. I feel like it always takes us a good five minutes to round into shape, you know, and it's real dark in here too. And you turn our chair. So we're facing this brick wall. It's mood lighting.

It's mood lighting. I'm just staring at a brick wall and it's dark and it's hot outside. And I got these long pants on.

I don't know why I dress nice. It was, it is hot. I was up this past week. I was up in Western New York, much cooler in Western New York than it is. I think I'm depressed now. I think in the last 30 seconds, I've become depressed.

I'm kind of like you guys. I've been traveling quite a bit and we've been in the mountains the last two weekends and the highs are in the low eighties. So it is a lot cooler. Still got, I still got the humidity, but you just don't have the oppressive mid nineties heat index in the one 10 area. I've not been traveling anywhere. You went to the beach, you were at the beach. It was a work trip. It was a work trip. Yeah.

You don't, you don't think it'd make that much of a difference. You know, when it's, you know, 81 sounds hot, right? But 81 is, there's a lot to be said for 81 versus what is like 96 today or something. It's the index, right? It's like the humidity. It's the feels like, yeah, I mean, feels like is well above a hundred degrees and this weekend, or I should say, you know, the last couple of weeks, it has just been brutal. Uh, looking for some kind of, I think I want to say July, uh, is going to go on record as one of the hottest months in the history of the planet.

Yeah. They say that man, but they didn't know how to take temperature like a hundred. They didn't even have thermometers back then. It was just some dude like a hundred years ago. It was just some guy who had like a thermometer in his pond or something.

They don't know. That's what I say. Thermometer, George, that guy. They could say it's been not, it's, it's the hottest month since 1880 or whatever the date is that like they say we had real, I bet they had some hot ones back in the 1600s, man. I don't know why. Yeah. But all times it was hotter than, I don't know. Maybe that's the attorney in me. I just don't trust that when they say that. No offense to you personally, Morgan, none taken, none taken, just a lot of scientists out there that are, that are chiming in on it.

But you know, I get you, I hear you. This is the kind of temperature where I just have to be like in a lake, like all day long, just in LA you don't get out of the lake until it like the sun goes down. So sunscreen, baby sunscreen.

We did tubing on the new recently and we got a lot. I mean, we got a lot of sunscreen on, but we missed a few spots. Not good. Not good, man. You talk about temperature, right.

And how it's not good out there. And I've been, I've been on this health journey. That's right. Have you, have you, Josh? No, I'm anti-health. Well, update us. Update us, Joe. How's it going? I'm doing all this dumb stuff, man. Trying to get healthy.

It's going pretty well. But one of the things I've been doing, and I'm not a scientist, so I can't give you all the literature to back this up, but I've been doing these ice baths, right. And it's real good on a hot day, man, to do these ice baths. And it's kind of, it's kind of miserable for a little while, but then you get out and you feel real good.

Anyways. What are you doing in the morning? Been doing it in the afternoon and the heat, heat of the day.

Been doing some, some exercise and then following it up with a good old ice bath. Now, so the ice bath, are you submerging? I'm submerging, man. You're supposed to get into like where you're like neck deep so it can hit your pituitary gland. But, uh, I'm not deep enough on my health journey where I'm not skinny. Like I'm too fat to get all the way down that low. But, um, was it just like a plastic tub?

What do you in? And I tell you, it's like a tub. Yeah, man. You know what I've been doing? We got that ice machine at the office we bought and I've been, it's been sitting there.

We don't, you don't need ice to practice law. So I've just been taking it and I've been bathing in it. Nice bass. It's pretty good, man.

You should come on and get in. That's uh, yeah. Yeah. It does a lot for you.

It's supposedly that I can't tell you everything. It's like, that's good. Dopamine.

It gives you dopamine. That's a thing. And uh, did Joe Rogan tell you to do this? This is, this is scientist.

This is the same scientist who told us it's the hottest, the hottest year in history. I trust them on this one. Yeah. You see that a lot on the, on the Tik TOK and the reels and everything else. You see a lot of guys doing this. They're always in shape too. The guys that do it.

Yeah. That's the thing, man. It ain't a bunch of fat guys. Like fat guy, like me, like you need to do this.

I'm not going to listen, but it would be more realistic. We had a bunch of fat guys doing it. I mean, all the skinny guys, like, why are you doing it?

You look great. Yeah. They aren't even real man. It's computer gym. That's AI generation. Yeah. I've been, I've been playing around with that this weekend. If you get on social media, I did a, I found a AI generator that you upload a picture.

That's not a scam. You upload a picture and you tell it to do something. It'll do it. So we did me and Joe as wild West outlaws in cartoon form.

And I got mixed reviews on how, how much they look or don't look like us. I think it was fantastic, man. And I'm, I'm smoking something weird in the, in the picture. I think it's just a cigarette. Yeah. It's an old, it's an old, yeah. You rolled it yourself while you were sitting on your computer doing nothing.

I was in the ice bath, man, suffering for the good of my mental and physical wellbeing. So you, how long have you been doing that? Uh, I think I'm going on two and a half, three weeks of it. You know, you're supposed to get 11 minutes cumulative throughout the week. So I've been trying to do like three minutes at a time and every few days. Are you doing it at night or doing it at night?

I think technically, I don't know that it really matters. I think you do it in the morning. You get, you get like woken up better. Like there's, there's benefits to doing it in the morning.

That'll like wake you up and give you a Joel. I just been doing it when I can do it. So it affects your sleep now. No, I've been sleeping pretty good, man. I've been on that magnesium as well.

And if you want another health tip, everybody get on magnesium. I mean, you got young kids that'll put you to sleep. I mean, they'll wear you out. I'll put them to sleep. No, they, uh, it does, man.

It takes a toll on you. And then it's hot. We talked about that. And you put those kids outside with you in the heat and it's just a, so my kids are good kids. My kids are stupid. They've been out of school for a while now and they're turning into shiftless hobos.

