What is Tax Proration?
Video Summary
Hi. I’m Chip Waller. I’m a board-certified real-estate attorney and I have closed approximately 15,000 real-estate transactions in my 38-year career. I’m often asked, in conjunction with the closing, what do you mean by tax proration?
A tax proration is whereby the seller pays their share of the taxes at closing. In Florida your tax year runs from January 1 to December 31st; however, the tax bill does not come out until November for the current year’s taxes. So the taxes are being paid in arrears. So if you have a closing on, say, July 1, which is the halfway point in the year, the seller would give a credit to the buyer on the closing statement for one half of the taxes. That’s usually based upon the prior year’s tax bill, and care must be given to determine whether or not there’s still a Homestead Exemption on the property or just what the taxes will be.
Many times there is a tax re-proration agreement entered into between the buyer and the seller, wherein they agree that if the taxes increase or decrease, the parties will go back and do the math to determine who received more or less of the tax bill payment as far as that is concerned, and so the buyer will be responsible for paying the taxes when the bill comes out in a real-estate closing unless the closing takes place after November 1, and the entire tax bill can be collected from both the buyer and the seller and be paid from closing.
Also, if you have an institution owner, many times they will require the taxes to be escrowed and be included in your mortgage payments so that they can be paid, but this does not affect the proration between the buyer and the seller.
If you’re interested in having me represent you in conjunction with the purchase or sale of your property, please give me a call at (727) 847-2288. Thank you.
- Published in Real Estate, Videos
Terms in a Will
Video Summary
Two common terms used in preparation of a will are per stirpes and per capita. Both refer to different ways to indicate how your assets are to be distributed amongst your beneficiaries.
Per Stirpes means that if a benificiary named in your will dies before you do, then his or her share of the inheritance will pass to his or her beneficiaries.
Per Capita means that if a beneficiary named in your will dies before you do, this his or her share of the inheritance will be divided equally among the remaining beneficiaries.
For example, let’s say you have two children and the older dies.
If your will is written per stirpes, the older child’s beneficiaries will receive his half of your estate.
If your will is written per capita, the younger child will receive one hundred percent of your estate.
Does My Will Have to be Probated?
Video Summary
Many prepare a will in the hopes that it will prevent their estate from undergoing the probate process at the time of their passing. However, if you are in sole ownership of any assets with no co-owner or beneficiary legally established, then those assets will need to be probated.
If you have any questions about estate planning or would like to have your will prepared, please call Waller & Mitchell at (727) 847-2288.