Asking the right questions about being put on the deed of a house.

October 14, 2011 10:11 AM

My mom is discussing purchasing a house and putting my name and my sister's name on the deed as well as hers. What questions should we be asking before she does this?

My mom has newly remarried. She currently owns a house in Northern Virginia. She's getting less and less happy with the climate, and has been talking about moving to Texas or Florida for a while now. (Her new husband owns a house in a state further north and with worse winters than Va.) Today, she told my sister that she wants to buy a house in Texas outright, and keep it in her name and our names as well, leaving her husband off the deed (according to her, he's fine with this). She would be able to purchase the house in TX using equity from the VA house (which was bought when married to her first husband, our dad, and which she got in the divorce proceedings.) The house in VA would become a rental, or perhaps my sister, who lives in the area, would move in.

My sister and I are wondering about what questions we should be asking about taxes, legal ramifications, and whether or not leaving her husband off the deed actually means anything since they're married. (He seems like a nice enough guy, but we're less than certain about his family by his late wife - he has six kids and some grandkids and we don't know them at all. He doesn't speak very highly of them.)

We're definitely open to consulting an accountant or lawyer, we're just not quite sure if we know what we need to be asking them when we do. Additionally, my sister and I don't have a lot of money to spend on legal questions, so we want to be prepared as best as we can.

It may never happen - our mom frequently proposes plans and then doesn't follow through. She has already said that any questions or doubts we might have about this plan are crazy - in her mind, legalities frequently don't seem to apply to her. For example, before she remarried, my sister and I suggested she consult a lawyer or financial planner to make sure that she had all her ducks in a row. She reacted very badly to that, saying that of course there would be no problems, we were being ridiculous. So if there are any real pitfalls we haven't spotted, we'd have to prove to her that they are pitfalls, and not my sister and I being paranoid, which she frequently believes us to be. Any thoughts on this would be appreciated.

posted by PussKillian to law & government (12 answers total)

Ask your lawyers/accountants about being liable for any debt related to the house, and how it would affect your credit rating.
posted by ThatCanadianGirl at 10:17 AM on October 14, 2011

You don't say if you want to own this house, either now or later? I don't see the point of putting you on the deed at all....if this isn't something you or your sister are interested in. The legalities can definitely not be in your favor and the fact that you say that the legalities do not pertain to your mom (in her head), AND that you don't have the resources to ask an attorney/account/anyone....eeeh these are all red flags to me.
posted by wocka wocka wocka at 10:19 AM on October 14, 2011

As much as possible, avoid becoming legally or financially entangled with people who characterize your instincts to be thoughtful, cautious, and well-informed about significant legal and financial decisions as "crazy." Likewise, avoid becoming legally or financially entangled with people who consistently make bad choices on legal and financial matters. This isn't a straightforward case of needing to know what questions to ask because you're considering an option that would have you joined, legally and financially, with someone whose approach to laws and financial decisions you find reckless and foolish.

You don't need to prove to your mom that you're not paranoid. You do need to set appropriate boundaries with her regarding your legal and financial connections.

You: "Thanks, Mom, but I'm not interested in doing that."
Mom: "You're being crazy! There's no harm in this--it's a perfect plan."
You: "Mom, I hear what you're saying, but I'm not interested in being on the deed."
Mom: "Why are you being so paranoid?"
You: "Mom, I know you don't understand why I feel this way, but I need you to stop pressing this. I'm not going to do it."
posted by Meg_Murry at 10:44 AM on October 14, 2011 [5 favorites]

The big question is "why?" What your mom is trying to accomplish will go a long way towards helping you decide whether you should do this. If it's just to avoid probate or estate taxes, perhaps she should consider a living trust instead. If it's for asset protection from her current husband, know that Texas is a community property state so there's a chance it won't work out like she envisions.

Above all else, if the transaction won't benefit you and your mom in a significant way--that is useful for both of you--then don't do it. If she buys the house outright (I take you to mean "without a mortgage") and no liens are later attached to the house, she can easily put you or your sister on the deed. The county clerk and libraries in most Texas counties even have forms to do this.
posted by fireoyster at 10:59 AM on October 14, 2011 [2 favorites]

That second-to-last sentence should ready "can easily put you or your sister on the deed at a later date."
posted by fireoyster at 11:00 AM on October 14, 2011

If her hope is to make it so that you could have the house without waiting for probate or dealing with estate issues, my folks accomplished this (in another state, I have no idea if it'd work in Texas) by having a quick-claim deed with my brother and I on it that will be filed upon their death. It keeps us from being liable in the meantime while giving us access in the future.

A lawyer helped them find that solution (and would file the deed) - maybe you can tell your mom to consult a lawyer because they might have an innovative solution and other help for her?
posted by ldthomps at 11:05 AM on October 14, 2011

This article is specifically about California, and laws around this will vary by state, but it discusses the various pitfalls around this type of scheme from the parent's perspective. Basically you are becoming a legal co-owner of a house that your mom is really going to act like the sole owner of, and that can cause all sorts of problems. I personally would not put my name on a deed in this sort of situation, there are many better legal alternatives.
posted by burnmp3s at 11:07 AM on October 14, 2011

What would be the upside of having your names on the deed?
posted by craven_morhead at 11:11 AM on October 14, 2011

IANYL, TINLA.

Agreeing with people above, probably the main reason to do it is to avoid taxes if the house transfers to you and sibling after your mother dies.

You'll be on the hook for any liabilities related to the house. Since the house is being purchased outright, here are the things I would be worried about:

1) Payment of property taxes due on the house every year.
2) Liability for anybody getting hurt on the property.
3) Worry that your mother or sibling might use their share of the house as collateral for a loan.
4) Understanding that any outstanding debt owed by you, your mother, and your sibling might, under certain circumstances, be collected through the house.
5) Disputes with sibling on what to do with the house when mother dies.

There might be more issues, but it would be a good idea to contact both a lawyer and an accountant to understand all of it.
posted by jabberjaw at 11:24 AM on October 14, 2011

"whether or not leaving her husband off the deed actually means anything since they're married. (He seems like a nice enough guy, but we're less than certain about his family by his late wife - he has six kids and some grandkids and we don't know them at all. He doesn't speak very highly of them.)"

While I can't speak to your specific situation, this isn't an unusual set-up for couples with children from prior marriages who remarry later in life. (It's also not unusual in the other direction, where an inheritance from a parent is held by only the child and not the child's spouse.) It certainly CAN work and spouses certainly CAN hold property separately (subject to state laws, of course, and I'm not in a community property state so I know little about that). Whether it's a recipe for conflict, drama, and disaster depends on the specifics of the legal situation and on the individuals involved.

But yeah, this: "She has already said that any questions or doubts we might have about this plan are crazy - in her mind, legalities frequently don't seem to apply to her." is a problem and you're right to look for hidden pitfalls.
posted by Eyebrows McGee at 11:25 AM on October 14, 2011

by having a quick-claim deed

I think you mean quit-claim.
posted by zippy at 12:29 PM on October 14, 2011

My aunt did this with my three cousins, only to have one cousin claim "their" quarter of the house's value when my aunt sold the house. The repercussions were nasty and long lasting, for all members of the family, and were not limited to my aunt and her children: the quarrel went on for years, is still going on, and has resulted in a series of really appalling breaches between this branch of the family and everyone else. I'm talking physical violence, threats of legal action, slanderous letters and the deliberate isolation of my aunt from various members of the family.

Don't let your mother do this to you: it's a very bad idea.
posted by jrochest at 4:40 PM on October 14, 2011