The Dangers of Homemade Estate Planning
There are a lot of things that are better homemade. Bannan pudding comes to mind, here. And Christmas tree ornaments. But when it comes to planning how a family member’s assets will be distributed after their death, it’s really best to out-source the job to a pro.
Here’s the fact pattern that bankruptcy attorneys hate to see: a middle-aged woman comes in to discuss filing a chapter 7 or chapter 13 bankruptcy case and begins describing her assets, one of which includes a house that her elderly parents live in and, until recently, owned free-and-clear of liens. In a well-intentioned effort to reduce the legal cost and confusion of administrating a decedent estate after their death, however, they have deeded the property to their daughter, who will own it “in name only” for the duration of their life. The problem is, in bankruptcy, the “name” is the only thing that matters. It doesn’t matter who paid for the house, who lives in it, who pays taxes on it, who mows the lawn, why the transfer occurred, or even that the recipient gave nothing in return for the property. In the Eastern District of North Carolina, the court only looks as far as the deed or title in determining ownership. What’s in a name? In bankruptcy court, a whole lot.
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For more than 20 years, the Sasser Law Firm has been helping individuals and business owners sort through financial hardships to see the light at the end of the tunnel. Our North Carolina bankruptcy attorneys are all board-certified specialists, which means we have passed a complex exam, undergone a thorough peer review, and continue to earn legal education credits in this ever-evolving area of law.