Yeah. And they're going to go back and it's going to be a night where yours go when do yours go back? They do the, uh, they're like more of that traditional calendar.

It's like mid August. They don't track out. They just go, yeah, they're here.

My, my two, man, my two. Yeah. It's not one of those fancy track out school.

No, the track house always confused me. We were on that for a little while. It sounds good.

Honestly though. It sounds pretty sweet. If I was a kid, like it used to, I used to hear about it.

I like this terrible. You don't get a summer, but now it sounds pretty sweet. Yeah. But can't you, can it happen where your kids are all in separate different schedules?

Like they're not at the same, I don't know how that works anymore. Give a couple of them away, man. Get you a couple more of that. Yeah. You got to like the load.

Well, I tell you what, Joe, this has been a heavy week for me. I had been in a lot of, uh, consultations, right? I've been in a lot of consultations that, and that with our listener questions, folks call in folks, email us questions, and we kind of pick the ones that would make for the most interesting conversation.

Maybe that would hit be useful to the most people. Uh, it's kind of why we do this. And, uh, I got a lot of real estate questions, a lot of trust questions we, we always touch on different things.

Uh, we try not to be repetitive. So if we've talked about it on the show before we try not to really cover it again, but I have, I have a handful of what I would call real estate listener questions to tackle. And I know you've got a couple, one of them, a trust question. We get a lot of trust questions. Cause I think your average before I went to law school, I didn't really know what a trust was.

Trust was just a fuzzy concept, something rich people maybe did. I had no actual conception of what it was. And then of course you go through law school, it gets a little less fuzzy. You get 20 years into practice. It's not fuzzy anymore.

It's really sharp. Yeah. A lot of those trust questions are disguised because people don't even know that they're asking a trust question, but that's just the, that's the answer, right? Like they ask you a question you're like, Oh, you need to trust. So today we got to, we're gonna talk about trust. We're going to talk about rental property.

We're going to talk about LLCs. We're going to talk about liability. We're going to talk about, God, you're getting me going, man. I know everybody's getting really, you're getting my blood going. You're in your car.

You're, you're at home. You're getting really pumped up about these hyperventilating, these weighty legal topics. But Morgan, that's going to be the show today. Listener questions, which are hopefully relevant and useful to the folks who have taken their good time to listen to us 10 out of 10 episodes.

Okay. The outlaw lawyers. Again, we're going to dive into real estate related listener questions that have come in.

That is coming up on the program. So again, we'll have some fun with you and we'll also talk a whole bunch of real estate law that is coming up. If you've got your own legal situation outside of real estate or real estate related, you can always call the firm 800-659-1186.

That's 800-659-1186. Leave your contact information briefly what the call is about and an attorney with Whitaker and Hamer will be in touch and you can always email the show. We'll use those questions on an upcoming broadcast. Questions at the outlawlawyer.com. Again, that's questions at the outlawlawyer.com. For Josh Whitaker and Joe Hamer, they're the managing partners at Whitaker and Hamer, practicing attorneys here in North Carolina. Office is located in Raleigh, Garner, Clayton, Goldsboro, Fuquay, Verina, Gastonia, and Morehead City.

They will be back on the other side. This is The Outlaw Lawyer. Welcome back into The Outlaw Lawyer. Your hosts are Josh Whitaker and Joe Hamer, the managing partners, Whitaker and Hamer law firm.

Office is located in Raleigh, Garner, Clayton, Goldsboro, Fuquay, Verina, Gastonia, and now in Morehead City. They're practicing attorneys here in the great state of North Carolina. I'm Morgan Patrick, consumer advocate. We get into legalese.

We talk the topics. You've got questions about maybe a situation you're going through and you need some answers. You can always call Whitaker and Hamer. The number 800-659-1186, that's 800-659-1186. Leave your contact information briefly what that call is about and an attorney with Whitaker and Hamer will be in touch. You can also email your questions to the show and that's questions at the outlawlawyer.com.

Questions at the outlawlawyer.com. And we're back and again, real estate questions, listener questions, and I'm excited about this. We're going to go trust first, right, Josh?

Josh Whitaker Yeah, I think we're going to start there. We're down here where we mix up where we're recording from. Sometimes we're with Morgan and we're over in the studio in Apex. Sometimes we're in Garner, our Garner office. Sometimes we're in our Clayton office today. We're at Shady's on Main Street in Garner. So, would you say it's on location or that would be on location?

Josh Whitaker Yeah, you're on location. We have to move you around because of the fandom. They follow you around. Morgan Housel It's crazy, man. It's like the Beatles.

I mean, all these legal fans. I mean, they're screaming for, you know, they, it's a tough gig, but you guys have handled it very, very well. Morgan Housel It's really hard to handle the level of fame we've achieved.

It's a burden that we carry and I get real tired. Josh Whitaker You do it for the peeps though. You do it for the listeners. Morgan Housel We do it. We do it. Yeah, we do it.

We do it for them. Josh Whitaker So when I was growing up, I did not grow up in a family that had a trust. Morgan Housel I thought that was gonna be the end. Josh Whitaker Were you in the jungle? Like, I don't understand.

Josh Whitaker No, no, no. I did not grow up in the kind of family where we had things in a trust or we had a family trust or there was a trust fund. That was, you know, I only heard about that on TV. And so growing up, I had a very far fetched concept of what a trust is, of course didn't know what it would be used for. But it can be used for now as an attorney with experience, trust can be used for a lot of different things.

Morgan Housel That is correct, Josh. Also didn't know what a trust was. And I'll tell you, I didn't even watch shows that referred to trust. That's how much more privilege you had than me, brother.

Not that it's a competition. Yeah, and like we talked about earlier, a lot of times, we'll get a question to which the answer is like, yeah, you need to trust and folks won't even realize that that's the way they need to go. And so without really diving too deep into the question, I guess we kind of can kind of give it in generalities because we get a version of this question a lot of the times, but it's essentially you'll have someone who's looking to do an estate plan. And they'll have whatever size estate that they've got. And they'll have a kid, right? And then let's give them four kids. Three of those kids are fantastic. They love them to death. They're really good kids. They do what they're supposed to do.

