Parents gifting house

[GoGoGophers]

Hello Everyone,

This is my first post to the forum and I hope I'm putting it in the right category.

My attorney just filed my Ch 7 and I have a 341 meeting scheduled for mid-Feb. It is a no-asset, below median income BK. All of the debt being discharged is on unsecured credit cards. No exotic purchases, just living expenses while I was out of a job. I finally have a job now, but it is low-paying and there's just no way to make ends meet while paying those CCs.

My parents have just informed me that they are buying a condo. It is totally in their names and they intend to gift it to me in "chunks" of ownership over the next few years. It is a problem I am very happy to have. I had no idea they were thinking about doing this when I filed my BK and they didn't actually know (and they still don't know) about my BK when they decided to do it. It is part of their estate planning.

Given my BK 7, are there any recommendations from the forum on how long we should wait after the BK before the first piece of ownership is gifted? Any ideas are greatly appreciated. Thanks in advance.

[debee]

11 USC 541 defines property of the estate and what you receive as a gift after filing is not property of the estate. That means the trustee has no legal right to it. If you receive a gift after filing (of whatever kind or value) you don't have to report it. $50 bucks or $50K. It's yours. Having said that, this issue came up in another thread recently and most forum members there advised caution and delay until at least discharge, preferably closing. Probably a good idea to run it by your attorney.

[despritfreya]

There should be no problem with the "gift". As debee points out, after acquired assets (with a few exceptions) do not become property of the Chapter 7 Estate.


It sounds like your parents are going to set up a family limited partnership (you will be a limited partner with no rights to control the partnership assets), transfer title to the home into the partnership and, over the course of years, shift the equity of the partnership from them to you. This is a standard estate planning tool and, if set up correctly, cannot be reached by your creditors regardless of the bk.

Des.