Bank Over Draft Fees

There’s one ‘surprising similarity’ between those who pay bank overdraft fees and those who avoid them

Published: Jan. 11, 2022 at 5:20 p.m. ETBy Andrew Keshner1

Bank of America plans to end its $35 ‘non-sufficient funds’ fees next month, and will drop overdraft fees to $10 from $35

The banking industry took in $15.47 billion in overdraft and non-sufficient funds in 2019, according to the Consumer Financial Protection Bureau.SCOTT OLSON/GETTY IMAGES

Are you still paying overdraft fees?

Bank of America BAC, +0.57% said Tuesday it plans to end its $35 “non-sufficient funds” fees next month, and will reduce overdraft fees to $10 from $35, starting in May. Non-sufficient fund fees occur when a payment bounces. Overdraft fees occur when consumers withdraw more than the agreed amount.

But there’s a long way to go. The industry took in $15.47 billion in  overdraft and non-sufficient funds in 2019, according to a report released last month from the Consumer Financial Protection Bureau. Bank of America, J.P. Morgan Chase JPM, +0.10% and Wells Fargo WFC, +1.28%accounted for approximately 44% of those fees, it said.nullAdvertisement

Some people are still dependent on overdrafts, despite the often high fees. Nearly one-fifth (18%) of consumers with a bank or credit union said they were dinged with an overdraft fee in December, an increase from 14% in August, according to a Morning Consult poll released Tuesday.

Overdrafters are disproportionately millennials, parents and those experiencing income volatility.

“One surprising similarity between overdrafters and the general population is their income levels,” the report said. “Those who overdraft are about as likely to report annual household income of more than $50,000 and slightly more likely to report annual household income of more than $100,000.”

Of those who said they pay overdraft fees, half were millennial consumers and 47% were parents with kids under age 18. Almost two-thirds (58%) of overdrafters in the poll made less than $50,000, while 27% made between $50,000 and $100,000 and 16% made above $100,000 a year. But they do tend to share one common trait: volatile income streams.

“More than one in five adults (21%) who have overdrafted since August also reported receiving a payday loan, and roughly the same share reported either purchasing a money order or cashing a check through a provider other than a bank or credit union,” Morning Consult added. That’s more than double the rate of the general population.

BoA’s decision “will provide much-needed relief for customers who least can afford the burden of overdraft fees, and should lead other financial institutions to drop these fees that disproportionately impact low-income, Black and Latino Americans,” said Mike Calhoun, president of the Center for Responsible Lending.

Bank of America shares are up more than 48% in the past 12 months. The Dow Jones Industrial Average DJIA, +0.51% is up nearly 17% in that time and the S&P 500 is up roughly 23% in that time.


The ‘Catch-22’ That Holds HBCUs Back From Being A CRE Feeder System

NationalEmployerAugust 30, 2021 Matthew Rothstein, Jarred Schenke, and Bianca Barragan

The commercial real estate industry is aware of its lack of racial diversity, and many of its biggest companies say they are working to grow the pipeline of people of color into the business. But one oft-cited source of potential employees doesn’t have the infrastructure to support that pipeline at present — not even close.

A review of current course catalogs from each of the accredited Historically Black Colleges and Universities found that none have a real estate major or concentration for bachelor or graduate degrees. Only 26 offer real estate-specific classes for credit, at least four offers non-credit continuing education classes, and two historically Black community colleges offer vocational programs in real estate.

The Hundred-Seven, an HBCU-focused nonprofit, lists three schools as offering real estate programs on its website: Lawson State Community College, which offers a vocational certificate, and Allen University and St. Augustine’s University. Allen doesn’t list any real estate programs or courses on its catalog; representatives for the school didn’t respond to requests for comment.

St. Augustine’s eliminated its real estate program in 2017, the dean of the school of business, management, and technology, Van Sapp, told Bisnow.

“Many of our students are unaware of commercial real estate opportunities,” he wrote in an email.

It comes as no surprise to Jeffrey Molavi, the interim chair of the University of Maryland Eastern Shore’s Department of the Built Environment, that most HBCUs don’t offer real estate programming. Black families have historically been frozen out of the generational wealth-building afforded White households through homeownership and investment in real estate, and HBCU course offerings are a reflection of the perceived pathways to upward mobility in an economy that still carries the legacy of systemic racism.

“Most African American students don’t like the sales position,” Molavi said. “And this is my opinion: The sales position is based on the social and economic structure of the country and culture. So they want to work in a place where they’ll be recognized and get steady paychecks. So in my opinion, real estate is not very popular among African American students.”

For HBCUs, which have been chronically underfunded, starting new courses is an expensive proposition. The schools focus what resources they have on expanding their offerings in subjects with a clearer pathway to jobs and/or demonstrated interest from incoming students. 

“Nothing is free. It costs money to set up courses,” National Historically Black Colleges & Universities Foundation President Ty Couey said. “And then there’s always that gamble that students may not be interested. So it’s like a Catch-22.”

