Expert: Dick Dennis - 4/25/2006

Question
My friend and I want to buy a house together.  I have 3 more payments on my chapter 13 bankruptcy before being discharged.  Because of this, the mortgage lender has advised that my friend buy the house with her credit, and I be put on a deed of trust until we can refinance in both of our names in a few years when I can qualify for a better interest rate.  I own my own home now, and so does she, and we are planning on selling both houses to buy the new one.  But if the new house is in her name, I want to know if a deed of trust protects me (in Texas) from her children and/or parents claiming rights to the property in the event of her death?  We also plan on changing our wills and life insurance, but I am still worried.  Can you offer any advice? Thanks…

Answer
I really shudder when someone asks me a question similar to yours. The way to handle your situation should be done by a REAL ESTATE attorney. You both must sit down and explain to the attorney just how you want to hold title. Tell the attorney what you want to happen if one of you dies.

NEVER, never just take title like the way you indicate. I would recommend using a REVOCABLE living trust. This way, you are both trustees and upon the death of one, the trust specifically spells out what is to happen. When you are to be put on the loan, it should not affect how you own the property. That's why you should have a good real estate attorney/trust attorney put it together for you.

I do wish you well.

Dick Dennis
dixiedee13@aol.com