Legal Question in Wills and Trusts in California

Transferring home to non-relative using irrevocable trusts

I've been told I can use an irrevocable trust to ultimately gain ownership of a home. If someone is selling a home in a short sale and doesn't have any equity in it, can the sellor set up an irrevocable trust to transfer the home into a trust account? If so, then the person selling home can "walk away", we move in, then assume the making the payments to the lendor using a bank as the entity making the payments to the lendor. Then when we want to refinance the home, we would cancel the trust then refinance. I want to be sure this is legal. Also, would we be able to write off the interest paid in the home on our taxes?


Asked on 12/29/99, 2:06 pm

1 Answer from Attorneys
WILLIAM BRANDWEIN WILLIAM A. BRANDWEIN, A PROFESSIONAL LAW CORP.

Re: Transferring home to non-relative using irrevocable trusts

I would advise against any such technique. Creating an irrevocable trust is fraught with all sorts of danger signals. Easier to get in then to get out because irrevocable means it can't be changed. Has all sorts of tax consequences and other legal entanglements.

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Answered on 1/05/00, 12:09 pm


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