For HBCUs to establish themselves as an industry feeder system, they would require participation on a wider scale and more consistent basis from commercial real estate companies than the industry has ever demonstrated in the service of improving diversity among its ranks, multiple HBCU alumni who work in commercial real estate told Bisnow

“I would argue, whatever time, money, resources that you’re committing to Harvard Business School or Wharton or whatever place you think you’re mining superior talent for your company or industry, if you were to try and do the same thing with an HBCU, you could probably get similar results,” said Michael Banner, president and CEO of Los Angeles LDC, a nonprofit community development financial institution. 

How Should Partners Buy Real Estate

Food for Thought

I own a home with my ex-husband. He agreed to pay my half of the mortgage. In the final judgment, the judge said I should “keep” the property we owned in Fla., and my ex should “keep” the Tampa home.

He ultimately short sold the Tampa property without my signature or approval, even though it was marital property. I have lived in this property for 30 years — 15 with my ex and 15 since the separation and divorce.

I thought “keep” meant keep, and the judge who is presiding over the lawsuit my ex has brought to partition the property agreed.

However, the first judge did not include the legal description of the property. Therefore, it was not a legal conveyance, and the second judge ordered the partition of the property, summary judgment.

Do I have any rights? The house was part of my settlement. I understand that it gets partitioned, but shouldn’t I be allowed to keep the proceeds from the sale? This house was where I was going to live in retirement.

Welcome, Home!

I have remodeled and maintained this property on my own, and all of the insurance claims paid out went to him because he was the one in the mortgage. He kept this money and never used it to repair my home.

I am a senior and cannot afford to take on a mortgage. Don’t I at least have squatter’s rights? Can I bring legal action against the title company who facilitated the sale of the Tampa marital property, without my permission?

Dear Senior,

A financial expert once told me that going through a divorce is like your own personal recession. He could list stories where the dissolution of a marriage had major financial consequences. I’ve even interviewed a woman who said her divorce cost her around $1 million in retirement savings — the experience even inspired her to become a financial analyst who specializes in divorce cases.

I mention all of this to underscore that you’re not alone in feeling like you were wronged by your ex-husband — and that the precarious financial state you’re now in is unfair or unjust. That, however, doesn’t necessarily mean that he’s done anything wrong, or that the judge made the wrong decision.

Florida state law spells out that, in a divorce, marital assets are to be divided equitably. But equitable doesn’t always mean equal. In many cases, yes, assets will be split 50-50. But there can be situations where a judge may decide that splitting the marital property in half isn’t fair. That might be the case here, though without reviewing the divorce documents it’s not possible to know for sure.

Florida state law spells out that, in a divorce, marital assets are to be divided equitably. But equitable doesn’t always mean equal.

If the first judge spelled out that the Tampa property would go completely to your ex-husband, he may have been within his rights to sell it without your consent. That said, it sounds as though the second judge revised the terms of the divorce settlement, and reassessed how the property you two mutually owned in your marriage would be divided.

However, if you believe that the second judge erred in revising the settlement, or that your husband sold the Tampa home without receiving proper consent to do so, you could consider pursuing an appeal or other legal action. I will warn you, though, that there maybe a time limit within which this appeal must be recorded. Either way, you should consult your own attorney to determine what options you have.

Bottom line: If the second judge did partition the home you’re currently living in — and their opinion stands — you should get a portion of the proceeds of any sale that were to occur. If the home was portioned in half, you would receive half the proceeds. In this scenario, your ex-husband could attempt to force the sale through the court. Otherwise the two of you could seek to maximize your profit from the sale.

The definition of who qualifies as a squatter varies from state to state.

Just because you live in the home does not necessarily mean you have squatter’s rights.

“A squatter is anyone who begins to inhabit a piece of property or land without the legal right to do so; In other words, they are not renting the property from the owner (where landlord-tenant law comes into play) and they do not have permission to use it.”

The definition of who qualifies as a squatter varies from state to state. In Florida, a person must meet specific requirements to qualify as a squatter under so-called “adverse possession” laws. For instance, one condition squatters in Florida must meet is hostile possession, meaning that they did not have permission from the property’s owner to live in it, according to TrustHome Properties.

By consulting an attorney, you could determine whether you might qualify for protection as a squatter.

By consulting an attorney, you could determine whether you might qualify for protection as a squatter. They could also advise you as to whether it would be worth pursuing legal action, whether that be against your ex-husband, the title company associated with the sale of the Tampa home or the judge who neglected to record the terms of your original divorce settlement properly.

And you decide to approach lawyers about such a case? Tread with caution. Don’t hire someone because they’re saying what you want to hear. Feel free to get a second or third opinion, but if you are advised by multiple attorneys against pursuing legal action then you may want to trust their judgment on the matter.

Consider hiring a financial adviser who could guide you through this volatile time in your life. It worries me that you don’t seem to have the means to cover the cost of housing and other necessities. If your current home is ultimately sold and you receive some sort of profit, what you do with that money could determine how financially protected you are in the future. That could mean putting it toward the down payment on a new home, investing it or saving it to use for future rent payments.

