Can puttingmy house in trust protect it against a civil judgement?

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Can puttingmy house in trust protect it against a civil judgement?

Someone is in the process of suing me for car accident. My house is almost paid off. Can they fore me to sell my primary? I don’t have anything other than the house. How to protect my house?

Asked on August 23, 2011 California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

1) They can't force you to sell the home. If they get a judgment against you which you do not pay, they could possibly put a lien on the home in the amount of the judgment. The effect of the lien would be that you could not sell the home without paying the lien--but nothing happens until the home is sold. So, for example, say  you owe $50k on the accident and don't pay any; suppose the home is worth $300k; a $50k lien would be placed on the home, and when you sold it, $50k of the $300k would go to pay the lien.

2) Generally, the only way a trust can protect property is if it is an irrevocable trust--i.e. you'd lose all control of your home forever.

3) Even given the above, if a transfer of property is clearly done to prevent it from being used to pay just debts--i.e. to defraud creditors--courts may be able to set the transfer aside. So a trust set up "just" to protect property when there is a lawsuit against you may be one that can be undone, anyway.


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