Buying Real Estate – Important Points to Protect Your Interests


If you are at all involved in the residential real estate market you are aware that residential real estate market is now the strongest it has been in the past few years.  Houses are listed on the market and under agreement for sale in just a few days at or above the asking price.  With this strong real estate market it is important to know and understand the legal considerations when purchasing real property.    Whether it is a home for your family or commercial property to operate a business, the points to consider are largely the same.  Below are several important points you should review before purchasing real estate.

  1. Work with a good Realtor. When you are trying to find real estate to purchase working with a good real estate agent is very important.  This is true if you are trying to identify a new home for your family or a new commercial property for your business.  Most real estate agents are very good.  However, just like any profession, some are not as good.  If you have never worked with a real estate agent ask your friends, your co-workers or your attorney for a recommendation.  A good real estate agent earns his or her commission.
  2. The Terms of an Offer are Important. After you locate the property you want to purchase the first step in the process is to submit an offer to the seller.  The offer contains the key terms which will form the basis of the formal purchase and sale agreement.   The offer includes such key terms as the price you agree to pay, the proposed closing date, if there is a financing contingency (or a cash offer) and any other key provisions such as the condition that you have to sell your home before you can purchase this new home.  The seller can either accept your offer or make a counter-offer to reach an agreement.  Once the terms of an offer are accepted then a more complete purchase and sale agreement is prepared and signed.  It is important that you carefully consider the terms set forth in the offer because once they terms are accepted it may not be possible for them to be changed.
  3. Get an Inspection. Once you identify a property to buy you should get it inspected to make sure that you are aware of any issues that may go unnoticed by an untrained eye.  
  1. The purchase and sale agreement – read it and understand it! If you put in an offer and it is accepted by the seller, you will need to enter into a purchase and sale agreement.  The terms of the purchase and sale agreement are very important because they will control the ultimate transfer of the property from the seller to the buyer.  If you don’t know what the terms mean and don’t know if any important terms to protect your interest are missing you should consult with an attorney.
  2. What are your escape options? The most important provisions of the purchase and sale agreement are the terms that allow you to walk away from the transaction and get your deposit (which is typically thousands of dollars) back under specific circumstances.  Make sure the terms which allow you to get your deposit back are clear.
  3. How will you take title? If the inspection looks good and the purchase and sale agreement is signed you then have to decide how you will take title at the closing.  Simply put, you need to determine whose name will be on the deed.  Will it be you and your spouse?  Will it be you and your business partner if you are buying this for your business?  Should you set up a corporation or limited liability company to own the real estate?  If you don’t understand all the implications resulting from how title to the property is held you should discuss this with your attorney.
  4. Look out for unique issues – e.g. Easements.  Does the property you are buying have the benefit of an easement over the neighbor’s property or does your neighbor have an easement over the property you are buying?  Easement disputes can be very frustrating to land owners and you need to fully understand the benefits or burdens of any easement BEFORE you complete the purchase.
  5. Are there limitations on future use? If you are buying the property with a specific purpose in mind, make sure you investigate whether that use is possible before you buy the property.  If you want to operate a business on the property make sure the zoning allows for such use.  If you want to put in a pool you need to make sure there are no restrictions to prevent you from installing a pool.  The time to learn about any limitations which my impact you is BEFORE you buy the property.  

The above list is not meant to be exhaustive but rather address some of the more important issues to consider when purchasing real estate.  If you are considering the purchase of real estate, talk to your attorney.  If you don’t have an attorney, give me a call to set up a no cost consultation to review the issues to make sure your interests are protected.

Protecting Your Assets as Nursing Home Costs Soar to $15K per Month: Qualifying for MassHealth

When meeting with clients to discuss estate planning, they often ask what can be done to protect their assets from the high cost of nursing home care.  The private payment for nursing home care in Massachusetts averages close to $15,000 per month.  If you qualify, MassHealth will pay for your nursing home care.  However, qualification for MassHealth while still preserving your assets requires careful planning.

The rules used to determine if you qualify for MassHealth are very complex and each person’s situation is unique.  If you or someone you know may need to go into a nursing home you should speak with an attorney familiar with the various MassHealth rules and regulations to see what you can legally do to help protect your assets from being depleted.  This article provides a basic overview of some key issues related to MassHealth and various asset planning techniques.

