Published on:

Selling your home is a complicated process. The Arizona Real Estate market is constantly changing.   Many things can go wrong. With a transaction valued in the hundreds of thousands of dollars, any error can be an expensive one. Unless you are a sophisticated seller, we highly recommend that you educate yourselves to the extent possible and then obtain help from experienced professionals. Here are a few things that we believe a seller should consider.

  1. Obtain a pre-listing home inspection. This will identify items that should be fixed before you put your home on the market. This is also a good time to tend to cosmetic repairs that have been neglected over the years. Your home should be generally spruced up, neat, clean and de-cluttered before you interview real estate agents.
  2. Investigate the market for similar homes in your area. Consult online services such as, or   Visit open houses in your area. Be objective about the pricing of your home. The amount you paid and the cost of your improvements are not relevant.   The most relevant data is what price similar homes in your area are actually selling for.
Published on:

Homeowners associations, or HOA’s as they are commonly referred to, are governed by Arizona Revised Statutes Title 33 Chapter 16 under planned communities. These statutes deal with various components such as Penalties, open meetings, exceptions, financial and other records to name a few. Although these statutes exist, oversight is often minimal. Most homeowners find themselves dealing with their HOA in regards to the codes, covenants and restrictions, or more commonly known as the “CC&R’s.” The CC&R’s are restrictive covenants that “run with the land” and thus, if one member sells a home he is no longer part of the association and the new owner takes his place, and is subject to the restrictions that attach as well.

All homeowners in a given development have to follow the restrictions set forth in the CC&R’s. The general purpose for HOA’s is to protect the property value of the owners. However, this often comes at the expense of abdicating rights a homeowner would otherwise have control over. Things like home color, landscaping, additional structures and even parking. HOA’s have control over most aspects of ownership and the have many methods to enforce these restrictions including the threat, or actual levying of fines, liens and legal action against an individual homeowner. Given the broad powers of an HOA to enforce its goals, an individual homeowner can be faced with a daunting task of defending themselves if the association deems them to have run afoul of the CC&Rs.

If an HOA is trying to enforce restrictive covenants on you as a homeowner, it is important to know what they can do, and perhaps more importantly, what they can’t. Most HOA’s have general review or architectural design committees charged with the task of making sure homeowners requests are in line with the CC&R’s. When an HOA seeks to enforce a restriction, it must do so in good faith and not act in a manner that is arbitrary or capricious. Moreover, the enforcement procedures must be fair and applied uniformly to all homeowners.

Published on:

The baby boomer generation is aging. Over the next decade or two there will be an enormous transfer of wealth to the next generation. This should be a good thing. The intention is good—to provide for the next generation—but actual results are often disappointing. Everyone is familiar with the statistics on lottery winners. Many lottery winners will have lost most or all of their winnings within just a few years. It is the same with inheritances. A large percentage of inheritances is quickly squandered and lost. This is tragic. Not only is the work, thrift and discipline of the previous generation discarded, but the education, retirement and dreams of their children are lost or impaired.

So what can be done to prevent the next generation from acting rashly and spending inherited funds unwisely? Unfortunately, there is nothing that can guarantee that the next generation will act responsibly. But there are some things that will certainly help. Here are a few that we have found to be helpful:

  1. All family members need to develop the discipline of saving and know the basics of investing. This is a process that ideally starts when children are small but can commence at any time.
Published on:

A reverse mortgage is a financial device where borrowers can receive money based off the amount of equity they have in their home. Reverse mortgages offer a tool for senior citizens to supplement their retirement income. To be eligible for a reverse mortgage, a borrower must be at least 62 years of age. There are also restrictions regarding the residence. To name a few: it must be the borrowers’ primary residence, it must be in good condition, it must be paid off or almost paid off and it must be a single family home.

Unlike a traditional mortgage, a borrower in a reverse mortgage receives payments instead of making monthly payments back to the lender. This is true as long as the borrower lives in the home. Payments from a reverse mortgage can be in the form of one-time upfront payments or in monthly payments to the borrower. The borrower is however, still responsible for HOA fees, property taxes and insurance on the home. The balance of the loan becomes due once the home is sold or the borrower passes away.

Reverse mortgages are an alternative means to tapping the equity a borrower has in their home. More conventional options include selling the home, refinancing or taking out a home equity line of credit. However, these options may not be available or suitable if the borrower does not wish to move or is otherwise not qualified to obtain additional financing.

Published on:

A Living Will is different from a normal Will.   A Will is a common estate planning document that controls the distribution of a person’s property after he or she dies. It is not effective until death. A living will, however, is effective during a person’s lifetime and serves a wholly different purpose.   Also known as an “advance directive” a living will allows a person, in advance, to give written instructions for medical treatment should he or she become terminally ill and be unable to communicate with a physician or family member. Most states have laws authorizing living wills/advance directives. Arizona’s statutes are found at A.R.S. §36-3201, et.seq. A sample Living Will can be found in A.R.S. §36-3262.

Medical care has become so good that life can be extended artificially for long periods. Physicians often opt to extend life where possible, but this may not be what a patient wants. Few of us want our lives to be artificially extended where we are terminally ill with no chance of recovery. Most want to be allowed to die with some dignity.   This is where a living will comes in.

A Living Will provides a means to control the medical procedures provided to you at a time when you cannot speak for yourself.   In most cases, this amounts to a description of what services are not wanted in the event of a terminal illness. Often, people opt for “comfort care” with instructions that they are to be medicated to be free from pain but other life extending procedures such as feeding tubes, blood transfusions, cardio-pulmonary resuscitation and similar services are rejected. In other cases, patients may wish to preserve life as long as possible using current technology. A Living Will can also be drafted with this goal in mind.

