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Q. Do you need an attorney or an accountant to do an Exchange?
A. Not necessarily, but I think it is a very good idea. I should say, up
front, that I am an attorney. There are many companies and individuals
advertising exchange services on the Internet. Some are attorneys or
accountants, some are not. Only an attorney or an accountant can give you legal
or tax advice. The thing to keep in mind is that an exchange has significant tax
consequences, and unless you work with an attorney or an accountant you will not
be receiving tax or legal advice. Only an attorney or an accountant can give you
legal or tax advice on whether an exchange is a good idea for you. See our notes
on "Shouldn't I always do an exchange?"
If you think you are getting legal or tax advice, but are not sure, you might
ask to have it in writing. An attorney or accountant giving legal or tax advice
should be willing to put it in writing. If you use a service which is not an
attorney or an accountant, YOU will probably be required to sign a waiver that
you are receiving no legal advice and that the service is not
responsible if your exchange does not work or if it does not benefit you. (This
statement may be buried somewhere in the fine print.) With an accountant or an
attorney, however, you will be receiving professional advice from a licensed
professional and the job, the attorney or accountant does/must meet professional
standards. If the job is not done right, you may have a malpractice claim. You
need not be a rocket scientist to understand exchanges, but they aren't that
simple. Not everyone should structure their transaction as an exchange. Again,
this is explained in our notes on "Shouldn't I always
do an exchange?" But, a service which is not an attorney or an
accountant may not tell you this. They may encourage you to pay them to
structure the transaction as an exchange (so that they will get paid),
regardless of whether the exchange benefits you, knowing that since you will
sign a document saying you are not getting legal advice, you cannot make a
malpractice claim against them. Attorneys and accountants know not to recommend
an exchange to you if it is not appropriate for your situation. If using an
attorney or an accountant were more expensive, perhaps there would be a reason
not to have one help you with your exchange. However, this is not necessarily
the case. See our notes on "Are attorneys and
accountants more expensive?"
Consider using an attorney or an accountant. It need not cost you any more,
and you will have the peace of mind that comes from knowing that a licensed
professional, who will be there after the transaction is over, has structured
the transaction. Get sound advice from a licensed professional! Rice
& Stallknecht, P.C. would be honored to assist you.
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