They clean their rooms, whatever, what have you. And then they got the one kid. And the one kid is the one that they don't trust to take care of themselves. They don't want to leave them a bunch of money because they don't, they don't, you know, maybe they've got a drug problem. Maybe they've got some kind of mental health issues.

Maybe they're just not capable of handling their own affairs. And even outside of those situations, you could just have a minor beneficiary. And the answer to how do you deal with that situation is going to be, well, you need a trust. Yeah. And you can have, I see situations too, you know where they don't trust a, they don't trust a son or daughter's spouse.

Right. So they don't, they don't trust a son or daughter's spouse, or maybe you have a child with special needs and money and assets need to be handled in a way that doesn't interrupt with any other benefits that that child may, may have coming to them. And so there's all kinds of reasons why trust comes into play, but a trust is so easy to create. You just create it. You say, Hey, I want to trust.

You have an attorney or someone who knows what they're doing to write it up for you. So they know, we know what it, what it is. And then bam, the trust is in existence. That's it. That's our episode folks.

Thanks for coming and listening. And then you fund it. And then you operate the trust according to the instructions and the trust creation document.

Right. So in the, in the piece of paper that creates a trust, and then you abide by that and the trust, they can get as complicated or uncomplicated as you want, but then they, it's kind of, I think about trust as like a living, breathing person. Like you've created this entity. It's kind of like creating an LLC or creating a corporation. You create this entity that's got written directions on how it's supposed to operate.

There's a trustee as the person that operates the trust carries out the wishes of the, of the trust and the trust just goes. Yeah, man. Good. And that I like that living, breathing analogy, but with the, with the caveat that you gotta, you've got this, this thing, but it's being, you've almost got like an operator, right?

So almost think of it like you remember power Rangers, you watched a ton of power Rangers and they had those machines and the power Rangers would get inside and control it. That's it. That's a good one. I was a little, it's a good one. I was a little younger than you at Voltron.

Okay. Same concept was Voltron. Voltron had people in it running it anyways, whatever analogy you use. Like you said, it's a, it is its own entity, but then you've got the trustee that that's kind of driving the train. And with that said, you talked about how a trust can be complex. It can be simple.

It can be ridiculously convoluted it really depends. So you'll have some folks who want to give just unfettered discretion to the trustee, tell the trustee, Hey, you've got this trust to manage, you know, do with the principal as you please. We've got beneficiaries and they get a lot of discretion and then you'll have some trust. They want to be way more restrictive.

Right? And so, and the scenario of someone who's having a tough time struggling with addiction, struggling, taking care of themselves, maybe they have special needs. The trust can give parameters like this is when you can make a distribution. These are the, these are the things you need to take into consideration. And then you can either give as much as you want, or you can give specific amounts. Again, that's the beauty of it. You get control and you can customize it to your liking. So we can get real crazy with them real complex, or we can keep it real simple.

And there's, there's other reasons too. You know, there can be tax savings with trust. When I'm doing estate planning, consults or estate planning work, I always tell people, Hey, well, you know, trust don't die. You know, Josh Whitaker, I will die one day. Trust don't die. Now they can dissolve, you know, you can have instructions for them to dissolve at certain times, certain events, when a kid gets married or when a kid gets her four year degree from college, or when a kid turns 40, you know, you can, there's all kinds of mechanisms.

It's really up to you as the grantor, the settler of the trust, the trustor, I suppose. I like that word, man. You really think you're going to die?

You look great. I don't know that you do, man. They got a lot of advancements. I think they'll, they'll come up with some kind of weird STEM cell thing. You'll start drinking like a Capri sun with SIM STEM cells in it, and you'll be good for another three, 400 years. I'm holding out for one of the nano robots that repair.

Yeah. You could be here forever, man. No one knows. Somebody was telling me for every, so everybody, so everybody born in 2023 will live one month longer than if you were born in 2022. So every year later you're born, you're gonna live one month more than the people born the year before. Was that like a life expectancy thing or is that like, so, huh? Okay.

Well, good for them, man. That's science. Somebody told me that. Okay. A scientist. Yeah. One of the scientists that I run into.

Do some, some citations at the end of this episode, the site, some of these studies. But in trust can own anything that you can own. Trust can own real property, right? They can take a deed. They can get a new deed property into a trust. They can be beneficiaries on your life insurance, your 401ks, your pensions, you know, they can stand in your place and do anything you can do, uh, yourself. That's very true, man. You know, another cool thing about trust is you can, if you structure your trust the right way, you can get, uh, protection from creditors as well. That's right.

Which is cool. Spin thrift provisions. You can, you can, uh, protect anything that goes to back to protecting maybe the child or the relative that you don't necessarily trust with money.

It's got a bad history with money. Maybe has some liens, judgments, taxes. They owe a spouse.

That's that way. I've had a lot of folks at my office and say, you know, I love this kid, but I do not love their spouse. And I don't want their spouse to get anything you know, I want them to suffer. You know, a trust again, and a marital interest in North Carolina, that's a topic for a whole nother day. You know, once you get married, uh, you know, a spouse has a marital interest in a lot of things, a lot of things acquired during the marriage. Uh, but there's things you can do and nothing's foolproof, but there's things you can do to limit, uh, you know, what the, what the bad spouse and in this situation can or can't touch.

So if you're super vindictive and you hate your, uh, your kid's spouse, give us a call and we can help you really stick it to them. Really make sure they don't, uh, realize any benefit from your estate. So, but it's all, it's all planning. You know, I'm helping somebody right now starting to get everything into a trust. Um, you know, if it's not already in an LLC, if it's not already in a corporation and, and those can go, you know, those interests can go into trust too.

