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Over two years ago, I transferred title to my son on my real estate property in South Carolina due to illness.

Charleston, SC |

The deed shows that my wife and I have a Revocable Joint Living Trust. Since title is in my son's name, am I protected from creditors even though I hold the mortgage?

Attorney Answers 5


  1. So-I assume the deed was from your joint trust to your son.
    If so-your creditors could not take the transferred property but your son's creditors
    could.
    Let's hope your son does not have a auto accident, divorce, or some other creditor problem.

    The answer given does not imply that an attorney-client relationship has been established and your best course of action is to have legal representation in this matter.


  2. I'm not sure a mortgage holder is completely protected, even if they do not hold title to the property. AS the other attorney explained, any judgement (for example) against a property holder attaches automatically to real estate. If the property holder is sued and loses, that judgment attaches to their real estate. If the judgment holder (winning party in the lawsuit) decides to foreclose on the real estate to collect their judgment, the mortgage holder would be first in line to collect. If the foreclosure and sale of the real estate does not cover the mortgage, the borrower would likely owe a deficiency (the difference between the money collected from the foreclosure sale of the property and amount owed. While you or your wife are alive, there is not protection through the living trust, because of the way a living trust is designed. Even after death a trust may still owe a deficiency under the above scenario, if the trust is the borrower on the mortgage.

    You can see how this gets complicated, quickly. It may not be a great idea to have a mortgage for another's property. There are ways to plan for transfer of title or management of assets during illness or after death. An attorney can help plan for these issues, help clear them up before a creditor, for example, comes calling and provide the right service to make sure everything is documented properly. What are the odds of this happening - no idea, but the attorney can help decide your best planning moves.

    Good Luck,
    Ian A. Taylor
    The Taylor Law Office L.L.C. | (843) 314-4313
    Pawleys Island, SC
    Estates. Probate. Adult Guardianship. Real Estate. Insurance.

    The Rules of Professional Conduct for my state only allow me to provide general legal information regarding your question. I am unable to offer my services directly or specific answers to your question. The information provided is not intended to create an attorney/client relationship and shall not be construed as legal advice. Therefore, the resources or information given is provided as general information only. I caution Askers not to attempt to solve individual problems upon the basis of the information contained therein.


  3. If the property was transferred correctly to your child, then only his creditors would have a valid claim to it. I encourage you to discuss this at length with an experienced probate or estate planning attorney as your facts are somewhat brief here and may not provide everything needed for an accurate answer.

    NOTE: The use of the Internet for communications with the firm or this attorney will not establish an attorney-client relationship and messages containing confidential or time-sensitive information should not be sent.


  4. If title is out of your name then the title to the real estate may be safe from creditors. The mortgage itself and the transfers may be more questionable and a real estate or estate planning attorney may need to read the terms to determine the creditor protection status further.

    Evan Guthrie Law Firm is licensed to practice law throughout the state of South Carolina. The Evan Guthrie Law Firm practices in the areas of estate planning probate wills living trust special needs trusts personal injury accident and divorce and family law and entertainment law. For further information visit his website at http://www.ekglaw.com . Forbes http://blogs.forbes.com/people/evanguthrielawfirm/ Findlaw http://pview.findlaw.com/view/4647185_1 Google + https://plus.google.com/108042079486614265662/a... Evan Guthrie Law Firm 164 Market Street Suite 362 Charleston SC 29401 843-926-3813

    This answer is for informational purposes only. This answer does not constitute legal advice, create an attorney-client relationship, or constitute attorney advertising. Evan Guthrie is licensed to practice law throughout the state of South Carolina. For further information visit his website at www.ekglaw.com <ekglaw.com>.


  5. GEORGIA ENACTS UNIFORM FRAUDULENT TRANSFER ACT
    _______________
    On April 4, 2002, Georgia Governor Roy Barnes signed House Bill 84, enacting the
    Uniform Fraudulent Transfer Act (the “UFTA”) in Georgia, effective July 1, 2002. With this
    enactment, Georgia joins 40 jurisdictions that have adopted the UFTA and repeals a version of
    the Statute of 13 Elizabeth, which dates originally to 1818.
    Generally, the UFTA protects creditors against a debtor that transfers property or incurs
    liabilities or other obligations in two situations: (1) where the debtor makes the transfer or incurs
    the liability or obligation with the actual intent to hinder, delay, or defraud its creditors, and (2)
    where the debtor, regardless of intent, receives less than reasonably equivalent value for the
    transfer, liability or obligation and is insolvent, is inadequately capitalized, or intends to incur
    debts that are beyond its ability to pay as they come due.
    In addition, the UFTA protects creditors against a debtor that repays debts owed to an
    insider when the debtor is insolvent and the insider has reasonable cause to know of the
    insolvency.
    A successful fraudulent transfer claimant may, among other things, avoid the transfer or
    obligation to the extent necessary to satisfy the creditor’s claim. Such a remedy can include the
    recovery of any fraudulently transferred property or its value.
    The UFTA contains a specific statute of limitations, which prior Georgia law did not. A
    creditor generally must bring a fraudulent transfer claim within four years of the transfer.
    However, a discovery rule also permits certain fraudulent transfer claims to be asserted beyond
    the four-year period if they are brought within one year after the creditor discovers or reasonably
    should have discovered the transfer. Claims to avoid or recover a repayment of debt made to an
    insider must be brought within one year of the repayment.
    Fraudulent transfer issues play important roles in the structuring of many corporate
    transactions, including spin-offs, leveraged buyouts, acquisitions, and internal reorganizations.
    The enactment of the UFTA in Georgia should provide debtors and creditors with greater
    certainty and predictability in analyzing fraudulent transfer issues.

    The materials available at this web site are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an attorney-client relationship between Howard Roitman, Esq. and the user or browser. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.

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