I can only imagine how stressful and unsettling this all has been for you. Allow yourself to feel those emotions now, so that you can make these next crucial decisions with a clear mind. wishing you the best of luck as you navigate these hurdles.

The Importance of Understanding Interest

The Importance of Understanding Interest

It’s one thing to know what interest is. It’s another to truly understand how interest works. Understanding interest is so important because it can have a considerable impact on your entire financial picture.

The most important thing to know about interest is that not all types are created equal. The way you calculate interest can drastically alter the results. Taking that into account, let’s discuss the two main types of interest:

1. Simple or Nominal Interest

When you learned about interest in school, simple interest was probably the kind you were first taught. The amount of simple interest is calculated as a percentage of the principal amount. Put another way, with simple interest, the principal amount upon which the interest is calculated is constant.

This is easy to understand when your think about a savings account. Say you deposit $10,000 with an annual interest rate of 5%. Now let’s say you let that $10,000 sit there for 5 years. What would the new amount be? If you said $12,500, then you would be correct. Our deposit (the principal) earned $500 (5% of 10,000) each year for five years. That leaves us with $12,500.

2. Compound Interest

Remember how with simple interest the amount upon which interest is calculated stayed the same (every year it was based on $10,000)? Well, with compound interest, that amount continues to accumulate on itself. Compound interest is calculated based on the principal amount and any past interest earned.1 The earned interest is simply added to the original principal amount at a predetermined rate (annually, monthly, etc.).

Compound interest might be better understood by example. Let’s look back at our savings account scenario once again. This time, however, let’s say at the end of each year your earned interest is added back to the original principal amount. After year 1, just like with simple interest, you would have earned $500 in interest. This time, though, the difference is that $500 is now added to the $10,000. So the following year’s principal becomes $10,500 and that year’s interest is calculated based on that new figure. This process repeats itself every year for 5 years. At the end of 5 years, with interest compounding at a yearly rate, we would actually end up with $12,763, leaving us with $263 more than simple interest.

$263 is hardly an impressive extra profit but hold that thought. Let’s say you let that $10,000 sit for 10 years instead of 5. In that case, the simple interest would leave you with $15,000. On the other hand, compound interest would leave you with $16,288. That’s an extra profit of $1,288! As you can see, allowing compound interest to build and grow over a longer period of time can make a big difference.

Just ask Warren Buffett how powerful compound interest can be:

“My wealth has come from a combination of living in America, some lucky genes, and compound interest.” — Warren Buffett2

Most of us are not Warren Buffet. The beauty of compound interest, though, is that anyone can take advantage of its financial power. Whether you have a mortgage, are repaying student loans, or even depositing money in a bank account, interest has the power to add to your debt or help build your savings. Knowing what interest is won’t help you truly take advantage. Rather, it’s understanding how it can best work for you.1
Life Events

Quit Claim Deed In Alabama

QuitClaim Deed in Alabama

What You Need To Know

If you’d like to give up your interests in real property to your spouse or your ex-spouse; or if you’d like to gift your property to a family member for rental use or any other use, the statutory laws in Alabama require you to sign a document called a quit claim deed.

What is a quit claim deed?

A quitclaim deed (quitclaim form, non-warranty deed, or quitclaim) refers to the legally binding document that releases an individual’s interest in a named property. The document does not, however, state the nature of the person’s interest/ right in the property. And it doesn’t carry warranties of the individual’s rights or interests in the property. The other condition of the quitclaim deed is that it neither guarantees nor states that the party relinquishing their interests/ claim to the named property owned the valid ownership rights to the property. The person who relinquishes their interests or rights to the property is the grantor while the person who receives the interests is the grantee.

The deed will, however, prevent the grantor from coming back to claim the interests they’ve given up. Therefore, you could think of the quitclaim deed as the document that officially recognizes the fact that the grantor has given up their interests in named real property; protecting the grantee (to a small extent) from being stripped of the rights.

The Difference Between the QuitClaim Deed and the Warranty Deed

When it comes to the transfer of rights or interests in real property from one party to another, the law allows the use of specialty or the general warranty deeds as well as the quitclaims. These documents differ from each other in some ways.


Unlike the warranty deeds, the quit claim deeds do not carry any warranties, only working to release or convey a grantor’s interests in property to the grantee. If the grantor owns the property, he or she gives the grantee the claim deed to show that they’ve transferred their interests in the property.

What this means is that the use of the quit deed could be risky if the grantor does not own rights to the property whose interests they are transferring.

Uses of the Claim Deed

  • A quit claim deed in Alabama has several legal uses, particularly in property transfers. Some of the uses that could be listed in the deed claim form include:
    • The transfer of property into a Trust or a living trust
    • To indicate a change in name affecting an existing deed
    • Transfer of property to a business or an entity
    • When asked to resolve cloud on a title by the title company
    • When changing the details of the marital property
    • Transferring interests to someone else who will co-own the property with current owners
    • Removing a grantee from a deed

If the circumstances/ uses listed above represent actions you wish to take, you should consider downloading your copy of a free Alabama quit claim deed form. The non-warranty deed form will guide you in transferring or the conveyance of your interests in property to someone else.

