
The role of the lawyer in an inherited apartment sale transaction
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As a legal firm specializing in providing ongoing support for real estate transactions and offering legal counsel to buyers and investors domestically and internationally, we frequently take on the role of trustees. This responsibility entails handling transaction proceeds and making payments to various parties, including tax authorities. Our extensive knowledge in this area ensures that these financial matters are managed effectively and per legal requirements.
A trust is an arrangement anchored in an agreement and the law according to which a trustee holds assets and/or funds and acts on them to benefit a particular beneficiary(ies). The trust allows the use of funds for a specific purpose for the benefit of the beneficiary(ies); the trustee receives control of the funds to act on them following the purposes of the trust defined in the provisions of the trust agreement.
A trust account refers to a specifically designated bank account utilized for managing funds by the provisions of a trust. One instance where a trust account is commonly employed is within the context of real estate sale transactions. In such cases, the proceeds from the transaction, or a portion thereof, are deposited into the trust account to ensure timely payments of taxes and other obligations required by the seller for issuing necessary documents, such as capital gains tax approval and city permits. The trust account may also cover expenses like management fees to the Unit for the Location and Restitution of Abandoned Property of the Ministry of Justice, processing fees, and other related payments.
It is important to note that the Israeli real estate tax authorities do not accept direct transfers from abroad, necessitating the establishment of a dedicated trust account. This account serves as the destination for funds transfer and the source for issuing payment vouchers for tax-related obligations arising from the transaction.
It is essential to acknowledge that dealing with banks in this matter can be complex. Banks are subject to strict regulations and measures to combat money laundering, terrorist financing, and tax evasion. Opening new trust accounts requires significant effort without substantial economic gain.
To prevent financial institutions from being exploited for illicit purposes, compliance with these regulations involves:
Consequently, there may be significant delays in carrying out transactions, including receiving funds and transferring them to the relevant parties, that must be considered.
Previously, trust accounts were established at the branch level, meaning that lawyers would visit the branch where their business bank account was maintained to initiate the opening of a trust account.
Nowadays, the process involves obtaining approval from a central banking center before opening the trust account. This applies particularly to individuals who are non-residents of Israel, where the procedure involves an additional layer of scrutiny, resulting in a longer delay in opening the account.
When opening a trust account, most banks typically require the following documents:
*These documents must be certified copies, signed, and verified by the consulate.
All of the above does not constitute legal advice or a substitute for legal advice, and all information contained on the site serves as general information only. The aforesaid does not replace information provided by an attorney, and the reader should contact and consult with an attorney who specializes in the field before taking any legal action. Anyone who relies on the above in any way does so at his own risk, and the responsibility for any direct or indirect result due to reliance on the aforesaid will apply to the user only.
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Mr. Lawyerson shows an extremely high level of competence in his chosen practice areas. I recommended this lawyer highly.