  1. What if the nursing home applicant does not have a spouse? If you need to go into the nursing home and you do not have a spouse, MassHealth will pay for the nursing home expense only if you have $2,000 or less in total countable assets.  In general terms, a countable asset is any asset that you, as the prospective nursing home resident, own that is not excluded by MassHealth regulations.The most significant exclusion is up to $828,000 in equity in your home.  This means that MassHealth will pay for nursing home care if the only asset you have is a home with equity of $828,000 or less.  (Note, even though the equity in a home is excluded, when determining if MassHealth will pay for the nursing home care, MassHealth will still put a lien on your house which must be addressed if and when you die with any probate assets.)Other exemptions include up to $1,500 cash value in a life insurance policy and prepaid burial plans.  If you have an asset that is not excluded, e.g. $5,000 in a bank account, MassHealth rules require that $3,000 from the bank account be used to pay for nursing home care before MassHealth begins paying for the cost of your care.
  2. What if the nursing home applicant has a spouse? If either you or your  spouse goes into the nursing home and the other spouse does not live in a nursing home (the spouse that does not live in the nursing home is called the “community spouse” because they continue to live in the community), the community spouse is allowed to keep a community spouse allowance.  The community spouse allowance is adjusted annually and for 2015 the community spouse can keep 50 percent of the otherwise countable assets, up to $119,220.  For example, if the sole countable asset owned by a couple is an investment account worth $102,000, the community spouse can keep $52,000:  $102,000 minus a $2,000 (the amount of cash that is excluded and thus not countable), divided by 2.  Of the $102,000, the couple must spend the $50,000 on nursing home care prior to MassHealth making the payments.  Note that as a married couple, you will be able to exclude up to $828,000 in equity in your home.
  3. What happens if I give assets away before applying for MassHealth? When determining if you will qualify for MassHealth, you must report all gifts you have made within the past five years (called “the five year look–back” rule) to MassHealth.  Gifts (i.e., transfers for no consideration) made within five years will be considered a “countable asset” and used to disqualify you from MassHealth coverage for a period of time, which is calculated based upon the size of the gift and the annual exclusion amount.  The annual exclusion amount is the average cost which MassHealth pays for nursing home care, which for 2015 is approximately $9,000.  You calculate the exclusion period by dividing the total amount of the gifts by the annual exclusion amount.  For example, if you gave away $90,000 two years before you applied for MassHealth you will be denied MassHealth coverage for approximately 10 months from the date of the application because of this gift ($90,000 gifts / $9,000 exclusion amount).  Note:  the average that MassHealth pays for nursing home care is significantly less than what a private person would pay.   Gifts include both outright gifts to a person as well as transfers to an irrevocable trust or the transfer of real estate with a retained life interest.
  4. Are some transfers allowed? The law permits certain transfers by the person who is going into a nursing home.  These transfers can be critical in protecting assets.  For example, transfers of assets to your spouse or to a disabled child are permitted.  In addition, transfers may also be permitted to a family member who provided care to you which delayed your need to enter a nursing home.  The potential benefits of these transfers are very significant.  In current practice, MassHealth may attempt to recover payments it has made for the benefit of a person only from that person’s probate estate.  If as a nursing home resident you own a house  and you transfer it to your (community) spouse, when  you die the house will not be part of your probate estate, and that will protect it from any MassHealth lien.
  5. When is the best time for asset protection planning? There are a few last minute planning techniques that you can use to help protect your assets from being depleted by the cost of nursing home care.  Annuities and pooled trusts may provide some potential savings.  However, the best time to plan is before you have an urgent need for nursing home care, when you can sit down and evaluate your current assets and determine what you can transfer to others or into an irrevocable trust that was designed to provide protection from nursing home costs. Remember, any property transferred to others or to a trust is subject to the five year look-back period;  therefore, the best time to plan is when you are perhaps in your 70s or early 80s and in good health.  If you have an asset that you would like to pass to your loved ones (e.g., the family home or an investment account), and you are willing to give up control of that asset, you should consult an experienced estate planning attorney who is familiar with MassHealth regulations.