For the document to be legally binding, it must be meet some requirements.

  • Requirements for valid quitclaim form
    • The transfer/ conveyance needs to be in writing; on a parchment or paper
    • It must be marked or signed by the grantor. In the absence of the grantor, it should be signed or marked by authorized personnel.
    • It must have the grantor’s name, address, as well as their marital status; this is according to the legal provisions of Code 35-4-20.
    • The law also indicates that for a married grantor in ownership of the property under the spouse facilitating the transfer, then the only signature required for rights/ interests conveyance is the grantors.
    • But, the quitclaim form must have the signatures of both spouses if the property whose interests are being conveyed is homestead property, the other spouse’s status of property ownership notwithstanding.
    • Regarding non-homestead property transfers, the state requires a recital which states that the named property on conveyance does not belong to the grantor.
    • The statutes also require that the deed form carries the exact description of the property. These details include reference to any past recording.
    • The form must have the name of the grantee along with their address, and necessary vesting details.
    • According to the state laws under Ala. Code 35-4-110, 113), the form must have a written statement with the name/ address of the party preparing the quitclaim form.
    • For validity, the form must also carry a statement from an independent witness. Alternatively, the form should have an acknowledgment from a notary public or any other party licensed to acknowledge oaths.
    • The statute is also clear on something else: that while an acknowledgment is enough for grantors able to write, there should be a witness present for a grantor who is unable to write.

Choice of words

The Alabama quitclaim form doesn’t provide any warranties. Therefore, under the form’s warranty clause section, the terms ‘Sell,’ ‘Bargain’ or ‘Grant,’ shouldn’t be used.

These words have implied warranties as per the statutory provisions of Code 35-4 271. Acceptable words/ phrases include “release quitclaim,” or “quitclaim then convey.’

Finally, the deed should be recorded, preferably with probate based in the county that the property is located – Ala. Code 35-4-50. And for purposes of recording, the county might call for extra information, specific formatting, tax forms, and other documents.

Would you like to transfer your interests in property to a loved one or a business entity in Birmingham, Huntsville, Montgomery, Mobile, Tuscaloosa, Auburn, Dothan, Anniston or any other city in Alabama? Download our free quitclaim deed form today to get started.

What Do You Think?

Throughout history, individual acts of defiance have proved to be incredibly powerful. It takes courage to stand alone, but brave individuals often galvanise movements of people who come together and change the world.

Here are some of those moments to inspire you, and remind you that one person, one voice or one action can have a big impact.

1. Salt March led by Gandhi, India, 1930

Salt march led by Mohandas Gandhi, India, 1930

Photo: Pixabay

“We need to be the change we wish to see in the world.” – Gandhi

When India was a British colony, the British Raj imposed a hefty tax on the import of salt. This affected all Indians regardless of wealth or class, and so had the power to galvanise millions.

The Salt March attracted worldwide attention and sparked a desire to fight for independence within the country. During the speeches he gave over 24 days of the march, Gandhi encouraged followers to boycott salt by making their own. Gandhi was later arrested, but the protest against salt continued during his incarceration. He continued his fight for Indian independence, which came in 1947.

2. Rosa Parks and the Montgomery Bus Boycott, USA, 1955

Photo: Wikimedia Commons

Photo: Wikimedia Commons

“Stand for something or you will fall for anything. Today’s mighty oak is yesterday’s nut that held its ground.” – Rosa Parks

On 1 December 1955 in Alabama, Rosa Parks decided to defy racial segregation rules by not giving up her seat for a white passenger when asked. Her actions sparked the Montgomery Bus Boycott, designed to put enough economic pressure on the city to listen. The campaign was so successful, it led to the desegregation of buses by the US Supreme Court. Rosa’s defiance changed the course of civil rights in American history.

3. Emily Davison’s protest for suffrage at the Epsom Derby, United Kingdom, 1913

“Emily Davison clung to her conviction that one great tragedy, the deliberate throwing into the breach of a human life, would put an end to the intolerable torture of women. And so she threw herself at the King’s horse, in full view of the King and Queen and a great multitude of their Majesties’ subjects.” – Emmeline Pankhurst

Emily Davison was a women’s suffrage activist. She was imprisoned nine times, and endured force-feeding while on hunger strike. In 1913, her protest at the Epsom Derby resulted in her death, as she was trampled by King George V’s horse. She died of her injuries in hospital four days later. Her intention for the protest has always remained unclear, but she is remembered as a symbol of the struggle undertaken for the right for women to vote.

4. Tommie Smith and John Carlos Olympic protest, Mexico, 1968

Photo: Flickr/pds209

Photo: Flickr/pds209

“If I win, I am American, not a black American. But if I did something bad, then they would say I am a Negro. We are black and we are proud of being black. Black America will understand what we did tonight.” – Tommie Smith

This photo has been deemed one of the most powerful images in Olympic history. After winning gold and bronze medals in the Men’s 200m Finals, Americans Tommie Smith and John Carlos raised their fists during the national anthem as a political gesture for human rights. Australian silver medalist Peter Norman wore a human rights badge in support.

