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Opinion Letter

From time to time a client will tell us that a bank, financial institution or title company has asked for a letter explaining their Revocable Trust or some other part of their estate plan. While this appears to be a simple request, there are some problems. You need to understand that it is not normal for lawyers to write letters like this for a transaction. This is actually a very unusual and special request.

An opinion letter from an attorney is a very specific document in real estate or business transactions. They are complicated and very expensive documents which are written for specific purposes. Purchasing and selling homes are not the type of transactions that calls for an opinion letter. Selling a piece of business real estate would also not fit the mold. Opinion letters are reserved for extremely large and complicated matters. If a bank, lender, underwriter or mortgage broker is requiring you to provide an opinion letter for an ordinary transaction, they are probably being unreasonable.

If the people you are working with are not asking for an “opinion letter,” but just want something to explain a document or a part of your estate plan, then there is another problem. Most estate planning documents are clear to professionals and explain themselves clearly. Most estate planning arrangements are well established and people in the industry should be familiar with the concepts involved. Your lawyer’s explanation should not be necessary for anyone you’re working with who has any experience in your transaction.

A more serious scenario is that the people you are dealing with want you to get a “simple” letter from your lawyer that does not include everything that a formal opinion letter has in it. Once you give it to them, they want to then rely upon it as if it were an opinion letter. That would have huge consequences for the lawyer who wrote the letter. There is a reason why opinion letters are so difficult and expensive. Lawyers are very careful about situations where anything can be converted into a formal opinion letter. A lawyer’s usual response is to either provide a thorough, complex and expensive opinion letter, or to decline to provide any letter at all.

If you are asked for a letter from your lawyer, double check with the people that you are working with. If they cannot get the basic information from a deed or other resources, or they insist upon the letter for other reasons, then you should understand that there is some problem or deeper issue involved. You would need to re-evaluate the deal that you are doing. You may also want to check with other options for your transaction. This request could very well be specific to the people you are working with. Another bank, underwriter or mortgage company might not require this information.

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