Legal question.

[LagerHead]

I'm sure either someone on this forum has been through a similar situation, or one of the lawyers can either answer or point me to someone who can, including themselves. I am not looking to get a lawyer to work for free, so if the best answer is to come see you, let me know that too..

 

For reasons that are unimportant to the general topic, my mother wants to put a home she is about to buy in my name. She is going to buy the home outright, so there won't be any mortgage for me to worry about or anything like that, but she doesn't want another family member to be able to get it, and my stepfather's medical bills are going to be mounting, so she doesn't want them to be able to come after the house if they get behind.

 

So my question: If she puts the house in my name, does that create any kind of liability on my end, other than the obvious property taxes? And can they somehow come after me for the house to pay for the medical bills, even though they aren't in my name? What else might I be missing? 

 

If one of our resident attorneys thinks I should come in and discuss this, please PM me contact info and I will do so. I am in the Nashville area.

 

Thanks in advance. 

[Dane]

I'm not an attorney but it might be worth looking into putting it (and the rest of her assets) into a trust. Sent from my iPad using Tapatalk HD

[Hershmeister]

You really need cpa to help you here I am not a cpa or lawyer My inclination is this transfer of $$ would be a gift, and thus taxable as described.

[Jonnin]

IIRC transfer of assets has a time lag and it is not a short period (Sorry, I can't recall the # of years, it seems like it might be as many as 5 from memory).  That is, she can't transfer it to you and then in 6 months say " I own nothing, have nothing and cannot pay you" to her doctors.    Just like you can't go out before a divorce and give away all your stuff to your buddy, and so on.  

 

In the long term, though, you would own the house and it would be just like owning a house.  Your mom will live there as "caretaker" or something, rent free (or not, whatever).  

 

IMHO you should be involved in the purchase of the home, then.  You should go with her to the closing and sign things as the buyer.   YOU should even pay for it.    This avoids any confusion and complexity later on.  The way you pay for it also can avoid taxes:  have her add you to her checking account, and you can write the check using your "joint" funds.   You should consult with legal advice and see if there are any gotchas doing it this way; I am no expert but it should work.  The issue with this method is simply trust between both parties.  She trusts you to not clean out her account etc, and she trusts you to not boot her out of the home or something, and so on.  Even doing it this way probably still qualifies as "her assets" under the time period I mentioned, so if she has bills in the first X years she still has to pay them etc. or the home could be considered "hers" when they trace all the money out during her bankruptcy paperwork. 

 

Cant be said enough to pay an expert for advice here.

Edited June 12, 2014 by Jonnin

[runco]

A suggestion, one can sell the house without registering the deed with a cash transaction.  The deed is a public record where as conveying the property privately is private with help of a notary.  If and when the deed needs to be registered for whatever reason, then this will be made public, and will show who is the real owner, thus protecting assets if needed.  If something was to happen while the deed was not registered to protect liability, the one on the deed may be the liable person.  I am not attorney, just have heard of this asset protection approach before in Tennessee.

 

There may be other risks to consider that has not been considered, what if your mother does indeed sell you the home.  Something was to happen to you, assuming you have a will, then your aires would be the owner of the home.  I hope your aires are on good terms with your mother, or your mother could be out, and she has no legal recourse. 

[midtennchip]

A suggestion, one can sell the house without registering the deed with a cash transaction.  The deed is a public record where as conveying the property privately is private with help of a notary.  If and when the deed needs to be registered for whatever reason, then this will be made public, and will show who is the real owner, thus protecting assets if needed.  If something was to happen while the deed was not registered to protect liability, the one on the deed may be the liable person.  I am not attorney, just have heard of this asset protection approach before in Tennessee.

 

There may be other risks to consider that has not been considered, what if your mother does indeed sell you the home.  Something was to happen to you, assuming you have a will, then your aires would be the owner of the home.  I hope your aires are on good terms with your mother, or your mother could be out, and she has no legal recourse. 