Most of us work for many years to accumulate assets so that we can pass them on to the ones we love.  If you are concerned about the cost of nursing home care and how those costs could consume most of what you have saved, you should consult with an attorney on how the MassHealth regulations allow you to protect assets from being used for nursing home care.  If you do not have an attorney, please contact my office at 781-934-8200 to schedule an initial no cost consultation.

Attention Massachusetts Employers: Be Sure You Understand the New Earned Sick Time Law

By Audrey LaRowe Nee, Esq.

This blog post is by Attorney Audrey Nee who works with me at my office in Duxbury.  This blog post covers the new earned sick time law which became effective July 1, 2015.  If you have employees it is important that you understand this new law so please take the time to read this important post.   

In November, 2014, Massachusetts voters approved a new law requiring all Massachusetts employers to provide for up to 40 hours of earned sick leave.  If an employer has 11 or more employees, the employer must provide those employees with up to 40 hours of paid sick leave each year; employers with 10 or fewer employees are still covered by the law and must provide for up to 40 hours of unpaid sick leave.  Compliance with this technical law, which became effective on July 1, 2015, can be tricky and violations can carry substantial consequences.  Therefore, it is imperative that employers familiarize themselves with this law, which is briefly summarized below.

The Basics

 Employees may use their earned sick leave (whether paid or unpaid)  (1) to care for a child, parent, spouse or parent of a spouse; (2) to care for the employee’s own health; (2) to attend to a medical appointment; or (4) to address the psychological, physical or legal effects of domestic violence.  Employers may not interfere with an employee’s use of earned sick time and may not retaliate against the employee for using that earned sick time.  Sick time accrues at the rate of 1 hour for every 30 hours worked and begins to accrue from the first day of work.  Accrued sick time may not be used until the 90th calendar day following the employee’s hire date.

Employees may carry over up to 40 hours of unused sick time to the following calendar year but they may not use more than 40 hours of sick time in any one calendar year.

Where the need to use earned sick time is foreseeable, employees are required to make a good faith effort to provide advance notice of that need.  Employers may require up to 7 days’ advance notice if the employee has a pre-scheduled time they plan use earned sick time.  If an employee uses more than 24 consecutive hours of earned sick time, the employer may require written verification that the employee used earned sick time for allowable purposes.  If the use of sick time occurs within 2 weeks prior to the employee’s final scheduled day of work or occurs after 4 unforeseeable and undocumented absences over a 3 month period, the employer may require documentation for the use of earned sick time.  The employer may not require that the documentation divulge the nature of the illness or the details of any domestic violence resulting in the use of earned sick time.

Transition Year / Safe Harbor for Employers with Existing Policies

Because the law takes effect mid-year, employers are not required to provide more than 40 hours of earned sick time for 2015 and any paid leave given prior to July 1st will be credited. Employers having a paid sick leave policy as of May 1, 2015 will be considered in compliance with the new law until January 1, 2016 so long as that policy provided that full-time employees could earn and use up to 30 hours of paid leave during 2015 and provided that, as of July 1, 2015, employees not previously covered by the policy either accrued paid time off at the same rate of accrual as covered full-time employees or received a pro-rated lump sum allocation.

Consequences for Non-Compliance

Violations of this law can carry very significant fines (up to $25,000 per violation) as well as up to treble damages in the event of a civil suit commenced by employees.  Therefore, it is important that employers develop and implement a compliant sick leave policy.

Additional information about the new sick leave law including the notice that employers are required to provide to employees is available at

If you have any questions about this new earned sick time law or any other business issues please call us at 781-934-8200.



Business Formation – A Practical Guide to Legal Issues

If you are considering starting your own business it is imperative that you assemble a group of trusted advisors.  At a minimum this group should include an experienced business lawyer and an accountant who can assist you as you begin your business.  While there is no substitute for an individual meeting with an attorney to discuss your specific situation, the purpose of this article is to share with you some of the most important items you should consider when starting a business and what steps you should take now to avoid significant problems in the future.

The information below is based upon businesses located in the Commonwealth of Massachusetts.  If you are located outside of Massachusetts, the information below may be helpful but you should always consult with an attorney in the state where you plan to locate your business.  In addition, before you make any decisions regarding your business you should ALWAYS consult with an attorney for particular advice about your specific situation.  All situations are unique and the particular facts of your case could make a significant difference in how you should proceed.