5. The Unknown Rebel at the Tiananmen Square Protests, China, 1989

“Why are you here? My city is in chaos because of you.” – Tank Man’s words to the tank driver, according to reports

No one knows the identity of this man, who stood in front of army tanks the morning after the 1989 Tiananmen Square Protests. In this act of defiance, “Tank Man” was filmed standing in front of the tanks, and as they tried to move around him, he stepped to block their way. The unknown rebel was able to grind a column of tanks to a halt – a reminder of how small actions can have epic impact.

6. The Self-Immolation of Thích Quảng Đức, Vietnam, 1963


As he burned he never moved a muscle, never uttered a sound, his outward composure in sharp contrast to the wailing people around him.” – David Halberstam, Eyewitness

Buddhist monk Thích Quảng Đức set himself on fire in 1963 to highlight the persecution of Buddhists by Ngô Đình Diệm in South Vietnam. He used his last words to call on others to organise in solidarity. Images of his protest were circulated around the world and put pressure on the international community to reconsider support for Diệm. Images of Thích Quảng Đức’s protest have been deemed some of the most powerful in history.

7. Aung San Suu Kyi under house arrest, Burma, 1989 – 2010

Aung San Suu Kyi speaks to supporters after her release from house arrest, 2010. Photo: Wikimedia Commons

Aung San Suu Kyi speaks to supporters after her release from house arrest, 2010. Photo: Wikimedia Commons

“Last month I was released from almost six years of house arrest. The regaining of my freedom has in turn imposed a duty on me to work for the freedom of other women and men in my country who have suffered far more – and who continue to suffer far more- than I have.” – Aung San Suu Kyi after brief release in 1995

Aung San Suu Kyi spent a total of almost 15 years under house arrest, following her electoral win in the 1990 Burmese general elections, as the opposition. This meant being separated from her husband, Dr. Michael Aris, who died of cancer during her incarceration, and her two children. She was released from house arrest on 13 November 2010, and has stated since that she plans to run for the presidency of Myanmar’s (Burma) 2015 elections.

8. Taslima Nasrin’s exile in India from Bangladesh, 1994 – present

Photo: Flickr/

Photo: Flickr/

”Come what may, I will continue my fight for equality and justice without any compromise until my death. Come what  may, I will never be silenced.” – Taslima Nasrin

Taslima Nasrin is a Bengali author and former physician, who was forced to live in exile after publishing her novel Lajja in 1993. The novel examines religious extremism and the tension between Muslim and Hindu communities in Bangladesh.  She has also written from personal experience about sexual abuse and women’s rights.  Several of her books remain banned in Bangladesh. Despite her exile, she has continued to write about freedom of thought and women’s equality.

9. Corazon Aquino and the People Power Revolution, Philippines, 1986

Corazon Aquino swears in as President of the Philippines, February 25, 1986. Photo: Wikimedia Commons

Corazon Aquino swears in as President of the Philippines, February 25, 1986. Photo: Wikimedia Commons

“As I came to power peacefully, so shall I keep it.” – Corazon Aquino

Corazon Aquino was one of the key figures involved in toppling the authoritarian rule of President Ferdinand Marcos and is remembered for restoring democracy in the Philippines. She rose to prominence following the assassination of her husband Senator Benigno Aquino Jr, one of President Marcos’ biggest critics.

Marcos called for snap elections in 1985, and Corazon Aquino ran for President in opposition. Marcos was declared the winner, despite allegations of electoral fraud, prompting Aquino to call for mass civil disobedience. After defection by the military from Marcos’ regime and the People Power Revolution of 1986, Corazon Aquino was recognized as rightful winner, and inaugurated as the 11th president of the Philippines on 25 February 1986.

What Do You Think?

