Less than two months after signing into law amendments to Arizona's existing anti-deficiency statute, Arizona Governor Jan Brewer signed legislation repealing those changes.
The statute (A.R.S. § 33-814(G)) provides residential property owners security from personal liability for loans on foreclosed property sold in a trustee sale. As long as the property was less than 2.5 acres of land and used as a single one- or two-family unit, lenders have no legal recourse in Arizona to collect a deficiency amount, which is the difference between the balance of the loan and the amount the property was sold for in foreclosure.
The amendments to this statute (SB 1271), which were to become effective September 30, 2009, would have drastically changed protection for investors, says attorney Charlotte Johnson of Gibson Ferrin & Riggs, PLC.
Under these amendments, only borrowers who have lived on the property for at least six months and been issued a certificate of occupancy would be provided anti-deficiency protection should the property be foreclosed, she explains.
"Unless investors could prove they had occupied the completed residence for at least six consecutive months, the statute, in most cases, would not have protected them from collections," says Johnson.
The new requirements were causing widespread panic among Arizona investment property owners, she says.
"Several investors have contacted me over the last month worried that they were going to be sued because they were falling behind in their mortgage loan payments," she says.
Others were also worried about the impending effects of the legislation.
In July, soon after the bill was signed into law, the Arizona Association of Realtors called upon Governor Brewer to amend her call for a special session of the legislature to discuss state budget issues to also address issues pertaining to the passage of SB 1271.
"SB 1271 dramatically alters well settled Arizona law on the relationship between Arizona residential real estate owners and their lenders. Undoubtedly, those who voted in favor of this legislation could not have known about its far reaching legal and practical impacts," stated the letter that was signed by CEO Tom Farley. He listed that effects of the amended statute could include a dramatic increase in foreclosures, litigation, falling real estate prices and a prolonged recession in the state.
Apparently, lawmakers agreed.
Just one week after Mr. Farley asked the legislature and governor to reconsider, Senator Steve Pierce, R-Prescott, once a sponsor of SB 1271, announced his support for the bill to be revoked.
According to a press release from his office, Sen. Pierce indicated that the bill was "intended to protect community banks," but "has some serious flaws." The sparsely-worded legislation left a great deal of confusion and uncertainty, he said.
Lawmakers acted to repeal the legislation and to fix the problem they had created.
"With SB 1271 repealed, the anti-deficiency safe harbor is back in place," says Johnson. "Arizona residential property investors can rest easy, for now."
However, Sen. Pierce indicated that he, the governor and other interested parties still intend to collaborate on a better solution for the problem.
Call attorney Charlotte Johnson at 480-633-8100 with any questions concerning Arizona's anti-deficiency law or to schedule a confidential and comprehensive consultation. For more information, see Arizona HB 2008, 49th Legislature, Third Special Session (2009), or Arizona Revised Statutes § 33-814(G).
The attorneys at Gibson Ferrin & Riggs, PLC concentrate their practice on serving individuals, families and small business owners with business-related issues, family law and estate planning. They can help identify and assess the interests that matter most to their clients and work to preserve, protect and promote them. Visit their website at www.gfrlegal.com and their blog at www.biziboom.com. The firm's expertise in commercial litigation and business, family and estate law is recognized throughout the Phoenix / Mesa area.
Showing posts with label Arizona Lawyers. Show all posts
Showing posts with label Arizona Lawyers. Show all posts
Thursday, 1 October 2009
Tuesday, 22 September 2009
Mesa / Phoenix Law Firm Emphasizes the Importance of Timely Estate Planning
Most people procrastinate estate planning until they near retirement age; however, life always involves the unexpected and failure to create and regularly update an estate plan may result in a loss of a significant portion of an estate to taxes, probate costs and litigation expenses. It can also result in loved ones not getting what they were intended to receive.
"Every adult 18 years of age and older who has a bank account, a home, a retirement account or other assets should review the need for an estate plan with a qualified attorney," says Michael L. Ferrin, founding partner of the law firm of Gibson Ferrin & Riggs, PLC.
"Estate planning is the accumulation, preservation, and distribution of your assets," says Ferrin. "A good estate plan should reduce tax liability, protect assets from creditors, promote financial well being and security and leave a legacy for those you love."
Ferrin, whose expertise includes various types of trusts, wills, powers of attorney and family limited partnerships, explains that the type and complexity of the estate plan may vary greatly depending on factors such as the value of the estate, types of assets held, marital and family issues, age and other factors, but almost every adult needs some level of planning.
"Estate planning can be a complicated and sometimes confusing process," he adds. "That is why it is so important to have trusted professionals assisting you with this important process."
Ferrin points out that beneficiaries of a well-prepared estate plan will gain tax savings, convenience and asset protection, but the greatest benefit to a person may be the peace of mind in knowing that her or she has provided for family members and loved ones.
"Don't put if off," Ferrin cautions.
"A friend of our law firm who provided technical support services to us over the years would often stick his head in my office and say, 'I need to come in and see you so you can help me with a trust.' I would tell him, 'I would be happy to help you any time you are ready,'" Ferrin relates. "About a year ago he said to me, 'I am leaving on vacation with my wife, but when I return we are going to come see you for a trust.' 'I will look forward to it,' I replied. Unfortunately, the couple was killed in a head-on collision with a drunk driver while returning from that vacation. The family was completely unprepared for this event, and the family went through a great deal of expense, stress and turmoil as a result."
