YOU HAVE QUESTIONS, WE HAVE ANSWERS!
VIVA ESCROW Q & A SEGMENT
(Real questions sent to us – verbatim!)
QUESTION:
Even though I am the only seller, the property used to belong to my mother and there is an agreement that the proceeds from the sale are to be divided equally between 4 brothers and sisters. Please issue checks to them directly as per my agreement with them.
ANSWER:
We regret to advise you that our company policy and our regulator’s requirement is that all proceeds in a transaction are to be issued only to the person or entity who shows as the owner of the property. We are unable to accede to your request. We will issue the proceeds check or the wire to you, and after you receive it, then you can disburse it to your siblings outside of our escrow.
EDUCATIONAL MOMENT:
This is a common request and we have to clarify the process under Escrow Law. Again, whoever has ownership gets the proceeds. There can be income tax consequences which we do not take responsibility for if issued incorrectly.
This is particularly important to remember when the property is in a Trust. We DO NOT issue separate checks to the Beneficiaries of the Trust. If the original Trustees are still alive, we issue it to them. If the original Trustees have passed away, we issue it to the actual name of the Trust. The same thing goes for the corporate entity. We will issue proceeds to the LLC itself, not to the Members.
In addition, we remind our clients that at closing, a 1099 reflecting the Seller’s information will be issued to the IRS for year-end income tax purposes, so it is doubly important that clients refer to their tax accountant for counsel early in the transaction or even before the transaction comes into escrow.
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~ Video of the Month ~
Have you been to the Las Vegas Sphere? Time to check it out!
Here is an animated video on its amazing construction and capabilities.
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~ Quote of the Month ~
“You have to assemble your life yourself, action by action.”
~ Marcus Aurelius, Roman Empire Emperor ~
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My YouTube Offering for the Month
When an escrow closing is contingent on other escrow closing
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You Have Questions? We Have Answers!
Juliana Tu, CSEO, CEO, CBSS, CEI, SASIP
Escrow is my FOREMOST language!
Advance Disclosure:
The opinions expressed in this blog are solely the author’s.
Your comments and viewpoints are always welcome.
Info @ VivaEscrow.com