Sherman’s Field Order No. 15

Original entry byBarton Myers, Texas Tech University, Lubbock, 

09/25/2005Last edited by NGE Staff on 09/29/2020

On January 16, 1865, during the Civil War (1861-65), Union general William T. Sherman issued his Special Field Order No. 15, which confiscated as Union property a strip of coastline stretching from Charleston, South Carolina, to the St. John’s River in Florida, including Georgia’s Sea Islands and the mainland thirty miles in from the coast. The order redistributed the roughly 400,000 acres of land to newly freed Black families in forty-acre segments. Sherman’s order came on the heels of his successful March to the Sea from Atlanta to Savannah and just prior to his march northward into South Carolina. Radical Republicans in the U.S. Congress, like Charles Sumner and Thaddeus Stevens, for some time had pushed for land redistribution in order to break the back of Southern slaveholders’ power. Feeling pressure from within his own party, U.S. president Abraham Lincoln sent his secretary of war, Edwin M. Stanton, to Savannah in order to facilitate a conversation with Sherman over what to do with Southern planters’ lands. On January 12 Sherman and Stanton met with twenty Black leaders of the Savannah community, mostly Baptist and Methodist ministers, to discuss the question of emancipation. Lincoln approved Field Order No. 15 before Sherman issued it just four days after meeting with the Black leaders. From Sherman’s perspective the most important priority in issuing the directive was military expediency. It served as a means of providing for the thousands of Black refugees who had been following his army since its invasion of Georgia. He could not afford to support or protect these refugees while on campaign. The order explicitly called for the settlement of Black families on confiscated land, encouraged freedmen to join the Union army to help sustain their newly won liberty, and designated a general officer to act as inspector of settlements. Inspector General Rufus Saxton would police the land and work to ensure legal title of the property for the Black settlers. In a later order, Sherman also authorized the army to loan mules to the newly settled farmers. Sherman’s Freedmen’s Bureau radical plan for land redistribution in the South was actually a practical response to several issues. Although Sherman had never been a racial egalitarian, his land-redistribution order served the military purpose of punishing Confederate planters along the rice coast of the South for their role in starting the Civil War, while simultaneously solving what he and Radical Republicans viewed as a major new American problem: what to do with a new class of free Southern laborers. Congressional leaders convinced President Lincoln to establish the Bureau of Refugees, Freedmen, and Abandoned Lands on March 3, 1865, shortly after Sherman issued his order. The Freedmen’s Bureau, as it came to be called, was authorized to give legal title for forty-acre plots of land to freedmen and white Southern Unionists. The immediate effect of Sherman’s order provided for the settlement of roughly 40,000 Black Americans (both refugees and locals who had been under Union army administration in the Sea Islands since 1861). This lifted the burden of supporting the freed people from Sherman’s army as it turned north into South Carolina. But the order was a short-lived promise for Blacks. Despite the objections of General Oliver O. Howard, the Freedmen’s Bureau chief, U.S. president Andrew Johnson overturned Sherman’s directive in the fall of 1865, after the war had ended, and returned most of the land along the South Carolina, Georgia, and Florida coasts to the planters who had originally owned it. Although Sherman’s Special Field Order No. 15 had no tangible benefit for Black citizens after President Johnson’s revocation, the present-day movement supporting reparations has pointed to it as the U.S. government’s promise to make restitution to African Americans for enslavement. The order is also the likely origin of the phrase “forty acres and a mule,” which spread throughout the South in the weeks and months following Sherman’s march.

Deeds by Distance: Which States Are Moving to Remote Notarization?

An update from on the fast-moving evolution of remote online notarization and the standards supporting it.

If you transfer or accept a piece of real estate, notarization of the deed will likely occur. For your deed to be recorded, it is notarized first. Recording puts the world on notice of the conveyance, by updating the county’s public land records.

Today, with so much documentation first going (first) digital and (now) remote, can real estate deeds be notarized from afar? In most states they can. The signers and the notaries can sign and notarize a document digitally (eSigning and eNotarizing it); and notaries are now taking it all one step further: performing their work without the need for in-person appearances by signers.

Doesn’t Notarization Have to Be In-Person, By Definition?

Traditionally, that’s been the case. But technology is pressing changes in property law — especially since the 2020 pandemic closed offices and complicated in-person business.

To be specific, a number of states are now getting on board with remote online notarization (RON). States that use RON allow their notaries to use audio-video tools, including webcams, to officiate and record the remote signing — in-state and sometimes interstate, too. Interest in RON was greatly accelerated by state governors’ stay-at-home rules, because once offices closed, states without RON suddenly found themselves lagging behind. So, 2020 was a milestone year for the RON trend.

Lawmakers in Nearly All States are Developing or Have Already Implemented RON.

This includes Maryland, Washington, and Wisconsin. Arizona’s governor issued an Executive Order to speed up the state law that to enable signers and notaries to meet virtually, so its RON legislation is now in full effect. New Jersey’s legislature enacted a remote online notarization law in April 2020. Alaska’s RON law was enacted in April as well. Nebraska and Iowa have sped up adoption through those states’ emergency rules. RON bills were also recently introduced by legislators in Colorado, Louisiana, Massachusetts, and Mississippi. And at last, South Carolina has a bill in the works to enable and standardize RON.

States are implementing remote data security standards from the Mortgage Industry Standards Maintenance Organization, which are intended “for broad use across the entire residential mortgage industry.” Moreover, mortgage specialists can now refer to guidance from Fannie Mae and Freddie Mac for RON use in 42 states. Both entities direct the remote online notary public to use:

  • Multi-factor identity verification, a government photo ID with a signature, and credential analysis.
  • Tamper-sealed documents — meaning the remote online notary would attach the e-Signature and seal to the RON certificate with a method that automatically flags any future alterations to the notarized document.
  • Ample system security.
  • A secure electronic journal, which holds audio-visual evidence of identity.
  • A backup of the files.
  • Storage for seven years or as directed by state law.

The hope for many in the property technology (“proptech”) field is that closing on homes can be done electronically from start to finish. Given that federal standards are already in the works, states that have resisted the trend are now satisfied that the notary component can be done safely, and are moving forward with policy-making.