Do you need to form a corporation or a limited liability company?

 The very first question you need to address is should you form a separate legal entity, i.e. a corporation or a limited liability company (“LLC”).  When deciding if you need to form a corporation or a LLC the real question you need to ask is: could the operation of your business put your personal assets at risk?   How possible is it that in the course of your business operations you could face a lawsuit where damages could be substantial?

In general, there is almost always the possibility of potential liability from business situations which could put your personal assets (e.g. house, car, personal bank accounts) at risk.  The benefit of forming and operating a corporation or LLC correctly is that if there is a lawsuit against the company then the liability exposure is limited to the assets owned by the company and, importantly, not your personal assets.

There are some businesses where you may be able to protect yourself by just purchasing business liability insurance.  The cost for the filing fees and/or taxes to keep a corporation or LLC qualified to conduct business in Massachusetts is approximately $550.00 per year.  This $550 cost does not include the potential extra cost involved in additional bookkeeping and tax preparation fees you may incur if you form a corporation or LLC.  If you are conducting a business where you do not believe there are significant liability issues, you may be better off taking the $550.00 annual costs and use that money to buy insurance to protect your personal assets.

If you are going into business with another person, even if it is a low risk business, then my advice is that you should always form either a corporation or a LLC.  The fact that there is more than one owner makes the formation of a separate legal entity almost essential to address the issues that will be discussed below.

Are you operating the business as the only owner? 

 The formation of either a corporation or an LLC is much simpler if you are going to be the only owner of the legal entity.   If you are the sole owner it is important that you have the corporate governing documents in place (e.g. operating agreement for an LLC and the bylaws for a corporation) but you do not need to spend a significant amount of time confirming the terms of these documents.  If you are the 100% owner then you can always amend the terms of the governing documents when you deem necessary.

Are you going to operate a business with one or more other owners? 

             The biggest area of controversy related to the operation of a business occurs when there is more than one owner.  If you are starting a business and there is more than one owner, the most important thing you can do is meet with an experienced business lawyer who can advise you on what items you need to discuss and agree upon in writing BEFORE you start your business.  Having what can be very difficult conversations before you open your business can prevent a significant amount of problems that can be very difficult to resolve.  The following are some of the more important questions/issues you should discuss and come to agreement on before your business begins.

  1. How will the ownership percentage be divided? If there are 2 owners, do both own 50%?
  2. How will major decisions be handled? Must 100% of the owners agree on major decisions?  What is considered a major decision (e.g. expenditures over $1,000 or $10,000)?
  3. Are all owners going to work in the business? How much will the owners be paid?  What will the owner who does not work in the business be entitled to receive?  How will the pay raises (or decreases) be determined for the owners of the company?
  4. How much will each owner contribute in actual cash to fund the initial operations? If someone is contributing “sweat equity” to a project, how will you determine what that is worth and what ownership percentage in the company the person is entitled to receive?
  5. What happens if the company needs an additional cash infusion? Will all owners be required to make equal contributions?  What happens if one of the owners cannot contribute?  How does this impact the ownership percentage of each person?
  6. What happens if one of the owners decides they want to leave the business?
  7. Is a departing owner permitted to sell his or her ownership interest to a third party? What restrictions will there be on transferring the ownership interest?
  8. What happens if one of the owners dies? Will the remaining owner now be in business with the deceased owner’s heirs?
  9. When someone leaves the business for any reason (e.g. voluntary departure or becomes disabled or dies) how will you value the departing owners interest in the business?
  10. When the remaining owner(s) or the business buys the shares of the departing owner, is the purchase price paid all at once or can it be spread over time?
  11. Will the company maintain life insurance on the owners to fund the buyout?

The above list is not intended to be exhaustive but does contain some of the most important issues that need to be addressed before a business is formed by more than one owner.  By having honest discussions about these very important issues before you start your business you can make some very important decisions to prevent future problems.  If you know what happens when you leave a business after 6 months, 6 years or what will happen if you can no longer work, you could prevent a significant legal dispute from ever developing.  The agreement on how you will resolve the issues raised by the above questions should be included as part of the corporate documents (e.g. operating agreement, bylaws or shareholder agreement, etc.) that are signed by all the owners.  If any of the issues arise after the company is formed, the fact that the owners have already discussed and agreed to how this situation will be treated will be a significant benefit to all involved.