You know, your, your membership interest in LLC stocks you hold, you know, there's really no limit. You know, it's just a matter. It's just a, it's just, is it a good idea? And that's kind of why you consult with an attorney. Sometimes we bring in your CPA, uh, or your tax folks and make sure they're okay with it. But the whole point is, you know, avoid probate, accomplish these other goals that we've talked about.

There's a lot of advantages to them and they're just not for the super duper. It's not just for your yacht. You don't create trust just for your yachts, your fancy boats to be in.

Yeah, for sure, man. You, and you said it avoid probate, right? Like that's the ultimate goal. Uh, we don't want to, we don't want to have to go down to the courthouse any more than we have to go down to the courthouse. So let's, let's avoid that probate. And hopefully you guys all have yachts. Um, I like to imagine our listeners as they're all listening on their yachts. Yeah.

They're all, they're all listening on their yachts for sure, man. All right. Well, up next, that's, that's kind of what I want to talk to. That was the, that was the trust question.

Like basically what can a trust be used for? Um, and I think we, I think we answered that and, um, up next, I think we're going to spend some time talking about money. We're going to start talking and talking about proceeds from the sale of real property. I think that's what we're gonna talk about next, Morgan. All right.

Proceeds from the sale of real property. That will be the next topic. The next listener question coming up on the outlaw lawyers, your host, Josh Whitaker and Joe Hamer, managing partners, Whitaker and Hamer law firm right here, Raleigh, Garner, Clayton, Goldsboro, Fuquay, Varina, Gastonia and Moorhead city. They have offices and again, they are practicing attorneys here in the great state of North Carolina. We'll take a short break. We're back right after this. Welcome back into the outlaw liars. Your hosts are Josh Whitaker and Joe Hamer, managing partners, Whitaker and Hamer law firm offices, conveniently located in Raleigh, Garner, Clayton, Goldsboro, Fuquay, Varina, Gastonia, and now in Moorhead city. I'm Morgan Patrick, consumer advocate. Just a reminder, both Josh and Joe pricing attorneys here in North Carolina, we get into all kinds of legal topics. Uh, we are focusing in on real estate this week. We have listener questions.

So Josh, take it away. You know, Joe, I was in, you know, Morgan always has a good job bringing us in, taking us out and he's a great job. Yeah. Fantastic.

Topknots. But we do, you know, I want to stress that we do cover a lot of North Carolina. Uh, we have offices in a lot of different places. I was going to tell you, I was in Raleigh, so I was in the Raleigh office today. I was in the Garner office yesterday and the day before I was in the Fuquay office and tomorrow I'm supposed to be in the Moorhead city office. You're a traveling man.

I'm telling you, man, that's impressive. Let's see, let's see. Now tomorrow, tomorrow, of course we tape in the middle of the week. It'll be closer to the weekend. So you're going to be near the coast on the weekend. Nice.

With no family, man. The dream. I got to come back the same day.

Josh Whitaker. I'm going down there and coming back the same day, but more in cities. Beautiful. Yeah. It's nice, man.

You it's right there. It's a cool spot. Very nice. Yeah. Cool. It's a cool little area and we got a fantastic little office down there. Yeah.

Yeah. I really enjoy being down there. The folks I've met down there are great. You know, I'm not, of course I'm not originally from there.

I'm originally from the South Raleigh area here, but- Also a beautiful place. Yeah. But yeah, we definitely, you know, it doesn't really matter where you're located for a lot of this stuff. You know, we can, we can definitely be of service to you. But anyway, I was doing a consult. I was doing a consult. I was doing a consult in the Raleigh office today.

And one of the questions that came up as part of this consult was they had just sold their primary residence. And so I should tell you, me and Joe, we're not tax people. We're not CPAs. We're not allowed to give tax advice. We are licensed attorneys.

The North Carolina bar is very specific about that. And I wouldn't want to give you tax advice because I can't tell you anything about taxes, but I can tell you some general things that are just, you know, common knowledge. And one of those things is when you sell a principal residence, there's a certain amount of your proceeds.

If you're married, each spouse gets a certain amount of your proceeds that are tax free. That's safe to say, right, Joe? That's safe to say, brother, you said it.

So, and what a beautiful thing it is, man. That's right. So if you sell a principal residence, the way that the tax codes read is that, you know, your each spouse, about $250,000 of proceeds, 500,000 jointly, half a million jointly would be tax free. You know, you just got to be a principal residence for tax purposes.

You need to have resided there at least two out of the past five years, not used it for business purposes. There's all these things that go into it, but generally speaking, you sell a principal residence, no matter what you do with the money, that's your money. It's your money.

And that's a, again, beautiful concept, man. What better money is there than the tax free money, my brother? I don't know. And that's one of the values. They don't talk about that. You know, home ownership, they talk about, you know, you got the HVAC goes out, you got to fix it.

You know, you got all these chores, which are, aren't great, you know, admittedly. Yeah. But that's one of the benefits is right. Real estate usually holds onto its value. It usually increases quicker than most other things that you can invest in. And at least your personal residence, you're not really looking at much tax consequences.

So it came up. And then the next question that came up was why, okay, well, I also sold some investment property. And when I say investment property, I mean, it could be residential real estate that you rent out that you don't live in. It can be land. It can be commercial property, right? Where you have re retail tenants or office space, you know, basically not your primary residence, right?

Right. Any real property is not your primary residence. I would call investment property. And that brings us to another thing that I didn't know about before I was an attorney, but 10 31 tax exchanges, right?

And so somebody was really concerned. They're like, Hey, we're going to sell this investment property, we're going to, the good problem is we stand to make a lot of money. But what do you know, what are we going to do with it? One thing is you can do a 10 31 tax exchange, if you follow the rules under the code, you basically can take that money and put it into a like kind property, tax free, which is also a beautiful concept. Because if you don't do that, you're selling any any property other than a primary residence, you're going to be paying the government man, you're going to be paying them a good amount of money, you're gonna have some capital gains.

