Posted by John Merchant on March 23, 2005 at 10:26:27:
I sure wouldn’t feel comfortable advising any wife to go along with this plan, and I’d want the W to have a lawyer draft the trust, then have the deed go into the name of that trust.
While Fed law (Garn St. Germaine Act) does allow a trust without giving rise to the mortgage company’s right to foreclose, the terms of the trust itself should clearly reflect both H&W as owners/beneficiaries of the trust.
Now, if hte lender is not happy with the trust being in title ab initio (from the get-go, as we’d say in TX), I’d advise the W to have her name on the deed as one of the owners of record.
I need assistance urgently, please! We are moving into a new home next weekend. My husband stated it would be better for taxes,protection of property, etc. if he puts this new home into a land trust with the title only in his name.
What rights do I have as the spouse if this takes place? We will be paying the mortgage together. If God forbid our marriage does not work out, do I have any right to claim this new home as marital property, therefore subject to the equal distribution of equity? Our state is an equitable distribution state.
Re: PRIMARY RESIDENCE AS LANDTRUST - Posted by Been There
Posted by Been There on March 27, 2005 at 11:29:36:
Actually there may well be disadvantages to holding your primary residence in a trust. For instance, you could lose the owner exemption to capital gains upon sale for instance. Check with your CPA on this.
But futher, if the property is titled in a trust, your husband would not be the “owner” of record. The trust and/or trustee would, depending on your state. Presumably your husband would not be the trustee or then this trust would lose some of the benefits of confidentiality of the trust. Certainly if you and he are both beneficiaries then there would not be a problem.
Finally, divorce laws vary by state. But in many states a spouse would have marital rights to a property acquired with joint funds, whether her name is on the property or not. You should check with a lawyer in your state. In my state for instance, my spouse could not waive her marital rights even if she wanted to.