Transfering a deed to a child and other financial questions

[Dryst999]

My mother is a widow, she has never worked a day in her life and has always been a homemaker with my stepdad providing all our income. When my stepfather passed away two years ago he left my mother 300k in life insurance/savings etc. My mother took 120k and bought a forclosed house and paid for it in full. 80k went to funeral/paying off credit cards/taking care of my grandmother's expenses.

Fast foward to today - my mother has 2k in bills a month and only $400 in monthly income coming in (This will be increased to $1200/month in 4 years when she is able to pull my step dads social security), 100k in cash and 120k in medical debt from my stepdads long battle with cancer. The majority of her monthly expenses are from her medical debt, $1200/month would suffice for her with me paying her utilities and a few other expenses. She lives in Mississippi and the homestead law only protects 75k in equity, since her home is valued in the 130k range it does not completely protect her from creditors.

If I have her transfer the deed in my name using a quitclaim deed would this protect her from having the house taken away? Or is there some sort of clause that would let a creditor take the house anyway since i'm a child?

Ideally I would like for the house to be transfered to me as a "taxable gift" and then have her file chapter7 and get rid of the insance amount of medical debt she owes and will never be able to pay. This would allow her to live off the meager income she has and would let me live without worry of her being homeless. Is this possible to do or am I missing something?
I plan on seeing a lawyer soon about this with my mom. I'm only 24 and just graduated college and cannot afford to support her yet (I make 40k/yr which is alot in MS but still nowhere near enough).

Before the flames start let me say that my parents were dumbasses, my mom is in no shape to work and has no skills and is in too bad of health for any sort of labor job. They were horrible with their finances and sadly the burden is now put on me. I do not approve of the situation but we cannot choose who our parents are and given that she has been there for me all my life there is no way I can just leave her to her own mistakes. Just looking for some advice from more experienced people who have delt with related problems.

 

[vi edit]

Seek an attourney.

 

[Dryst999]

Yeh I plan on it, just looking for some outside advice so i'm not oblivious when we meet with one.

 

[Gibson486]

I am not a lawyer, but i do know this....

If you are gonna do the transfer thing....you need to do it well in advance.

 

[wiredspider]

Yea, there is some look back period or something

 

[thepd7]

Before the flames start let me say that my parents were dumbasses, my mom is in no shape to work and has no skills and is in too bad of health for any sort of labor job. They were horrible with their finances and sadly the burden is now put on me. I do not approve of the situation but we cannot choose who our parents are and given that she has been there for me all my life there is no way I can just leave her to her own mistakes. Just looking for some advice from more experienced people who have delt with related problems.

Props for taking care of your Mom, you rock.

 

[spidey07]

Check out bankruptcy laws in your state first. Many times creditor can't go after where you live.

 

[Sho'Nuff]

If I have her transfer the deed in my name using a quitclaim deed would this protect her from having the house taken away? Or is there some sort of clause that would let a creditor take the house anyway since i'm a child?

What you want is for your mom to create a trust for your benefit that identifies the home as the res and includes a valid spendthrift clause. A trusts and estates attorney should be able to do this for you at relatively little cost.

Note that in many states, the trust cannot be specifically created for the purpose of avoiding existing claims by creditors. So, if the creditors holding an interest in your mom's home have not taken action yet, you should get the trust created (at a minimum) before they do so. Even then, the spendthrift clause might not be effective. But as I said, a trusts and estates attorney can help you with this. Don't blindly listen to me (I am an attorney, but I specialize in IP law).

http://en.wikipedia.org/wiki/Spendthrift_trust

 

[Sho'Nuff]

If I have her transfer the deed in my name using a quitclaim deed would this protect her from having the house taken away? Or is there some sort of clause that would let a creditor take the house anyway since i'm a child?

The quitclaim deed would not remove any recorded attachments to the property. E.g., if the home is mortgaged and the mortgage is recorded, merely transferring the land to you will not be effective to remove the mortgage. You would take the land subject to the recorded interest.

 

[Sho'Nuff]

Ideally I would like for the house to be transfered to me as a "taxable gift" and then have her file chapter7 and get rid of the insance amount of medical debt she owes and will never be able to pay. This would allow her to live off the meager income she has and would let me live without worry of her being homeless. Is this possible to do or am I missing something?
I plan on seeing a lawyer soon about this with my mom. I'm only 24 and just graduated college and cannot afford to support her yet (I make 40k/yr which is alot in MS but still nowhere near enough).

I don;t know for certain, but I beleive that a spendthrift trust can achieve the result you want. Again, talk to a trusts and estates attorney. Depending on what attachments are on the land, you might also need to talk to an attorney specializing in commercial paper and real property law.

 

[Dryst999]

What advantages would this spendthrift trust have over quitclaiming the deed over to me? She has no mortage and her property taxes/home insurance is less than $1500/yr which I pay anyway.