How can I protect my home with 10% equity from a lawsuit if I lose?
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How can I protect my home with 10% equity from a lawsuit if I lose?
My grandparents are going to buy a home for my family. They are currently residents of anothr state. The plan is that when we are able to, in the next 5-7 years, we will purchase the home from them. However, they are in the middle of a personal lawsuit. So, how can they protect the house from being taken in the lawsuit if they lose? Would a trust protect the home? Would a judge take a home with only 10% equity or less? And would financing the home with an in-state bank protect them?
Asked on September 19, 2012 under Bankruptcy Law, Illinois
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
If the home that you will be buying from your grandparents is transferred into your name via a legitimate buy sell transaction where a purchase agreement has been signed by you and your grandparents and title is transferred through an established formal escrow, you will not lose the home.
What you need to do with respect to the delayed transfer of title to the home to you is to consult with a real estate attorney about preparing an notice of a buy/sell agreement (option to buy) have such signed by your grandparents before a notary and have such recorded with the county recorder's office as to the home. In the interim your grandparents could gift you certain percentages of the home over time before the purchase contract is exercised.
Given the complexity of the situation you are writing about you and your grandparents should consult with a real estate attorney to assist you in your endeavor.
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