Legal Question in Real Estate Law in California

Re: Tranfer house title and protect against liability and divorce

Why can the house not remain in your parent's names? Since the property is not owned by you, it is not an asset so not subject to the divorce. Seems that you are having your elderly parents support you which should not be occuring. You basically are acting as though the property was yours. They probably should set up a trust for their own tax palanning purposes

Re: Tranfer house title and protect against liability and divorce

Your factual circumstances are a bit vague here. Does the home belong to you now or is it going to belong to you at some point in the future from your parents? We would need to know more detailed facts in order to assist you here. Feel free to email our Law Firm directly with more details, especially since a divorce would have no legal impact on a home that belongs to your parents presently.

Re: Tranfer house title and protect against liability and divorce

Having the advantage of reading both prior answers before writing my own, I can add a few comments and observations that might round out the picture.

First, did your parents purchase the house from you? Did they pay fair market value? If so, a lawyer should inquire into the facts and circumstances of the transfer of the family house to the parents of one spouse around the time of separation. The lawyer should make sure that if the house were co-owned, or if there was any community-property interest whatsoever in it due to, e.g., making mortgage payments with the earnings of either spouse before separation. If there was even a sliver of community-property interest, you coulkd not sell it to your parents without your wife's written authorization.

If, on the other hand, neither you nor your wife ever owned the house, i.e. your parents bought it for fair market value from an unrelated third party, all you have to worry about is your wife's possible rights as a guest, lodger or perhaps a tenant in the house.

A lawyer trying to advise you would thus also want to inquire into the arrangement, lease, contract or understanding under which you and your wife, or your wife, came into or remained in possession of the house.

People who ask LawGuru questions know all their facts and too often incorrectly assume that the LawGuru lawyers will immediately know the rest of the story when part of it is told. We not only are not psychic, we are all too ready to imagine facts, alternate facts, scenarios and hypotheses that, to be professional, need to be inquired into.

With some further explanation, I could probably confirm that your parents have nothing to worry about, but I can't quite go that far based on what's before me.

By the way, putting the house in a trust, particularly a revocable trust, would provide little or no protection to your parents against adverse claims - neither a cloud on title nor a creditor claim is sheltered or removed by a revocable trust.

Finally, there is just a whiff of possible fraud in the facts given. Any transfer of property for below fair market value may be a fraud on creditors as well as a gift. That's why it is important to know if all transfers of the house have been for FMV and not to hide an asset from a spouse or other creditor. If your parents paid FMV, they you'd better give FMV for any benefit you receive from the house, whether it be sale proceeds, loan proceeds, the right of possession, or whatever.

Re: Tranfer house title and protect against liability and divorce

I would recommend placing the house into a family trust and providing a life estate for your wife. There can be other provisions instead of a life estate as well, such as an estate for years.

Please take a moment to familiarize yourself with trust and estate laws on our firm's site No-Probate.com. We offer free consultations and I believe we can assist you with your situation.

-Scott