Legal Question in Wills and Trusts in North Carolina
I am about to put my daughters, and one granddaughter on the deed to my properties so that the adjacent properties will always stay in the family like my husband and I wanted. I have an appointment to do the final paperwork with this week. I trust my family members and they have agreed to upkeep the property and keep it in the family. I am 'gifting' it by adding them onto the deed, and of course this means that there would be considerable capital gains on it if anyone decided differently anywhere down the line. My question is this. With their names on the deed, if something were to happen that got one of them in financial trouble, for instance lets say my granddaughter had to file bankruptcy down the road, and she is one of the four owners, how would that be handled? I would not want it to put an unexpected burden on the others to have to come up with the cost of approximately 1/4 of the current market value of the properties to essentially 'buy' back from the courts her part. Could the court force sale? The properties are collectively worth approximately $250,000 now. Thank you for your rapid response, as I am elderly and worried about this.
1 Answer from Attorneys
You say you have an appointment about this. Is this just with a real estate attorney? You really need to think this through. If your goal is to keep the property in the family, why don't you set up a trust or family LLC or partnership or family trust?
That way, it will be out of the daughter's and granddaughter's names. It will be owned by the trust or the family llc/partnership/trust. You can provide that it will not be sold unless a majority of the owners/beneficiaries (your children and grandchildren and so on) agree.
And yes, if you just stick on the name of the granddaughter, its going to cause problems in the event that she would file for bankruptcy. This will not be an issue if you conveyed to a trust.
The courts will not force a sale, but the other family members might be compelled to buy out the share of your granddaughter and pay her share to a bankruptcy trustee.
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