And so they're all it's a real bummer. There's all these ways, there's all these methods, you know, to to manage that and our folks out there who have bought and sold property before or, you know, have to think about their tax consequences each year, you know, some people could sell something, maybe they need to sell something, and they won't do it. Because it's already in a year where they're going to be taking them crushed tax liability crushed by tax liability. So they'll wait, or they'll hang on. But there's always things you can do, you know, the 1031 tax exchange is just a great part of the code is named after the part of the code, it comes from 1031.

But, you know, for our purposes today is just to let you know it exists. It's an option that you have if you don't want to take your proceeds and just go home. And, and I think some folks may get intimidated by it, right?

Because it's, it's like this, you may think of it like as an archaic, very nuanced and difficult to understand piece of the legal tax code that only the most sophisticated can take advantage of. And you probably think here that it's super duper expensive and costly. It's really not, it's really not something that's going to cost you a ton of money. Without getting into the nuances of it too much, you basically you're going to have an intermediary. So you're going to sell your your your property that you're using for the exchange, those proceeds are going to go to an intermediary who's going to hold them and then transfer them for the new closing.

And they're going to charge you a fee. But it's not, you know, in my experience, that fee is really kind of negligible in terms of you know, the benefit that you're going to get and the savings you're going to have. And of course, you do have to turn around and spend it like you said on a like kind property. But uh, it's it's, it's a better alternative to, like you said, the capital gains tax is all the tax consequences that you're going to you're going to incur if you're just selling and maybe you need to just sell it and realize some of that money you take those consequences or you get around them in another way.

But like you said, man, it's good to know that that 1031 exchange exists. I saw some guy I can't remember what it was on. It was on the Simpsons. No, no, not this time. It was on a, it was a tick tock or a real, I don't know.

They all got different names. We need to come up with a universal name for a short video. You just did a short. What about a vine?

I like a vine. Oh wait, that's not anymore, but we bring it back and bring it back. The kids have already forgot about it.

We bring it back and it's our thing. What about weed? Can we call it a weed? No, we can't call it a weed.

The kids will love that. But that's not what it was. This guy was, he called it a 10 31 train.

I can't remember his name. I mean, a lot of choo choo arm motion noises kind of guy, but he was like, you know, you 10 31 this property into a bigger property. And then that went into a bigger property that went into a bigger property. And then you die, your kids or whoever inherited at a stepped up basis.

Right. And then you never pay taxes on your, on any gain in your whole life. Got it at 10 31 train.

Man, if that happens to me and my parents do that, and I take all this tax free property, you can believe I'm going to be going around going choo choo on everybody. What was the wrestler that used to do that? Uh, tugboat? Tugboat.

Yeah. It wasn't a train sound though. It was a tugboat.

It was a tugboat. It was choo choo. You misunderstood.

You misunderstood. I was doing a choo choo. That's a train sound.

And you're thinking of choo choo, which is clearly the sound of a tugboat. I feel like he did. He was a huge guy. I feel like tugboat, you know, tugboat ended up being the shock master too.

I'm almost positive. And then his career took a dive. That's a very specific reference back in the day. You had tugboat and you had typhoon and they were fantastic. Or were they the same person?

Maybe, maybe they took tugboat and they made him type. And then he got with earthquake and they were the natural disasters. This is very important.

This is way more important. Uh, well, the earthquake was, uh, what's the earthquake's name? Cause he's passed away.

Uh, he was also gold. I'll tell you, man. Let me do something quick.

Let me, let me check. Let me have our earthquake was a sumo wrestler. He was an American born.

I think he was the first American born sumo, some type of John Tinta, John Tinta, John Tinta. Yup. Yeah. And he was, yeah, I think you're right.

I think he was tugboat and then typhoon. No. Yeah. I think he, I think they are the same person. You're right. And he was tugboat and that guy's still alive. Yeah.

Yeah. He is. I saw him.

I saw him doing an interview the other day. He's looking, he doesn't look like he's been on his health journey necessarily, but he was always a hardy fellow. You get to a certain age.

I think if you're a 300 plus pounder, you get to a certain age. It just, you're not gonna, it's going to get away from you. Yeah. Yeah. It's coming from me too. It's at some point. Well, you're, you're young. You should keep trying.

I really appreciate it. I'm telling you guys go do an ice bath and, and come back and talk to me, man. You're going to be like, this is stupid and it sucks. You bought a special tub. Yeah.

My buddy, my buddy's got one. But yeah, you fill it with ice and you fill it with water. It's basically, it's basically a horse trough. Isn't it? I've seen these things.

His is like more of an inflatable deal. But yeah. Three minutes, man. You're going to, you lose your, you get in and you start hyperventilating, right? Cause you can't breathe, but then you get, you calm down and then it's cool. You're fine for a while. Then you start getting the tingles, you start getting the prickly tingles, but you just push through it, but you get out, you have this like rush of euphoria. You feel good. Your body starts heating up. It's a good thing, man.

And then you live forever. I was going to ask Joe, did you do any research on this? I mean, did you, uh, yeah, there's tons of, there's, there's like a wealth of benefits when we, I'll get you the benefits. Should you, should you get a medical checkup before you start jumping in ice baths? I mean, I would think, well, I'm not telling anybody to do it.

This is what I do. Yeah. I wouldn't, you know, I don't know that tugboat should go jump into an ice bath necessarily, but, uh, I'll get you some stats.

I'll give you some, some facts that back up these benefits, man. I've heard a lot of people talking about it. Yeah. All right.

Well, we're going to take a short break. The outlaw lawyers, Josh Whitaker and Joe Hamer managing partners, Whitaker and Hamer law firm. Again, offices conveniently located Raleigh, Garner, Clayton, Goldsboro, Fuquay, Varina, Gastonia, and the new office in Moorhead city. They are practicing attorneys here in North Carolina. We're having some fun talking about real estate related listener questions that have come in.