"We, unfortunately, do not usually know when it is our time to go," he says. "We just know that eventually the time will come, and it is critical that we be prepared when it does. The time to start working on an estate plan is now."
Ferrin notes that once a person has an estate plan in place it is important to regularly review and update it to make sure it is still applicable.
"If you experience any major life changes - marriage, divorce, and birth of a child or death of a spouse or child - update your estate plan immediately," he says. "Generally, any change in your personal, family, financial or health situation or a change in the tax laws, could prompt a change in your estate plan. It's a good idea to review your estate plan every year. Set aside a specific time every year (birthday, anniversary, family gathering) to review it."
To help with the important task of estate planning, Gibson Ferrin & Riggs offers a free, 30-minute consultation to determine what type of plan is best for individual needs.
In the consultation, attorneys will explain the advantages and disadvantages of different estate planning techniques, what fees are involved in setting up the various types of estate plans and help work out a convenient payment plan if needed.
Call attorney Michael L. Ferrin at 480-633-8100 to schedule a confidential and comprehensive consultation.
The attorneys at Gibson Ferrin & Riggs, PLC concentrate their practice on serving individuals, families and small business owners with business-related issues, family law and estate planning. They can help identify and assess the interests that matter most to their clients and work to preserve, promote and protect them. Visit their website at www.gfrlegal.com, visit their blog at www.biziboom.com, and download the e-book "Ten Fatal Mistakes that Business Owners Make (And How to Avoid Them)" by founding partner Scott F. Gibson, at www.gfrlaw.net/firmpublications.aspx. The firm's expertise in commercial litigation and business, family and estate law is recognized throughout the Phoenix / Mesa area.
"Every adult 18 years of age and older who has a bank account, a home, a retirement account or other assets should review the need for an estate plan with a qualified attorney," says Michael L. Ferrin, founding partner of the law firm of Gibson Ferrin & Riggs, PLC.
"Estate planning is the accumulation, preservation, and distribution of your assets," says Ferrin. "A good estate plan should reduce tax liability, protect assets from creditors, promote financial well being and security and leave a legacy for those you love."
Ferrin, whose expertise includes various types of trusts, wills, powers of attorney and family limited partnerships, explains that the type and complexity of the estate plan may vary greatly depending on factors such as the value of the estate, types of assets held, marital and family issues, age and other factors, but almost every adult needs some level of planning.
"Estate planning can be a complicated and sometimes confusing process," he adds. "That is why it is so important to have trusted professionals assisting you with this important process."
Ferrin points out that beneficiaries of a well-prepared estate plan will gain tax savings, convenience and asset protection, but the greatest benefit to a person may be the peace of mind in knowing that her or she has provided for family members and loved ones.
"Don't put if off," Ferrin cautions.
"A friend of our law firm who provided technical support services to us over the years would often stick his head in my office and say, 'I need to come in and see you so you can help me with a trust.' I would tell him, 'I would be happy to help you any time you are ready,'" Ferrin relates. "About a year ago he said to me, 'I am leaving on vacation with my wife, but when I return we are going to come see you for a trust.' 'I will look forward to it,' I replied. Unfortunately, the couple was killed in a head-on collision with a drunk driver while returning from that vacation. The family was completely unprepared for this event, and the family went through a great deal of expense, stress and turmoil as a result."
"We, unfortunately, do not usually know when it is our time to go," he says. "We just know that eventually the time will come, and it is critical that we be prepared when it does. The time to start working on an estate plan is now."
Ferrin notes that once a person has an estate plan in place it is important to regularly review and update it to make sure it is still applicable.
"If you experience any major life changes - marriage, divorce, and birth of a child or death of a spouse or child - update your estate plan immediately," he says. "Generally, any change in your personal, family, financial or health situation or a change in the tax laws, could prompt a change in your estate plan. It's a good idea to review your estate plan every year. Set aside a specific time every year (birthday, anniversary, family gathering) to review it."
To help with the important task of estate planning, Gibson Ferrin & Riggs offers a free, 30-minute consultation to determine what type of plan is best for individual needs.
In the consultation, attorneys will explain the advantages and disadvantages of different estate planning techniques, what fees are involved in setting up the various types of estate plans and help work out a convenient payment plan if needed.
Call attorney Michael L. Ferrin at 480-633-8100 to schedule a confidential and comprehensive consultation.
The attorneys at Gibson Ferrin & Riggs, PLC concentrate their practice on serving individuals, families and small business owners with business-related issues, family law and estate planning. They can help identify and assess the interests that matter most to their clients and work to preserve, promote and protect them. Visit their website at www.gfrlegal.com, visit their blog at www.biziboom.com, and download the e-book "Ten Fatal Mistakes that Business Owners Make (And How to Avoid Them)" by founding partner Scott F. Gibson, at www.gfrlaw.net/firmpublications.aspx. The firm's expertise in commercial litigation and business, family and estate law is recognized throughout the Phoenix / Mesa area.
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