What About the RON Holdouts?

Oregon and a handful of other states have been RON holdouts. Let’s face it: switching to online methods isn’t exactly easy for a process focused for so many generations on in-person witnessing. The transition to RON wasn’t immediately universal, and there is plenty of concern about this new way of working.

Significantly, California is still not allowing RON. How do people in the state handle the need for remote services when offices are closed? Some essential services (UPS and FedEx) provide notaries. Or people call on mobile notaries. Some attorneys recommend the use of out-of-state notary. RON can be done from Nevada, Florida, Virginia or elsewhere for Californians, insofar as the remote online notarization is valid in the state in which the notarization occurs. In contrast, some RON-enabling states — Maryland and Utah are two examples — require the remote notary and the signer to be in the same state when notarization occurs.  

Potential legislative change in California could arrive through new notary provisions. A bill was introduced to permit RON during a state of emergency, but it died. As California did not issue emergency authorization for RON, the California Lawyers Association has pressed the Secretary of State for action on the matter. In the long term, AB 2424 could make RON permanently available in California. We shall see.

The Mortgage Bankers Association and the American Land Title Association (in a collaboration called MBA-ALTA) have created model legislation for states to follow. Several states have temporary versions of RON, or provisions that do not comport with MBA-ALTA standards. And even where states have enacted laws to support robust RON provisions, in-person notarization is still available and some lenders expect it to be used. Applying RON to a real estate transaction, notaries and title companies must review and follow their state RON provisions, and the rules put in place by the underwriters and lenders as well.

Is your state updating its notary laws? Check with the American Society of Notaries, which keeps tabs on new and pending legislation.

What Will a Uniform, Nationwide RON Standard Look Like?

As noted above, MBA-ALTA model legislation is available as a guide for states. The associations note that it’s essential to label the RON as an online notarization, differentiating it clearly from an in-person event. As ALTA explains, to be consistent with MBA-ALTA rules, a state RON law would “require disclosure of the fact of remote online notarization in the notarial certificate.”

Signers should have the choice to opt for RON or conventional notarization, according to MBA-ALTA, and the associations also insist that limits on the technology or brands not be adopted by federal law. The idea is to support fair competition in the marketplace for RON and eClosing platform vendors, and to allow innovation.

Of course, there are minimum security standards in the MBA-ALTA model, including:

  • Several forms of identity verification required, including photo ID, proofing and credential analysis.
  • Storage of an audio/video recording to show the act of notarization.
  • Conformity to already existing laws covering electronic recording.

The MBA-ALTA model was designed to promote interstate RON standards, and to align government agencies with other entities and affirm best practices in real estate documentation.

Nationwide RON Implementation Is Now in Sight.

It looks like the next step will be a nationally uniform law authorizing RON. The Securing and Enabling Commerce Using Remote and Electronic Notarization Act of 2020 would set national standards for both eNotarizations and RON. If enacted, it will enable notaries throughout the United States to perform RON for customers who opt in. It will mandate fraud-resistant technology to prevent deed fraud. The Secure Act has widespread, bipartisan support.

Not only does this developing legal story point to more consumer convenience; it also stands to make the U.S. real estate market much more accessible to interstate and international buyers, for whom a physical trip to the closing is currently a major hurdle.

Buying a house from outside the United States. Making an international real estate sale? Review the guide to international real estate transactions.  

Would you by a home completely online? A growing number of people believe that the gains in transparency would be as important as the security measures. One thing is certain: new generations of real estate buyers will have digital options that were unthinkable just a few years ago. 

Should a House Be in an Irrevocable Trust?

Image of a side of a house from the ground looking up. Captioned: Should a House Be in an Irrevocable Trust?

A home can go into an irrevocable trust. But giving up control over a primary residence is not something most owners want to do. The owner lets go of the “incidents of ownership” and the house goes under a separate tax ID, with taxes filed by a trustee. The owner might continue living in the home, but the house essentially becomes a vessel to hold property for the named beneficiaries.

Any homeowner’s financial circumstances and goals can change, and so can their relationships with potential beneficiaries: family, friends, and charities. This is why an irrevocable trust makes sense only in rare situations.

The Irrevocable Trust Differs From a Living Trust.

Trusts can hold assets, including houses, for chosen beneficiaries. The trustee is the party who handles the trust’s expenses, who hires an accountant to files its taxes (if it generates income), and who serves as a dependable steward on behalf of the beneficiary.

The trustee can be a competent adult or a corporation. There are lawyers and professional services available to manage trusts.

As a homeowner, you could be the trustee for your own living trust, also called a revocable trust. The revocable trust remains under your control and your personal tax ID, and you can take the house out of it or change the beneficiary as you see fit. You may end the trust, remove the house from the trust, or change your designated beneficiaries.

But once the house title is conveyed to the irrevocable trust, you’ve given it up to the trust, which will own it throughout your life. You cannot change the beneficiary from, say, your child to a charity. You cannot modify the terms, such as the timing in the agreement for your child to receive the assets. And you may not, of course, revoke this kind of trust.

