My mother added me and my sister to her house deed, now I'm filing ch 7, problems?

[murphsmom]

Back in August, at the suggestion of her financial adviser and with the approval from her attorney, my mother added my sister and myself to her house deed to protect the home from being taken by Medicaid if she ever needed long term care (she's healthy as can be as of now, thank God).

I'm preparing to file Ch7 jointly with my husband in about 2 weeks. Will me being on the deed to my mothers home (no funds transferred, she has lifetime ownership rights and we don't reside there), be an issue at ALL?

She owns the home outright, there is no mortgage, and it's worth approx. $80,000.

I totally forgot about this, and now I'm freaking. If needed, I will remove myself from the deed.

Thanks

[tobee43]

actually, i would just be honest about the situation and immediately have your name removed from the deed.

the reason i'm suggesting this, is because, prior to aug of this year, you should be able to prove the deed never had your name on it,so it wasn't for reasons of hiding assets.

let's say for an example YOU owned the house, and changed the deed within the past six months and put it in someone elses name. then, one would likely think the trustee would question it.

ask the financial adviser to reverse the situation by doing a quit claim deed. also let your mom's atty know and they may be able to advise you the best way to protect your mom's interest in the property.

additionally....what's the bottom of line of your third...would it really effect the outcome of your bk???? if not...well, then you should be fine anyway. if it does, do what your mom's atty advised to help protect her home.

best of luck! it will work out.

[frogger]

It's not as easy as removing yourself from the deed.........

When you were place on the deed, you were given ownership rights to the property. With that being said, regardless of if you paid any money for the property or not, you have ownership rights that the trustee is going to be interested in.

Removing yourself from the deed may only create you more problems, so do not do that at this time. You need to speak with your bk attorney and see what may or may not fly in your area.

And on the other hand, you may have to remove yourself from the deed and wait this one out for a couple of years.

Good luck.

[murphsmom]

Well, crap. I simply cannot and will not allow my bankruptcy to affect my mother in any way. I had absolutely NO intention of filing bk until a few weeks ago. If this is going to be an issue, then I'm just not going to file. I feel sick to my stomach.

[tobee43]

It's not as easy as removing yourself from the deed.........

When you were place on the deed, you were given ownership rights to the property. With that being said, regardless of if you paid any money for the property or not, you have ownership rights that the trustee is going to be interested in.

Removing yourself from the deed may only create you more problems, so do not do that at this time. You need to speak with your bk attorney and see what may or may not fly in your area.

And on the other hand, you may have to remove yourself from the deed and wait this one out for a couple of years.

Good luck.

frogger we did remove ourselves from the deed of a co owned property, but, we were also able to prove the other party added us later. we in fact listed it on our petition and we were, asked by the trustee about the situation.

we produced an older deed showing we were added at a "way" later date and the trustee saw it was not OUR property...it was in fact US that was added onto the deed. we did the quit claim and it was fine and done within 6 months of our filing.

i know we really didn't have to disclose this, if we were not honest because it was so buried, but we wanted to be as honest as possible. we did call the other parties atty to make certain they were protected and that's when we were advised to get our names off and given a copy of the original deed showing we were not listed on it, but added later.

[murphsmom]

I can definitely prove that she added us after years of owning the home herself, that there was no money transferred, etc... I can prove that we don't live there. My sister is also on the deed and she resides in Florida.

There is no current value to being on the deed to this house. For the next 4+ years, there STILL won't be any value because Medicaid can claim the home up to 5 years after the deed transfer. Unless my mother passed away soon, and we "inherited" the home, which of course we would tell the trustee about, I just don't see why the trustee would be interested in this. Yes, I'm on the deed, but there is NO financial gain whatsoever for at least 4+ years.

[frogger]

You need to speak with your bk attorney and see what may or may not fly in your area.

Once again, you need to see your bk attorney.

[murphsmom]

He's my next phone call....

Honestly, this is all just hitting me so hard today. We have no assets, nothing to hide, have just been trying to keep our heads above water since Sept 09 when my husband lost his job. This all seems so DIFFICULT and worrisome. I just want/need this to be over. Between mortgage modification, calls from creditors, being flat broke, preparing to file, ammending our taxes, paying for appraisals and waiting for results, using CC's within 90 days because I wasn't planning on filing jointly, tapping out the 401k completely, job searching, unexpected expenses popping up all over, and now this worry about the deed, I'm about ready to burst.

[Pandora]

... I just don't see why the trustee would be interested in this. Yes, I'm on the deed, but there is NO financial gain whatsoever for at least 4+ years.