 

I would suggest NEVER doing this.  That is asking for trouble.  Too many possible problems (one of the parties dies, someone registers a deed without you knowing about it, someone filing a lien -- tax lien, mechanics lien, etc). 

 

Lager - I will send you a private message shortly.

[Mike A]

At the risk of sounding like the answer is always to seek competent legal counsel, that's the answer here.  You and moms are contemplating a transaction with lots of zeros.  Anything that even smacks of transferring assets to avoid liabilities is gonna draw attention. 

[Oh Shoot]

At the risk of sounding like the answer is always to seek competent legal counsel, that's the answer here.  You and moms are contemplating a transaction with lots of zeros.  Anything that even smacks of transferring assets to avoid liabilities is gonna draw attention. 

 

The "hiding of assets" thing aside, for sure there is the income tax liability of gifts beyond 14K/yr to consider, but you can probably get it covered under the lifetime basic exclusion of 5 million with proper filing of her taxes (and maybe necessary for yours too, dunno) -- which I wouldn't consider doing without expert help.

 

- OS

Edited June 12, 2014 by Oh Shoot

[bersaguy]

I heard on the news tonight about a woman that is going to have surgery a little longer down the road and she has a 401K account and she was looking at transferring it into her sons name to protect it should her hospital bills exceed what her insurance may pay. They said that she was not allowed to give the 401K account and if she did the hospital and medical people could take the funds away from her son to cover the costs insurance didn't pay and if that was not enough her and her son would both be liable to pay for the unpaid amount and even if she signed it over to him and then waited the allotted amount and time and went bankrupt the 401K account would be exempt from the bankruptcy and he creditors could still take it. They have got you any way you move any more so best to not bother trying to save and plan for a future because someone will just take it away from you anyway.They are even making it impossible to hide funds off shore any more. Just dig holes in your back yard and start hiding your saving in fruit jars or vaccum sealed baggies in fruit jars and keep a map of where you bury them.............jmho

[runco]

A suggestion, one can sell the house without registering the deed with a cash transaction.  The deed is a public record where as conveying the property privately is private with help of a notary.  If and when the deed needs to be registered for whatever reason, then this will be made public, and will show who is the real owner, thus protecting assets if needed.  If something was to happen while the deed was not registered to protect liability, the one on the deed may be the liable person.  I am not attorney, just have heard of this asset protection approach before in Tennessee.

 

There may be other risks to consider that has not been considered, what if your mother does indeed sell you the home.  Something was to happen to you, assuming you have a will, then your aires would be the owner of the home.  I hope your aires are on good terms with your mother, or your mother could be out, and she has no legal recourse. 

Like I said, I am not an attorney!  I further recommend if you do this, you trust the person with your life!  Not for the faint of heart!  The risk is great, but the reward is good as well for all involved.

[vontar]

I'm not an attorney as well.  I did stay in an expensive hotel last night but it was not a holiday inn express.

 

One thing I have seen done in my own family is deeds written passing property to another family member (younger, next generation) and having a clause in that says the former by name is allowed to live there until death.

In short, I don't have the exact phrasing but it ensures the person is able to live in what they consider their home while knowing they have taking care of their final wishes for the property down the road.

[Raoul]

I'm not an attorney as well.  I did stay in an expensive hotel last night but it was not a holiday inn express.

 

One thing I have seen done in my own family is deeds written passing property to another family member (younger, next generation) and having a clause in that says the former by name is allowed to live there until death.

In short, I don't have the exact phrasing but it ensures the person is able to live in what they consider their home while knowing they have taking care of their final wishes for the property down the road.

Life estate maybe?

[vontar]

Life estate maybe?

I don't know, it was on the deed.  I found it going though a safety deposit box.

I believe they just had it wrote into the Deed when they transferred it. 

[LagerHead]

All, thanks for the replies. I think I am going to talk to the folks at the Cain Law Firm based on both advice here and advice from Chip himself. I knew you all would come through.