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Signing a Trust Deed after the property was already transferred

Regular Contributor

Signing a Trust Deed after the property was already transferred

So here is the scenario looking for advice: My DW agreed to buy her Mothers home in 2007 she moved out and we have lived there since. the agreement was: purchase price $500,000 which was market value then. She did not want her to get a loan and agreed to terms of $1000 per month until it is paid off at 0 interest. title to the house stayed in her mother's trust. About a year ago my wife and her mother worked out that she would transfer the title to my wife which they did with a warranty deed and it was recorded at the county. Last month her mother decided to move into a nursing home and give over her finances to her other daughter my wife's sister who is now asking my wife to sign a trust deed on the house. 


Can the sister force the issue and any reason we should or shouldn't sign it. The current amount still owed is about $240,000. When her mother passes away my wife should stand to get at least that amount of inheritance if not more.  The sister is playing the amount of inheritance down and keeping her in the dark about her mother's assets etc at this point though. 


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Message 1 of 4
Community Leader
Mega Contributor

Re: Signing a Trust Deed after the property was already transferred

I am not an attorney, so don't interpret my comments as sound legal advice.


The warranty deed means that your MIL guaranteed that she held title to the house free of any encumberances when she signed the house over.


It sounds like the agreement where your wife pays $1000/month to her mother's trust is still in effect, so what your sister in law is asking is for your wife to agree that a lien be placed against the property, ostensibly so that if she doesn't continue with the $1000/month payments the designated lienholder (in this case, the trust?) can seize the title. 


I would not even contemplate signing such a document without first having had a long conversation with a very good attorney well-versed in real estate law including how it pertains to different trust types in your state.


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Message 2 of 4
Regular Contributor

Re: Signing a Trust Deed after the property was already transferred

I have a similar circumstance, only my mother is not bound for nursing home yet.  The way ours is structured, is that upon my mothers death, the amount remaining that is owed, comes out of my portion of the my share of the inheritance would be reduced by the amount that I owe my mothers estate.  We have a side agreement outlining this, but, nothing is signed over to the trust and the house deed remains in my wife and I's name.


If the deed is in your wife's name, then she cannot force your wife to change the agreement as the house belongs to your wife, and your mother and sister in law have no claims to the house unless there is a side agreement stating differently

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Message 3 of 4
Regular Contributor

Re: Signing a Trust Deed after the property was already transferred

I am very sorry to hear about your situation regarding your mother's estate.  Disclaimer: Please consult a lawyer and a tax attorney (which I am not) in order to make an informed decision on your own accounting. From the scenario, your sister wants the house to use to pay for the nursing home that your mother is placed in currently as she is incapable of managing the estate.  The house you now have is not in your mother estate or trust.  You would not add the house to your mother's trust because she, your mother, in this case, is simply you and your husband's mortgage loan processor for the payments as the deed and title belong to the two of you already.  It would also make obsolete the contract to pay into the estate further upon her death as she has already paid for the house.  The house would therefore, remain yours and your husband's free and clear upon your mother's passing. There is no creditor which is due the asset and such things are hidden and protected as trust are not published for creditors to make claims thereby, avoiding the probate creditor claim process.  


Simply put, protect your assets and add it to you and your husband's individual wills.  The assets in the trust are protected from the nursing home unless your sister who has been given financial management assignment miss manages them and allows the nursing home to infringe upon her.  This is counterproductive to use your mother's assets to pay for a nursing home as she was placing the items in the trust to preserve them for you and your sister not for them to be mismanaged as she changes residences.  Other items like long-term care insurance would cover such things or any HSA account.  Look for insurance coverage or perhaps consider home health care hospice should the nursing home prove to be too expensive.  And an attorney can actually assist you and your husband with answering questions such as those with the dignity and importance you and your family deserve.  Good intentions can get lost quickly when it comes to managing the affairs of others especially when there is money involved and I do not wish to sound unsupportive nor cause an unnecessary rift between family members.  

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