The trustee will be interested because of what is often referred to as remainder rights or "waiting rights", that being that once your mom passes away, you are entitled to full ownership of the property (or to be divided equally amongst siblings).

As frogger stated, you really need to talk with your attorney about how it will play out for you in your BK.

Read the following:

http://www.nypost.com/p/news/local/piece_of_surreal_estate_oCyIYsf9oys6PCkEcPNBYN

Where is Lady when ya need her? She's great at the estate stuff


ETA: found a few cases that would apply so you can read up on them.

http://www.sdb.uscourts.gov/Decisions/2004%20Decisions/2004%20-%2036%20Britt.pdf

also see

State ex rel. Cooper v. Cloyd

In re Dennison, 129 B.R. 609 .

[debee]

Don't quit claim yourself off the deed. What you may want to do is list it on your schedules, subtract your Mom's lifetime interest (which you lawyer can value) and then split the remainder in half (between you and your sister) and then exempt the remaining share.

eta: Also, have your attorney look into having your Mom terminate your remainder interest before you file. This is not the same as you doing a quit claim.

[tobee43]

i think it's going to depend on the situation....

we quit claimed ourselves off the deed but the circumstances were a long term situation. we STILL had to show the deed to the trustee. we have been through this situation so, i'm only telling you the experience we went through and it worked out well for us.

now...about what pandora is pointing out...this really is a sticky situation because we aren't talking about what is left in your mom's will as with a probate issue, and if you will inherit the house etc. we are talking unfortunately talking about the fact you got put on the deed last year. (not like an on going trust issue). unless you are awaiting a probate court to distribute assets from an estate.

besides as pointed out prior and by other PP...if you have no assets, your interest in this property may be exempt anyway.

first you need to protect your mom's home...that's why i'm suggesting to call the atty that had you do this first.
second call you bk atty...many, like ours had NOT a clue what to do. so it's just good to cover all sides....
hopefully lady will be here later to clime in with some other direction or suggestion that can help!

[murphsmom]

Talked to the attorney, and I'm just floored. He said that yes, most definitely the trustee can claim my 1/3 interest in the property with an approximate value of $25k. With our current mortgage exemption this would push us over the exemptions. He specifically said "yes, this could put you in a position where this could cause some difficulty for both you and your mother". If I quit claimed at this point, all to my sister, then the trustee could go after HER property.

I am not going to be able to claim bankruptcy. I simply will not put my extended family in this position.

I'm just flabbergasted right now. My husband is still filing solo, and can do it any time. At least I don't have to be concerned about using my CC cards these last 90 days.

One thing is for sure, this has been a total roller coaster ride, and really speaks to the fact that preplanning is essential. If you even THINK you are getting into financial distress, certainly don't add your name to anyone else's deed thinking you are doing a good thing for them! UGH!

[tobee43]

Talked to the attorney, and I'm just floored. He said that yes, most definitely the trustee can claim my 1/3 interest in the property with an approximate value of $25k. With our current mortgage exemption this would push us over the exemptions. He specifically said "yes, this could put you in a position where this could cause some difficulty for both you and your mother". If I quit claimed at this point, all to my sister, then the trustee could go after HER property.

I am not going to be able to claim bankruptcy. I simply will not put my extended family in this position.

I'm just flabbergasted right now. My husband is still filing solo, and can do it any time. At least I don't have to be concerned about using my CC cards these last 90 days.

One thing is for sure, this has been a total roller coaster ride, and really speaks to the fact that preplanning is essential. If you even THINK you are getting into financial distress, certainly don't add your name to anyone else's deed thinking you are doing a good thing for them! UGH!

i'm so sorry this didnt' work for you. our focus was to protect the other person and their interest, not so much for us, and for us it was only one other person so there was no one else to go after, also the fact it was done (our names put on the deed) well over 10 years prior to our filing..

any chance you can file a 13?????

[debee]

Talk to your attorney about having your MOM terminate your remainder interest.

[murphsmom]

I will look into filing a 13. I have two major debts, both with the same bank, A CC card with a $10,000 balance and a debt consolidation loan with an $11,000 balance. My husband has all other debts and household bills, literally everything, in his name alone, including our mortgage.

He's going to move forward with filing ch7 asap. We've paid the attorney in full so he can file anytime, and he is ready.

Just stinks that now I may have to file a separate 13, and pay all those attorney fees again. I'm thinking of calling the bank, seeing if they would roll in the current CC bill into the current debt consolidation, and refi for a longer term at a lower rate.