This is a great article written by Attorney Suzanne Sayward regarding five documents that should always be reviewed by an attorney.
While the advice to “never sign anything without your lawyer” is common, the notion of having everything reviewed by an attorney is a bit extreme for most people. However, there are certain documents for which this is always highly recommended. Here are five documents you should never sign without the advice of counsel.
1. Your Child’s Apartment Lease.
It is very common for landlords to ask for a co-signer on a rental agreement when the tenants are college students or young adults leasing their first apartment. Beware! The liability of a co-signer is not limited to payment of the rent in the event the tenant defaults; it extends to all of the covenants in the lease. Most standard leases contain a provision that the tenant will “indemnify the landlord from all liability, loss or damage arising out of the tenant’s use of the property.” This means if your child hosts a party during which someone is hurt because the porch collapses, and if that injured person sues the landlord, the landlord is going to look to the tenants to indemnify him under the terms of the lease. This is also true with respect to property damage such as broken appliances, holes in walls, or water damage from an overflowing bathtub. Since most college students are high-risk occupants with few assets to back up their behavior, the landlord will be seeking redress against mom and dad as the co-signers. Also keep in mind that your liability as the co-signer is not limited to your child's actions or even your child's proportionate share of any damages. As the co-signer, you could end up on the hook for 100 percent of any liability whether the damage was caused by your child or by his roommates.
2. Purchase & Sale Agreement.
A Purchase & Sale Agreement is the formal contract signed by buyers and sellers regarding a real estate transaction. Although the title of this contract may be “Standard Form Purchase & Sale Agreement,” there is no standard agreement that is suitable for every buyer and seller. Since the purchase of a home or other real estate is most often a buyer’s biggest investment, it does not make sense to sign an agreement involving hundreds of thousands of dollars without having it reviewed by a qualified attorney who is prepared to represent your best interests throughout the entire transaction.
3. Fiduciary Bond.
Although being asked to sign a fiduciary bond is not nearly as common as the other documents discussed in this article, it is a trap for the uninformed and can result in a whole lot of trouble. A fiduciary bond is a probate court document required to be filed by a person seeking to be appointed as an executor of an estate or as a guardian for an incapacitated person. The bond is essentially the petitioner's promise to the court that she will do a good job and properly manage the assets of the estate or the assets of the incapacitated person. In some cases, the court will require “sureties” on the bond, which is similar to a guarantor. If you sign a bond as a surety you are promising the court that if the fiduciary negligently manages the estate, or worse, steals money, you will reimburse the estate for the loss. If someone asks you to sign as a personal surety on a bond, it’s imperative you consult with your attorney to review the situation and understand your potential liability.
4. Estate Plan Documents.
You can find free legal forms for everything these days, including Wills, Powers of Attorney and even Trusts. However, when you’re planning for your family's future, there is a lot at stake. It is important to take the time to consult with a competent estate planning attorney who can advise you about and prepare documents appropriate to your situation. I have been a practicing estate planning attorney for almost 25 years and I still find that every client's situation is unique in some way. Whether it’s planning for a child with disabilities, a family business, a vacation home, a parent who needs care, or rental real estate, each situation needs an estate plan that is specifically tailored to address the needs of that family. Cookie-cutter forms just don't cut it.
There is a popular idiom that defines a guarantor as “an idiot with a pen.” While it might seem obvious that if you sign as a guarantor on a loan for someone you might actually have to pay back that loan, many people seem to sign with the assumption they will not have to do so. This is a move that you could end up regretting for a long time. If you are asked to co-sign a loan, do so with the assumption that you will have to pay the loan in full. If you are not willing or able to do so, it’s important to give the situation careful consideration and realize that by signing a loan guaranty, you are not only taking a financial risk, but you are putting your relationship with the borrower at risk as well.
Attorney Suzanne Sayward is a partner with the Dedham law firm Samuel, Sayward & Baler LLC and served as the 2009 president of the Massachusetts Chapter of the National Academy of Elder Law Attorneys (MassNAELA). For more information, visit http://www.ssbllc.com/.
The original version of this article can be found at http://www.dailynewstranscript.com/news/x1526281743/5-documents-that-should-always-be-reviewed-by-an-attorney
These are all issues that could be and should be reviewed by your Personal Family General Counsel. If you encounter any of these issues and you reside in the State of California, please feel free to contact Daniel Alexander II @ My Personal Family General Counsel or (951) 737-4040 ext. 2.
