What are the ramifications?

The MIL has more $$ going out than coming in and may have to file bankruptcy.

She is now wanting to deed her property, which is paid for, to her daughter so that if that happens she wouldnt lose the house. What are the ramifications for us (daughter, son in law) if that happens?

Who would be better to talk to, a property lawyer or someone that deasl mainly with estates or bankruptcy? Trying to get an idea of what to expect up front and if its even an idea to consider

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Posted by ForeLSU

The Corner of Sanity and Madness

Member since Sep 2003

41525 posts

Posted on 3/4/09 at 11:41 am to Chris4x4gill2

quote:
She is now wanting to deed her property, which is paid for, to her daughter so that if that happens she wouldnt lose the house. What are the ramifications for us (daughter, son in law) if that happens?

Who would be better to talk to, a property lawyer or someone that deasl mainly with estates or bankruptcy? Trying to get an idea of what to expect up front and if its even an idea to consider

I would guess bankruptcy...I think there are rules about property transfers within a certain amount of time before bankruptcy. In addition, the daughter may hit with tax on the value of the property (assuming it's over the gift tax exemption amount)

she might be better off calling one of the "I Buy Houses" guys and getting what cash she can for it.

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Posted by Chris4x4gill2

North Alabama

Member since Nov 2008

3092 posts

Posted on 3/4/09 at 11:49 am to ForeLSU

Any idea what the gift tax exemption amount is?

In all honesty the property is not worth much. Whenever she leaves, that house will have to be bulldozed.

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Posted by Cold Cous Cous

Bucktown, La.

Member since Oct 2003

15045 posts

Posted on 3/4/09 at 11:51 am to Chris4x4gill2

You should talk to a bankruptcy lawyer if you think that's a real possibility. Bankruptcy judges have the authority to cancel these kinds of gifts if they think it's been done in bad faith to avoid paying your creditor.

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Posted by Meauxjeaux

98836 posts including my alters

Member since Jun 2005

39899 posts

Posted on 3/4/09 at 12:05 pm to Chris4x4gill2

Make sure this is done WELL in advance of her bk - 12 months minimum and 18 to be on the safe side.

She'd be better off finding a way to encumber her property with "friendly" debt thus making it unusable for seizure and sale to satisfy creditors.

Talk to an asset protection group - APCG in Las Vegas would be a great start. You can find them on the web.

BTW, I only advocate this in order to buy time to pay your debts.

I've done it once and paid everyone I owed off - took many years.

I'm doing it again now although I have true debts that encumber my house with not enough equity to satisfy any others.

I made my debts, I pay them.

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Posted by Chris4x4gill2

North Alabama

Member since Nov 2008

3092 posts

Posted on 3/4/09 at 12:24 pm to Meauxjeaux

quote:
BTW, I only advocate this in order to buy time to pay your debts.

I've done it once and paid everyone I owed off - took many years.

I'm doing it again now although I have true debts that encumber my house with not enough equity to satisfy any others.

I made my debts, I pay them.

I agree completely. My stance is that we arent going to help her one bit until she starts helping herself. She wants a handout and for us to bail her out, but so far is unwilling to make changes. I am not going to help with anything only to be back in worse shape next month.

The wife agrees, but wanted to look into the transfer of the property. I can say now that I've looked into it so thanks guys. I guess I need to make an appointment with a bankruptcy lawyer.

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