And again, we'll get to more of those coming up on the other side. If you've got a legal situation you're facing and you've got questions, you need answers. You can always call Whitaker and Hamer. Here's the number 800-659-1186. That's 800-659-1186.

Leave your contact information briefly. What the call is about and an attorney with Whitaker and Hamer will be in touch. And you can always email the show questions at the outlawlawyer.com. We'll answer those questions on a future program.

We're back right after this. The outlaw lawyers, Josh Whitaker and Joe Hamer, your hosts and also managing partners, Whitaker and Hamer law firm, offices conveniently located for you, Raleigh, Garner, Clayton, Goldsboro, Fuquay, Varina, Gastonia, and in Moorhead city. They're practicing attorneys here in the great state of North Carolina. Again, legalese, that's what we talk about each and every week. I'm Morgan Patrick, consumer advocate. And again, sometimes referee between Josh and Joe, but we always have fun, but it's a very serious subject on some legal topics. And this week we are on listener questions and they are real estate related. Josh, take it away during the break.

I think Joe is doing some research. Yeah, man, I was going to tell you more about ice baths just because I know you're interested, but, uh, so check it out. First of all, you don't want to get into too cold of water. That's the, that's my first caveat because you can go into, you know, you can have some, some shock going on. Um, you don't want to get into a dangerous body of water either, you know, and you can actually get some of these benefits. Josh, I know you're sitting here, you're thinking, I don't have a big tub. I can put ice into and submerge myself.

You can just do a cold shower. You can get some of these same benefits, but just to give you a rundown, you're going to have an increase in energy and focus because you're going to have a big release of epinephrine and norepinephrine, which are very important. According to the scientists, you're going to build some resilience and some grit. It's going to, it's going to train your mind to be tough, right? Like you're going to be more resilient. It's going to flood you with dopamine. You're going to have this prolonged release of, which that makes you happy, Josh, that's going to keep you feeling real good.

And then it's also going to, in the short term, it's going to increase your metabolism because the body's got to burn calories to keep that core body temperature up. So think about all that, man. And all you gotta do is freeze yourself half to death for a few minutes. Right, right.

That's all you have to do. I get you. The, uh, well, that's a lot of, that's a lot of information, but, uh, you know, you know, I was gonna, we got listener questions going. Most of them have been real estate related.

We've kind of gotten off topic a little bit, but, uh, the next one I get a lot. I was in a, uh, I was talking to somebody today and they own some residential real estate, right? So they own some properties that was not their principal residence. They had some investment property that they rented out and they owned it in their personal name and they had insurance in place. They had their landlord policies that their umbrella policies, they had a bunch of insurance, but it was in their personal names and they had had a scare, uh, where a visitor on one of those rental properties had been injured and they had gotten a letter from the, uh, the personal injury attorney, you know, one of the attorneys on, on TV, uh, saying, Hey, this person had been hurt on your property.

And what are you gonna do about it? How are you gonna, how are you gonna make us whole? And so, you know, that gets back, this gets us back to an age old question. This person has insurance. I don't think this visitor was hurt. He might not even have any liability to this person, but it was enough to make us think about that.

Should you have residential properties that you rent in your personal name? That's a great question, man. And when I have that conversation, when that question comes up, when I have that conversation with somebody, I try to figure out how risk adverse that person is. Right. I know how risk adverse I am. You know, I see the bad things when they happen. That's what attorneys see. People come to us with either they either come to us with problems or they come to us to try to avoid problems in the future. And so I sit down with, with a lot of folks where, um, I remember we had a consult a long time ago where someone was going to be liable for a wrongful death.

Right. Somebody was going to be liable. I don't remember the specifics. I don't know if it was a car accident or, or what have you, but basically somebody through their negligence had killed and they, their negligence had led to the death of another person and they were going to be liable, um, in their personal name, not in a business, not in a, not in a trust, their personal name, their personal assets were on the line. They didn't have enough insurance. They had what they thought was a healthy insurance policy. It wasn't going to be enough to cover the damages. So they were, you know, that's, that's the bad situation and it doesn't happen every day. Uh, but it happens and, and, and we see that, so I'm not very risk adverse when we have legal ways to reduce your potential liability for bad things when they happen, I'm always going to vote for doing those things.

Yeah, that's going to be my vote too, man. You say you've seen it enough times and to me it's always like cost benefit analysis and especially with something like forming an LLC and, and deeding property into it, you're not talking about a substantial cost. And if you've, especially if you've got, you know, investment properties of some sort, you are, you've got the wherewithal and you've got, you know, the, you've got these properties, right? So how much more cost is it really to just go ahead and take the additional step of forming an LLC, getting the added protection you're going to have where, again, like you said, the, the, your personal, you don't want to be personally liable.

So you form this entity, you showed yourself from some liability. Um, and it's always, to me, I'm always going to recommend that. And you know, that doesn't, that's not to say you have to do it.

You don't have to do it, but you, you also are going to have some additional exposure, whether, whether anything ever happens or not, I'd say you were more exposed in that scenario. And like you said, man, we've seen it go south so many times. We're always going to make that recommendation. Like, Hey, this is what can happen. We got to tell you the bad things that can happen.

And that's like basically the only things we ever hear about. I had a, I had a client who was, uh, north of, north of 70. It wasn't, you know, he was, he was up there, but he wasn't, he wasn't, um, 101. Right.

Yeah. And we were doing something, we're trying to help him do some estate planning and he had inherited some rental properties from, from his folks. And I don't know, he had laid a lot, you know, he had like 15 or 20 rental properties. He got on that, uh, that choo choo train and they were all in his personal name and he had never had a problem, right. He had insurance in place. He had never been sued.

He had never got the scary letter from somebody saying he was negligent and caused injury or death. And, uh, he had done it in his personal name the whole time. He wasn't going to change. And, uh, it worked for him. Right.

It, it, he beat the odds. Nothing bad happened. That sounds like a really happy story, man. I guess it is. Thank you for sharing that. But, um, but, but we see them all the time.

