Legal Question in Real Estate Law in Utah

Re: Shared home title w/mother dispute

Your facts are not complete. If you owe on the mortgage with your mother (both signed), you will remain liable for the debt on the house until the house sells or is refinanced. If there is no balance owed or you did not sign on the mortgage, but your name is on the title, your name can be removed with a quit claim deed - although that may not be the best move.

The preferred solution would be to title the property in the name of a trust - an trust which is irrevocable as to your mother's interest. Her portion of the house would be owned completely by the trust. She would be given the right to live in the house until she dies or is declared incompetent and requires full time care (or some similar provision). If she does not own an interest in the house (since the trust owns it) she would not lose it in bankruptcy. She has to have the trust in place for at least one year prior to declaring bankruptcy. Furthermore, if she eventually had to be placed in a care facility, the house would not have to be sold to pay for her care (again because the trust owns the house.) Generally the trust must own the house for at least 3 years before this protection is effective.

Placing the house in the trust does not need to affect the mortgage - and so long as payments are made on the mortgage the house will not be foreclosed.

Note that just because your mother declares bankrutpcy does not automatically place a negative credit report on your credit, even though both of you may be on the mortgage. Your credit will remain good so long as payments are made. The risk at bankruptcy is that there may be sufficient equity in the house for the trustee to require some sort of payment from your mother for her share of the equity. However, because of the age of your mother, this is not likely. There are other solutions - i.e., a Chapter 13 bankruptcy for your mother, where she retains all of her property that she wants, subject to making payments on the property to lienholders and some (small) portion to unsecured creditors.

You and your mother should visit with an attorney to discuss all of your options while you still have time to plan. If you wait, the situation may require more immediate action which may limit some of your problem solving options.