My wife and I are considering bankrupcty, my wife is listed on her mothers deed to her house is this an asset?

Question

Can the bankrupcty trustee go after her mother's house to recoup losses? My wife is only on the deed with her brother to avoid inheritence taxes if her mom dies. The house is paid for in full and does not have a homestead attached to it.

Answer 1

yes it is an asset, but percentage of ownership could be 1%.  In any case there is no value in the property untill it is liquidated. I doubt your mother-inlaw  is selling the property.

So the property would not be reviewed as an asset in a bankruptcy proceeding.

Answer 2

You know that the estate would have to be several million dollars before there are any inheritance taxes.

If you in-laws are worth that much, why are you filing bankruptcy?

Answer 3

I am not familiar with bankruptcy, but I am with estate planning.  You should ask your attorney if it will be an issue.  If so, change the deed so it is in the brother's name (if you trust him), or find out about your mother-in-law setting up a trust.

Answer 4

Yes.  

The extent of what the trustee can obtain from your mother-in-laws home will be determined by the ownership percentage your wife actually owns.  Depending on the state laws and bankruptcy laws in your state, she may own as much as 1/3 of the property with the other 2/3 owned by your brother-in-law and mother-in-law respectively.  

Bottom line is you really need to consult with a local bankruptcy attorney that also has real estate experience.

Good luck

Answer 5

I believe it can be omited from the bankrupcty...check with your lawyer

Answer 6

Need to talk to a BK lawyer but if wife holds title on the deed then that is an asset of hers