Published on:

These days, it is not uncommon for mortgages to be sold or transferred. Many mortgages start out with one company and are almost immediately transferred to a different bank or loan servicing agency. In fact, most homeowners who finance through a mortgage, are probably not paying the same company who originally provided the loan. You may be asking yourself, why does this happen, and how does it affect the average homeowner?

Anyone who has applied for a mortgage can attest to the fact there is no shortage of paperwork to fill out during the process. Very few people actually take the time to read the fine print. In fact, most simply verify the important terms then sign and initial as applicable. However, in most, if not all mortgage contracts, there is a clause stating whether or not their mortgage will be sold or transferred. This language is required by Title 12 Chapter 27 § 2605 of the U.S. Code.

Generally speaking, there are two parts of a mortgage that can be transferred or sold. The two components do not even have to be owned by the same company. However, to most homeowners the distinction is non-existent except in name. The first component is the actual mortgage, also called the note. The note is what sets forth the terms of loan, including the amount owed and when. The note is almost always secured by a deed of trust on the physical property. In Arizona, this is what allows banks to foreclose on homeowners who fail to pay their mortgages. This is what’s known as a non-judicial foreclosure.

Published on:

Clients give a great amount of thought to the transfer of wealth when drafting a revocable living trust. Of course, this is one of the most important reasons to create a trust—to transfer wealth as efficiently as possible without probate and with the minimum estate tax possible.

But there are other issues that often do not get the attention they deserve. Here are a few of them:

  1. Appointment of a Guardian.   Parents will usually appoint a guardian for their minor children in the event that both become disabled or deceased. However, thought might also be given to appointing a guardian for themselves in the event a guardian is needed later in life. A guardian, if needed, will control all aspects of your life. Your instructions as to who this person will be are important.
Published on:

Revocable living trusts have long been an important tool to minimize estate taxes and avoid probate. But these benefits are realized after a death. Growing in importance as the baby boomer generation ages are the benefits a Living Trust can provide long before death. A fully funded Revocable Living Trust can help prepare for the aging process and the cognitive disorders that many elderly experience.

In the normal case a husband and wife creating a Living Trust (the Trustors) name each other as co-trustees and choose a child or a relative to be their successor trustee—the person who takes over management of the Trust when the original Trustors die or become disabled.   This works fine until the Trustors can no longer manage their finances.   Then the nominated successor trustee takes over. Results will vary widely depending upon the skill and honesty of the person chosen for the job. Most successor trustees will do their best.   But many have been chosen because of a relationship—e.g. a firstborn child—and not for his or her competence. Such a trustee may have no concept of what it means to be a fiduciary and might have no experience in managing significant assets. Or, worse, a successor trustee may find it impossible to withstand the temptation of “borrowing” money from the estate or using estate assets for their personal needs. These successor trustees can commit substantial financial abuse and can ruin a lifetime of prudent financial planning. In our practice we have often seen that a child is responsible for the financial abuse of a parent.

In planning for older age, there are some steps that can be taken to minimize this risk. Creating a Revocable Living Trust is a good first step.   Then it should be funded it as fully as possible to place all possible assets under the protection of your nominated successor trustee.

Published on:

One of the most important purposes of incorporating or creating a Limited Liability Company is obtaining the benefit of limited liability.   Losses are limited to the assets belonging to the corporation or LLC.   Personal assets are protected.

This benefit can be lost. The corporate veil can be pierced and the shareholders can have personal liability where two requirements are met.   First, the corporation is determined to be the alter ego of one or more individuals. Second, the observance of the corporate form would sanction a fraud or promote injustice. Arizona Courts have defined “alter ego” as a situation where there is such a unity of interest that there is no separation between the corporation and the person controlling its actions.   This can be found where a shareholder runs the corporation in such a manner that there is a confusion of identities between the corporation and other business activities of the shareholder. Alter ego will also be found where a shareholder misuses the corporate existence to his or her own advantage and treats corporation property as his or her own property as if no corporate identity existed.

Some of the circumstances that may result in personal liability for shareholders can be:

Published on:

One of the best parts of practicing law is performing well in Court and obtaining a Judgement in favor of a Client. Once Final Judgment is obtained the next step is to collect.   Sometimes this is a straightforward process; the traditional remedies of garnishment and execution produce results and the judgment is satisfied.   Many times, however, it is not so easy.   An investigator may be needed to locate income and non-exempt assets from which the judgment can be paid. The investigator must search not only for assets that are currently owned but also for assets that were formerly owned. Transfers by a judgment debtor need to be carefully scrutinized. It is common for debtors to try to protect assets by transferring them out of their personal names.   Where a transfer is fraudulent, the asset transferred can often be recovered.

Arizona’s Uniform Fraudulent Transfer Act is found at ARS 44-1001 et. seq.   Essentially, Arizona’s law states that a transfer is fraudulent as to a creditor if it was made with the actual intent to hinder, delay or defraud. A transfer is also fraudulent if it was made without receiving a reasonably equivalent value in exchange and the transferor was either insolvent at the time or was rendered insolvent as a result of the transfer.

When a transfer has been shown to be fraudulent, a creditor has many remedies. A creditor can seize the asset transferred by a garnishment against the fraudulent transferee or by an attachment against the asset transferred. A separate action can be filed to avoid and reverse the transfer and a receiver can be appointed to take charge of the asset transferred.