Do I have to list my mom’s property when I’m on the title? Avoid joint titling to protect against creditors
Posted on Mar 22, 2009 in Uncategorized
My client says he is jointly titled to his mother’s condo in Florida in case she dies. Now he’s thinking about bankruptcy.
Yes, the client would have to schedule his ownership of a half interest in the property. He could claim that it is not intended by his mother to really be a present interest in the property. But the trustee has the rights of an ideal hypothetical judgment lien creditor. That’s a fancy way of saying that the trustee would be able to get a lien on my client’s half interest in the property and it wouldn’t matter whether the debtor’s interest was not intended to be effective until his mother died.
What does this mean?
It’s better to have title set up so that it does not come into effect until mom passes away. For example, one could set up a life estate followed by a remainder interest. One could set up a trust which has a beneficiary upon the death of the present owner. One could actually write a will.
And the same is true for mom or dad’s checking account. It’s better to have a power of attorney than a joint checking account if there is any concern about the possibility that the joint owner of the account may be subject to claims of creditors.