As the saying goes, you don’t know what you don’t know.  The best time to discuss the important issues which could arise when you have more than one owner of a business is BEFORE you start your business.  If you can’t agree on the terms before you start, you should seriously consider if this is the right business partner for you.  Making that decision before the business is started can save you from a very expensive and frustrating experience which occurs when co-owners cannot agree.

A Durable Power of What?

It seems that most people realize the importance of having a will and if they don’t have a will they at least realize that they should have one.   Unfortunately, it seems that many people are not even aware of another very important document that they should have:  a durable power of attorney.  They don’t know what a durable power of attorney will do for them and the significant problems and expenses that can result if they don’t have one.

What is a durable power of attorney?  

A durable power of attorney is a document which you sign that gives someone else the authority to act on your behalf to manage your financial and business affairs.  It is much different from a will.  A will is a document which takes effect when you die and directs what will happen to your probate assets.  In contrast, a durable power of attorney is used by your designated “attorney-in-fact” when you are alive and expires upon your death.  Your attorney-in-fact does not have to be an actually attorney but can be any adult you know.  Typically it is a spouse or an adult child but can be a sibling or just a friend.  It is important that you be very careful about who you designate as your attorney-in-fact because that person has the power to make financial decisions for you.  The person who holds a power of attorney can use the document to sign deeds to real property (the original power of attorney must be available to record at the registry of deeds), pay bills, deposit checks, close bank accounts, make decisions regarding investment accounts, sell a business you may own, etc.  Essentially the durable power of attorney gives your attorney-in-fact the ability to manage your financial affairs just like they were you.

Why is it so important?    

The easiest way to explain why a durable power of attorney is important is with an example.  Let’s say that you and your spouse own your home as husband and wife as tenants by the entirety.  What this means is that if either of you were to die, the survivor will automatically own 100% of the house by operation of law.  To sell the house you will just need to sign the deed and record a copy of your spouse’s death certificate.

But what happens if you want to sell that house and your spouse is alive but incapacitated?  You have listed the house for sale, moved all of your items to Florida and one week before the closing your spouse has a stroke which leaves them incapacitated.  Your spouse’s name is on the deed and to transfer the house, if they are alive, he or she must sign the deed.  Unfortunately, their medical condition has left them unable to communicate or sign any document.  If your spouse has named you as their attorney-in-fact, and you have the original power of attorney in your possession, the sale of the home can proceed and the closing should take place as scheduled.

If your spouse did not prepare a power of attorney then you would be forced to go to the Probate Court to request to be appointed a conservator of your spouse so that you can manage their financial affairs.  While it is almost certain the Probate Court would approve you as the conservator, the process will take time.  It will also be expensive even if you file the paperwork yourself (i.e. you did not hire an attorney to help you) to be appointed the conservator.  The filing fee to be appointed conservator is $265.00.  Once you are appointed the conservator, you then must petition the probate court for a license to sell the property.  The Probate Court charges a fee for the license to sell which is based upon the selling price of the property and can be up to $1000.00.    The Probate Court is likely to appoint an attorney to investigate the sale to make sure the interests of the incapacitated person are protected.  Even if you don’t hire your own attorney to help you with the process, you will be required to pay for the attorney who has been appointed by the Probate Court to represent the interests of the incapacitated person.  This whole process will be expensive and will take time.  If you are in a situation where you have to have a conservator appointed and a license to sell approved by the Probate Court, it is unlikely that the sale would be able to occur on the planned closing date.  Importantly, all of this could have been avoided if your spouse had named you as their “attorney-in-fact” with a properly executed power of attorney.

 What to do now?

There is an old expression that the real problem is “you don’t know what you don’t know.”  The benefit of meeting with an experienced estate planning attorney is that you can discuss your situation and determine what is in your best interests.  If you would like to discuss your particular situation with me, please call 781-934-8200 to schedule an initial no cost consultation.