May have a house put in our name

[kathy09]

We were discharged and our case closed last month. Now what I was wondering, is it OK now for my in laws to put their house in my husbands name? They have decided that after they pass they want to make sure their house goes to my husband. He won't be getting the house until they both pass away so hopefully that would still be a long time but can it be a problem for us this soon after BK 7? We did not know about this until today so I wanted some opinions from people who know more about this then me.

[btbeme]

There are two risks with this. First, God forbid, they pass away in the next 6 months after filing, the house becomes an asset which the Trustee can investigate and re-open the file, sell it, and distribute the proceeds.

Second is the empirical financial strategy of simply signing over a house without the use of some sore of estate planning mechanism. I am hoping that there will be a life estate, or a trust, or at least a will involved. It would be very wise for you t get together with an estate planning attorney and an accountant as well so you fully understand the tax implications - if they exist - of such a transaction. You don't want a financial "surprise."

[TheBajan]

Why don't your in laws simply write it into their will? Or even better, create an estate and transfer it to the estate and then have an estate plan in place for when they pass? Transferring a house into your husbands name before they pass is not as simple as transferring a car. There can be tax implications so get with a tax attorney as well as an estate planning attorney. I am in a chapter 13 so I'm not sure how it can be affected by your recent chapter 7 but it sounds like btbeme knows a little about this so check with your BK attorney also.

Do you mind if I ask why they are in a hurry to make this transfer right now? Why not go through the normal channels of making their wishes known and transferring it upon their passing?

Best wishes to you and congrats on your discharge!

[justbroke]

I have to agree with the above. However, be very aware of Living Estates and managing the estate should the person pass. We had similar problems where the estate was never closed and the property remained in the name of the living estate. Such a mess! Also, the will is important to make sure there aren't too many probate issues -- which is another set of problems when there are others that may make claim to the same property.

An estate attorney is the person you should be speaking with.

[tobee43]

there is also something else to consider.

once you change a deed, if your in laws still have a mortgage the bank can call in the mortgage and demand payment in full. it's not worth messing with. as others above suggest go to a GOOD estate atty. the house will be protected and their wishes will be heard loud and clear in a legal document.

and, again, since their intentions are after they pass, it just should be included with the estate as what benefit is there to add his name now?

[kathy09]

The house is paid for they don't owe anything on it. My mother in law was told that if for some reason they were put in the nursing home then medicade could take their house. My questinon is can it hurt us in anyway because of the BK I thought once you get a case closed like we have that its all over but I might be wrong, does anyone on here know if this is the case?

[justbroke]

Your case "is" over with a minor exception. If you inherit property (bequest), or are awarded property as part of a divorce settlement within 180 days of filing, then it "is" property of the Estate and your bankruptcy re-opens! That is what you're trying to avoid.

Looking back at the responses, it wouldn't matter which way you title or place the property into any sort of living trust or bequeathed through a will. The fact is the 180 day rule on property that is inherited, a death benefit, or through divorce. Even if you put it into a Living Trust or had a will, nothing will change the 180 day rule.

So, you are best served by reaching out and obtaining a free consultation with several estate planning attorneys and find out the best course of action for your specific case.

As for Medicaid recovery, it's really about paying the costs associated with end-of-life care. If you -- the children -- paid the expenses of hospice and/or nursing home care, then there would be no Medicaid cost to recover. It's all about the recovery of the costs. As morbid as this may sound, you probably need to work on an end-of-life scenario as well. I would think a good estate planning attorney could help with all these important decisions.

(I'm just guessing, but if your case closed last month -- let's just say 9/15/2012 -- then you probably filed around 6/15/2012. That means your 180 days would be up 12/15/2012. Unless an unfortunate event happens really soon, this could be a non-issue. I suggest rather than speculate about the impact of various events (Medicaid, BK Inheritance Exception, etc), start with some Estate planning. You will probably feel much better knowing all the intricacies of passing title of property upon death, as well as tax issues.)

[tobee43]

jb you are very correct that 180 day "waiting" period would still apply no matter what was in a living trust, will, estate...it would still be subject to the possibility of re-opening your bk case. my above answer was based of course not considering that 180 "waiting" period. i just don't like thinking that way...but it can be a reality for certain.

JB: So, you are best served by reaching out and obtaining a free consultation with several estate planning attorneys and find out the best course of action for your specific case.

it's your safest way to go, just to make certain your covered whatever the circumstance.

[kathy09]

Ok are you saying that after the 180 days its safe to put the house in my husbands name? I firgure it will be at least March or April before this is done anyway. They are right now trying to decide on if they want to do that or just sell the house. I don't care either way because i"m not going to live in it anyway.

[tobee43]

basically, but of course in "good" faith.

[kathy09]

Well I don't have to worry about it now they decided to sale the house so they can move to Texas close to their other son. I really didn't want the worry of her house I just got through a 7 and looking forward to being bill free except for our house and car which will both be paid off in 5 years.

[tobee43]

Well I don't have to worry about it now they decided to sale the house so they can move to Texas close to their other son. I really didn't want the worry of her house I just got through a 7 and looking forward to being bill free except for our house and car which will both be paid off in 5 years.

life changes everyday, that's for certain! best of luck to you!