Legal Question in Wills and Trusts in Oregon
Survivorship and real estate
Given that 4 adult children jointly own (survivors or heirs) mothers property (deceased 9/05) w/ equal shares. Are each of the shares independent of the others, allowing the owner to borrow against that share? Will the other children ''be joined at the hip'' if you will and be liable in case the one who borrowed money (from a financial institution) defaults? Are there ways to protect the other owners i.e. cost effective or would it be simpler to have one of the other survivors buy the other share holders out (the original plan)? The drawback to buying the shareholders out is financial, (credit score is somewhat low and concerned about arranging financing).
Thank you for your time and consideration.
JR
1 Answer from Attorneys
Re: Survivorship and real estate
If the property is valued over $90,000 and the property was not deeded to the 4 children before Mom died, then the children are not yet in title and won't be until a probate has been established and the property transferred through the probate.
At the time the property is transferred to the 4 children, title can be given to them in 2 ways, one with a right of survivorship and the other without.
Although one child might have the right to encumber his share of the property, he might find it difficult to find a lender willing to make such a loan because if the lender foreclosed on the property, the lender would own 1/4 of the property with the remaining 3 children.
It is always simpler for one or more of the children who want to retain ownership of the real property to buy out the ones who do not want to remain owners. Sometimes this can be accomplished over time rather than in a lump sum, with a land sale contract.
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