In Active Chapter 13 - May be added to deed...ramifications?

[craig1023]

What is the name of your state? Texas

Hello,

I'm currently still in an active chapter 13 (100% plan) and current. My parents who are in their 80s want to add me to the deed of their home and investment property - I know they are working with an estate planner so I am not as concerned about their risks but I am concerned if this will expose the property or myself somehow in my active Chapter 13.

Specifically, I see two concerns:

1) If my 13 was ever dismissed for any reason, and I had to resubmit....I'd then have to declare the ownership in those properties I'd assume
2) If I stay on my current track in the active 13, I'm not clear if I need to let them know of the ownership of new property and if somehow they'd increase my payment or want to sell the property to make the creditors whole in much faster manner.


Thoughts? Thanks

 

[adjusterjack]

Texas has a pretty general homestead exemption from creditors, virtually unlimited. But I am a little fuzzy about whether that protection applies to an owner who does not live there.

I suggest you wait until your bankruptcy runs its course.

And better than being added as an owner on the deed, have your parents consider a beneficiary (transfer on death) deed.

That avoids probate while eliminating any risk you take by being an owner.

Discuss it with them.

 

[LdiJ]

What is the name of your state? Texas

Hello,

I'm currently still in an active chapter 13 (100% plan) and current. My parents who are in their 80s want to add me to the deed of their home and investment property - I know they are working with an estate planner so I am not as concerned about their risks but I am concerned if this will expose the property or myself somehow in my active Chapter 13.

Specifically, I see two concerns:

1) If my 13 was ever dismissed for any reason, and I had to resubmit....I'd then have to declare the ownership in those properties I'd assume
2) If I stay on my current track in the active 13, I'm not clear if I need to let them know of the ownership of new property and if somehow they'd increase my payment or want to sell the property to make the creditors whole in much faster manner.


Thoughts? Thanks

Do your parents really want to add you to the deeds? I ask, because its really not in your best interest, tax wise. If you inherit the properties after they pass away, you get a stepped up basis to fair market value as of the date of their deaths, therefore you do not have to pay capital gains tax on the sale of the properties if you sell them right away. If they add you to the deeds now, instead, then your basis would be their basis.

Unless the costs of probate are so high in your state that they would actually be higher than capital gains taxes (highly unlikely) you are better off inheriting the property.

 

[HRZ]

Double check but a TOD prevents you getting it any too early and gives you stepped up basis ...there are other ways but this may be simplest .