Selling the house — during or after the trust creator’s life — is not the trust creator’s role but rather the trustee’s job to initiate, if the home’s title is not ultimately conveyed to the beneficiaries. The trustee can hire a real estate agent. Most do, as hiring a professional will assure the beneficiaries that the transaction was professionally handled.

Granted, most states do allow irrevocable trusts to be modified with the consent of the impacted parties, unless they are minors. But state law may require a court order or a non-judicial settlement agreement — a binding agreement tantamount to a judge’s order. Rigid arrangements like this don’t normally make sense for a house, which owners might like to borrow against or sell when they see fit.

In What Situations Do Irrevocable Trusts Work?

Four key reasons homeowners consider creating irrevocable trusts are these:

1. To minimize estate taxes on highly valuable properties.

Needless to say, the average homeowner doesn’t have this problem. As of 2021, federal estate tax applies only to taxpayers who have at least $11,700,000 in assets per person. Some states have their own estate tax and their own threshold, which can be lower.

Some trusts are set up to skip taxation until the second person in a couple dies. There are also generation-skipping trusts, which bypass tax for the children of the trust creator. These can be effective methods to preserve wealth for people with large estates. Keep in mind that nobody knows for sure what the threshold for estate taxes will be when they pass on. Federal and state tax policies change as government administrations change.

2. To preserve eligibility for long-term care. 

By letting go of ownership of a home and placing it into an irrevocable trust, a person may be able to obtain Medicaid support for long-term care if needed. While Medicaid cannot force anyone to sell their home, the cost of long-term care is a lienable debt. This means Medicaid will sell the debtor’s house after death to reclaim its costs.  

By transferring home ownership to an irrevocable trust, though, a person can keep the home until it passes to the chosen beneficiaries. This is what’s meant by the term Medicaid trust. For this to work, the house must be in the trust at least five years before Medicaid support is tapped. Before selling and buying a new house with the proceeds, the beneficiaries should know that the trust must sell the house and the trust must be buying another — to keep the value protected by the trust.

3. To shield assets.

Assets can be protected from creditors by an irrevocable or asset protection trusts. Where these methods are available under state law, they can be helpful to professionals whose work could be subject to lawsuits. That said, courts may order the protective shield lifted for fairness to prevail in a given case. And as with the Medicaid trusts, the trust’s asset protection is not effective immediately.

Pro tip: Both the availability of asset protection trusts and the need for them vary depending on the home’s state. In some states, homestead laws already shield primary residences from creditors to some extent.

4. To provide for a beneficiary’s special needs.

Some homeowners transfer their houses into revocable trusts to provide for children or adults who are disabled and need support. If providing for others’ special needs, the trust can be set up as revocable or irrevocable.  

These goals are clearly different, and no trust is one-size-fits all. The trust agreement will be customized to fit its case-specific goals.

Alternatives to an Irrevocable Trust

Other trusts are also will substitutes. If your house is put into a revocable trust, the home transfer avoids the time and cost of probate, and your beneficiaries have immediate access to the house. There are several other strategies to avert probate, including looking at your title vesting options.

Or you might consider:

  • A Revocable Trust. Create a revocable trust to pass a home to non-spouse beneficiaries, and you can take that asset back if necessary. Revocable trusts ultimately bypass probate yet stay within the owner’s control, in the owner’s estate, and under the owner’s social security number throughout life. They can hold assets for a child or children, and distribute their value in increments, as young adults reach the specified ages.
  • A Life Estate. As a life tenant, an owner can live at home for life, then pass a beneficiary the remainder interest in the property. By passing from one resident owner to the next in the form of a remainder, the home circumvents probate. The title has both names on it, but only one has the right to live in it at a time.
  • An Enhanced Life Estate Deed. Some states allow enhanced life estate deeds, also called lady bird deeds. These are revocable. They enable their life tenants to sell or take loans out on the property if they so choose, change the remainder beneficiary, or take back the interest. 

Note that a trust created as revocable in life will become irrevocable once its creator dies or becomes incapacitated. At that point the trust cannot be amended or revoked. It then becomes an entity in itself, and its successor trustee must obtain a separate tax identity for it, and ensure that any remaining debts tied to a home in the trust are properly paid.

Bottom Line? It’s Complicated.

All the applicable legal rules must be carefully followed with an irrevocable trust. Otherwise, its protections can be lost. In some circumstances, and in some states, real estate may be taken out of Medicaid trusts. In other situations, assets in irrevocable trusts may be accessible for reverse mortgages. These activities depend on bank guidelines, and receipt of the beneficiaries’ permission. Putting a home with a mortgage into a trust is especially tricky, and involves significant advance planning and communication.

Consult a wills, estates and trusts attorney for case-specific guidance. An experienced attorney in your state can draft a trust agreement that is valid and effective — one that optimizes the potential financial and tax benefits of the irrevocable trust in your state.

Photo credits: Chris Mok and Guillaume de Germain, via Unsplash. Deed,com

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