Posted by Jim Addison on March 03, 2005 at 17:37:32:
I have a unique situation here. My aunt owns a house with only her name on the title deed. She wants to do a quit claim and ultimately wind up with both her name and her brother’s (my dad) name on it. She will still live there. My dad’s name is going to be on the title as well.
Now after doing this, my aunt wants to then do a living trust and put her 50% interest in the house into her living trust. She will make me and my sister beneficiaries or successors (if this is the correct term) of her 50%.
My dad is going to do a living trust as well and put his 50% interest in this house into his trust. He may leave his 50% to me and my sister but more than likely to our mother.
My question to you is “can this be done?”. I guess other questions that come to mind are “what kind of exposures to taxes, probate, etc. are in place with this kind of setup?” and “have other people done this sort of thing before?”
I’ve told my aunt to leave the title the way it is and quit claim the whole house into her living trust and name my dad as a beneficiary of 50% with the other 50% to my aunt while she’s alive and then leave her 50% to my sister and I upon her passing. The same aforementioned questions apply to this scenario as well. I’d greatly appreciate your input on this matter.
Posted by Ann Marco on January 27, 2005 at 12:17:56:
I am helping my daughter purchase a house. She has bad credit so the loan will be in my name. She wants me to sign a quit claim deed. What are the pros and cons to signing a quit claim deed if the mortgage is in my name?
Posted by River City on January 28, 2005 at 06:22:04:
I am with Tom on this one. There is no way I would purchase a home on my credit and then sign total title over to someone else. This would mean that she would have all rights to the property and you would be making the payments and have no rights. As Tom said, she could put a second mortgage on the home without your knowledge. A default on a second can trigger a default on the first.
Don’t do it. That would be a VERY BAD move.
As a matter of fact, due to her poor credit history, I would not even put her name on the title. She should have NO ownership rights if she cannot qualify for the loan because of a poor credit history.
Needing some assistance to qualify for making payments is one thing. This is why most lenders will not accept a non-occupant co-signer for someone who has bad credit.
Cons: When she stops paying, it’s your name on the note. The mortgage company will come after you. You have no way to mitigate your loss, such as selling the house (since you don’t own it). In short, your bad credit daughter has full control and no obligation. You on the other hand, have no control and complete obligation.
Why would she ask for this? Could she be thinking of using her newfound “Homeowner” status to get a home equity line? They offer them up to 100% and 125% you know.
This certainly looks like a recipe for disaster to me.
Maybe you could suggest that when she gets her own loan and pays your loan in full, you’d be happy to sign a quit claim deed.
Posted by Ann Marco on January 29, 2005 at 14:29:51:
Totally got the point. Thank you very much for your time and the help. Will certainly take your advice! She says she wanted me to sign a quit claim deed in case I died she would have no claim to the house.
Valid concern on her part. That can be accomplished by proper estate planning though. You don’t have to put her on title now. There are deeds that specifically address these issues. A living trust might be an option as well. You could probably chat with a real estate attorney or even a title agency about her concerns.