Can a co-owner be removed froma property deed in order to protect the other co-owners from possible future creditors?
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Can a co-owner be removed froma property deed in order to protect the other co-owners from possible future creditors?
Our 27 year old daughter is in medical school. She is listed on our deed as 1/4 owner. She will graduate in 2 years and will have tremendous student loan debt. Can or should we now remove her from our deeds by having her gift to the 3 of us her portion ? We have no reason to think that the issue will ever come up but who knows when things in life change such as marriage or whatever. She is and always has been a very responsible person and nothing appears to be changing at this time. We trust her and will compensate her when we can later on.
Asked on October 5, 2011 under Real Estate Law, Tennessee
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
Your daughter could transfer her interest in the property where she is a one quarter owner for the present time to you or some other third person in anticipation that she might owe on her student loand for medical school where she would show one less asset owned as something that a creditor could seek to levy upon in the event of a judgment against her for her student loans.
The problem is that under many statutes in the various states there are prohibitions against the transfer of assets with the intent to defraud creditors. Potentially the transfer of the one quarter interest could be deemed an invalid transfer to preclude creditors from acquiring an asset to satisfy a possible judgment in the future.
I suggest that you consult with an experienced attorney on the subject. One possibility is to put the one quarter interest in a trust.
Good luck.
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