We see them all the time. Uh, the bad things that can happen, just like making a trust is, you know, you've got legal fees, they're cost involved. So it's not free.

Right. But, you know, creating an LLC, creating a corporation and deeding your residential rental properties is a way that you can really protect your, your personal assets. You still keep insurance in place. You still have that, that, that layer of protection, but it just gives you another layer. Um, and it ain't going to make you go broke, man.

You know, like you're not talking about the most astronomical. I mean, no matter who the attorney is, you know, even with varied prices, doing that is, is a negligible cost in comparison to having something go wrong and you're personally liable. Yeah. It's, it's definitely no more expensive than insurance, right? So if you own a house free and clear, right, if you don't have a mortgage lender, no, one's going to make you get insurance. You get insurance because, you know, I don't know, you pay a thousand or two a year and then you're covered. So if the house burns down to the ground, you're going to be covered for your loss. So that's just the cost of doing business at that point. That's just something that's smart to do. And LLC doesn't cost nearly that much, you know, creating a corporate structure, getting your, your things protected. Um, you know, it's just, uh, it just makes sense a lot of times and it's not, you can have mortgages on the properties in your personal names and still get these things moved over to trust, get these things moved over these assets over to LLCs and protect them because there's a lot of people out there who are looking for ways to get money out of you.

Oh yeah. They're looking, man. You know, we've had, I've had a call this week where a tenant's dog bit someone and an owner was concerned about what potential liability they may have. You know, we've had the call where, um, somebody was threatening to sue because they didn't, uh, we're going to accommodate, uh, a certain animal, you know, and they were looking at, uh, maybe a discrimination lawsuit or animal calls this week, man, are you going to be the attorney from now on? But, but we get those calls. And so for me and me and Joseph, those aren't some far fetched thing that doesn't happen very often. They happen every day, all the time.

To me, every dog, every dog I see is going to bite me. And it's a nightmare that I live in. Uh, but again, you know, and, and I get it, a lot of people, you know, when you first get into maybe like real estate and you get that first property, your margins are really razor thin, you know, attorneys fees, no one's going to make you organize an LLC.

No one's, you know, but, but it's still something to think about. It's way easier to do it in the beginning. Hey, cause you can just add properties to the LLC too, right? Like you don't have to sit here and create, and maybe, maybe you have reasons for creating a separate LLC for every investment property. We could do that too, but most likely you're going to create a holding company and you're going to, you're going to structure it the right way. And then you're just going to keep dumping properties into it and you're going to get rich and then you're going to get your yacht. And then you're going to call us on our hotline and then we're going to all live happily ever after man on your yacht. The, uh, yeah. And again, multiple LLCs for properties, depending on how much equity you have in each property, you know, it's, it's something to look at and you can, again, bring in this trust feature where trust can own the membership.

I like that callback you did there, man, tying it all together, putting a bow on it. But it all, you know, they're all strategies and you don't, you know, we're not the kind of attorneys that are going to sell anyone on overkill. You definitely don't have to go, uh, do everything, you know, 110%. We just look at what risk is out there and how do you, how do you plan to, to avoid the bad stuff happening? Or if it's going to happen, you're at least prepared. You're as prepared as you can be when things go south.

Well being prepared, very, very important. We are talking real estate listener questions that come in. You are listening to the Outlaw Lawyers. Your hosts are Josh Whitaker and Joe Hamer. They are the managing partners, Whitaker and Hamer Law Firm, the power behind this program. They also are practicing attorneys here in North Carolina. Their offices are conveniently located, Raleigh, Garner, Clayton, Goldsboro, Fuquay, Verina, Gastonia, and now in Moorhead City. If you are facing a legal situation, you've got questions, you need some answers, you can always call Whitaker and Hamer, 800-659-1186. That's 800-659-1186. Leave your contact information, briefly what the call is about, and an attorney with Whitaker and Hamer will be in touch with you. And you can always email the show and we'll answer your questions on a future program.

Questions at theoutlawlawyer.com. We're back right after this to wrap it up. Welcome back in. Final segment, the Outlaw Lawyers, Josh Whitaker and Joe Hamer, managing partners, Whitaker and Hamer Law Firm. Again, Whitaker and Hamer, the power behind the program. Josh and Joe, pricing attorneys here in North Carolina. Offices conveniently located almost everywhere.

Raleigh, Garner, Clayton, Goldsboro, Fuquay, Verina, Gastonia, and now down at the coast, Moorhead City. I'm Morgan Patrick, consumer advocate. We have been tackling real estate related listener questions. Back to you, Josh and Joe. Yeah, yeah. So we got through a lot of stuff, a lot of weighty, heavy stuff, trust. We talked about, I said wrongful death once or twice.

Yeah, we talked about dogs biting people. We've had to take breaks. Joe's over here, wolfing down some chicken.

Yeah. You know, I mentioned I was real depressed. I came in here, it was dark. I was staring at this brick wall. My life was spiraling and I was hungry too, man.

I didn't mention that, but I door dashed food about halfway through. You may not realize this, I've been eating this chicken the entire time. I've eaten an entire chicken since we started the show and my, I feel so much better right now, man.

It can't even be described the euphoria I have from this chicken that I've devoured. Well, I want to, you know, as attorneys, we, like I said, I said this a little bit earlier, we deal with people's problems or we help people plan around potential problems. That's what we do. And so we do a lot of estate planning. We talk about death. We talk about things that most people do not have to talk about on a daily basis.

So me and Joe get a little desensitized day to day doing our job, doing what we like to do, what we love to do. I didn't want to take a minute to mention, you know, we had, I've reached that age. I don't feel like I'm that old, but I've reached that age where unfortunately, you know, some folks that we grow up with, right, some folks we know from college or some folks we know from law school pass away. And this week, a guy that I went to law school with who was a lawyer and a former judge in Johnson and Harnett County, Mr. Charles Bullock passed away.

He had been fighting cancer. And I just wanted to take a minute to say that his family and law firm and folks he practices with, they're all in our thoughts and prayers and he will be missed. But he was definitely, he's one of those guys, you know, in a community that you miss when they're not there. You almost don't think about them when they're there. They're doing what they're supposed to. They're, you know, contributing to the community, doing volunteer stuff, heavily involved in their kids' lives. And you almost, I don't think I talked to, I don't think I talked to Charlie in a couple of years.

I saw him in the courthouse a year or two ago. But they're out there doing what they're supposed to do. And you just expect them to be there and then they're not. And that's, you just, you don't even think about it until they're not there anymore. But when you lose somebody like that, especially at a young age, I think he was 51.

Just tough to take, but for the folks that knew him, you know, we're thinking about him here at the show and at our firm. But, you know, again, it's one of those things you have to think about, man. It could be any of us tomorrow.

You're not, I feel like I'm being very depressing. You're not guaranteed your next day. So, you know, if you got kids there, spend time with them. You know, when you go to work, hopefully you're in a spot where you like to go to work, right? If you don't change it, right? If there's something you don't like about your life, you can change it, right? That's something I realized a long time ago. If there's something you don't like, you're the only one who can change it, right?

No one else is going to change it for you, usually. I guess that could happen. This has been a roller coaster. You know, I went low and I got on that chicken high and I'm back.

I'm back down, man. But not to make light at all, man. Like you said, very serious, but also very, like, it's true, man. You don't want to be too heavy. We don't want to be too heavy. I think we see a lot of heavy stuff.

That's one of the reasons we like to keep it light. Well, and guys, just to jump in, it really makes you think about your own bigger picture and making sure that you have all of your affairs in order. I know it's kind of weird to think about it when you're in your 40s and your 50s because you feel like you're going to live forever, but we're not. And I tell you, you really need to be thinking about legacy, your family, and enjoying every day. And again, we usually have a lot of fun on this program, but I tell you, the serious topic of just life itself, when you lose a friend like that, it really starts to make you think about your own life and how you're handling things.

And you talk about work-life balance, your legacy. And I had someone else I know, even younger, 39 years old, passed away unexpectedly. And a buddy of mine actually, he's got a social media presence and he put out a video that was actually, I thought was pretty profound where he worked with this guy and guy was super well liked, loved by everyone.

Everyone thought great of him. It hits everybody. They're very upset when it happens. And this guy was fairly high up in this company.

And he was like, literally that day you come in, you find out about it and they're having a meeting, talking about who's going to replace him. And you think about that and you think about what really is important because a lot of the world's going to move on, no matter how much they like you. And putting, pouring yourself in, and I'm not saying quit your job and just go spend time with your family, but I'm saying, think about what matters. Think about what's important, put the emphasis on what matters. Don't sweat the small stuff, man.

Yeah. I mean, you, you know, we all, you know, me and Joseph, we have, we have wives, we have children. You've got to, you've got to take care of your family, but you know, you should not hate your, your job, right? You should not, you know, you, you are the one who can kind of control where you're at and you're, you're just not going to be here forever. When we do a state planning, it's one of the things, are we planning, you know, for someone to be passed, you know, you could pass away. I could pass away today at 47 or I could pass away at one over three, right? Two, two Oh seven brother.

So I can see it. So estate planning is always a tricky, you know, that's why people, you review your estate plan every year or two, as often as you can, you know, I think the attorneys would say one year, every year, review your life insurance, review your estate plan, review your investments, you know, because you just never know, uh, you never know when that can happen. And, um, and in the meantime, live it up, man, live it up, enjoy your life. Life is short.

Yeah. I don't think we're, I don't think we're supposed to be here to, to suffer. You know, I think, I think we're supposed to a little bit suffer some dice path, do that, do that thing, but you're, we're here to, to, to make the most of it.

I think we're really here. I listened to a lot of hillbilly gym. I'm a big outlaw country fan on Sirius XM. I don't know if you've ever listened to hillbilly gym moonshine man day, but I'll go do that. I love it, man. Nice product plug. Nice. I like hillbilly gym.

The big, the big money hillbilly gym show has not paid me to plug that show, but I like it. But at the end, you know, he always basically says, you know, we're not here for a long time. We're here for, for a good time, but you're here, uh, to enjoy your family, to enjoy your friends, to be, uh, productive, to be happy. And if you're not, you're the only one who can change it. That really isn't legal advice. Uh, it's just something I've been thinking about all week.

And it's good life advice too. I'm undepressed again. There you go. You've done it. Well said, well said, gentlemen.

All right. The outlaw liars, another edition in the books, Josh Whitaker and Joe Hamer, managing partners, Whitaker and Hamer law firm offices located Raleigh Garner, Clayton, Goldsboro, Fuquay, Verina, Gastonia, and Morehead city. They're practicing attorneys here in North Carolina.

If you're facing a legal situation, you've got questions about your own, uh, well, what's going to happen. You can always call the firm Whitaker and Hamer 800-659-1186. That's 800-659-1186. Leave your contact information briefly.

What the call's about and an attorney will be in touch. And as always, you can email the show. We'll answer it on the future program. Again, that's questions at the outlawlawyer.com for Josh Whitaker and Joe Hamer.

I'm Morgan Patrick. We'll see you on the radio next week. Outlaw lawyer is hosted by an attorney licensed to practice law in North Carolina. Some of the guests appearing on the show may be licensed North Carolina attorneys. Discussion of the show is meant to be general in nature and in no way should the discussion be interpreted as legal advice. Legal advice can only be rendered once an attorney licensed in the state in which you live had the opportunity to discuss the facts of your case with you. The attorneys appearing on the show are speaking in generalities about the law in North Carolina and how these laws affect the average North Carolinian. If you have any questions about the content of the show, contact us directly.
Whisper: medium.en / 2023-08-05 16:25:07 / 2023-08-05 16:51:05 / 26

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