why you should not add a child to the title to your home real estate

What property goes through probate?

Posted on November 25, 2019 by RGraceLaw

It's not easy to think of your own mortality and what will happen to your loved ones after you're gone. That's why you've taken an interest in things like wills and trusts while you're still here to ensure your loved ones don't have to worry after you've passed.

California has specific probate laws for the distribution of your property and the settling of your debts after your passing. Wills and trusts are great ways to instruct the court and executor of your will to handle your affairs after you've passed.

Property that doesn't require probate

Yet, the law doesn't require everything to go through probate. For instance, property included in a trust circumvents the probate process and transfers directly to your desired heir. This is among the greatest benefits of creating a trust.

When you create your will it's also important to consider various financial accounts. Retirement accounts like a 401K and IRAs transfer to your chosen beneficiaries if you've named them in advance. The same is true for certain bank accounts that allow a specific person to legally claim the money in your account.

The importance of not missing steps

Someone like your surviving spouse or adult child may count on you to follow through on naming beneficiaries on these accounts. By taking the time to name the beneficiaries on applicable bank and retirement accounts, you can ensure they receive their inheritance more quickly than the months it can take for the probate process to run its course.

Your passing will be hard on your surviving friends and family, but they will likely appreciate any measures you can take now to reduce added stress once you are gone.

What is Chapter 13 bankruptcy?

Posted on November 18, 2019 by RGraceLaw

Many Americans find themselves falling behind on their bills and struggling to catch up. People can overspend on their credit cards to hold themselves over in the short term but can make their debt worse because of high interest. Student loans and surprise medical bills are other common sources of financial strain.

If this sounds like you, you're not alone.

You may begin to feel the pressure once the debt collectors start calling or the bank begins threatening foreclosure. While your situation may feel dire, there is a possible solution to change your circumstances if you have income.

A way out

Chapter 13 bankruptcy is a great way for you to stop harassment from creditors and allow you to keep your home while you repay your debt over a three to five-year period. Having a repayment plan in place can provide peace of mind that you're gradually working to resolve your debt without the external pressures of debt collectors bearing down.

To qualify for Chapter 13, you must owe less than $394,725 in things like credit cards and have less $1,184,200 in debts like car loans or mortgages. You must also not have missed a bankruptcy-related court date or skipped your credit counseling in the past six months.

As a general overview, a court will want to see a list of your creditors, the income for you and your spouse, and a list of your monthly expenses. The court will also have your creditors join for a hearing to discuss your debts as you work to set a repayment plan. That court may then move forward with confirming a repayment plan.

You erase debt over time, not overnight
The burdens of debt can feel overwhelming but there is something that you can do about it. Chapter 13 can allow you to keep your home and stop creditor harassment over the next three to five years. There's no shame in acknowledging that you need help and a plan to improve your financial health.

Thinking of Adding Your Adult Child to your the Title of Your Property?

Posted on February 9, 2019 by RGraceLaw

Quit Claim DeedLOS ANGELES (Feb 9.) - WARNING. Adding one of your children to the title to your home could have disasterious consequences.

We want you to fully understand the impact of your decision to add a child to your title of your property and how dangerous it can be for you and for them.

First. If your child should be involved in an accident or is sued and he/she is on title, the equity in the home could be accessed by a creditor. No one knows when an accident or false claim may be lodged against your child that could result in a judgment against him or her. We highly discourage this practice.

Second, if you have more than one child and you wish to exclude other children from your inheritance, these deeds create a great risk that your child will be sued potentially for undue influence and possible elder abuse. But the reality is that it happens over and over again when siblings are excluded. Avoid costly probate litigation and lawsuits. By creating a revocable living trust so you can state your decision to exclude other children from inheriting to avoid any litigation against your child. Give your child the protection he deserves by doing a revocable living trust.

Third, if you have more than one child and it was your wish that this one child share with the other children after you have died, you should not add any of your children to your title. The reality is that no parent likes to think that their child would not honor their parents' wishes to share with siblings. But i see it over and over again. Signing this deed has the effect of excluding all other children and there is nothing in the law that would protect their rights under this deed. A revocable living trust protects all of the children by passing the property into the trust. This would allow you to designate your child to be the trustee and hold the property for the benefit of all of your children if that is your desire.

Fourth, the negative consequences are that even if your child were to honor sharing the benefit of this home with siblings, adding siblings to the title from this point forward is likely to result in a reassessment for tax purposes substantially increasing property taxes that you currently pay rendering them impossible to pay on your current income. A transfer to a trust allows you to change your mind while you are alive to add or exclude any of your children at will without any tax consequences.

Doing nothing can have even worse results. A will by itself or doing nothing will require that your heirs will have to go through a very expensive Probate Proceeding.

Plan your Estate, or the State will Plan it For you. Don't leave behind a nightmare for your loved ones by not taking the time of putting them in the best position possible. Please obtain legal counsel to determine your best options.

Home Prices Flattening in 2015

Posted on January 6, 2015 by RGraceLaw

Car logoLOS ANGELES (Jan 6.) - According to the California Association of Realtors for the 2015 forecast, we will see more home purchases over the next year, but with the prices flattening out at just under 15% below the 2008 peak.Stricter underwriting guidelines and an increase in self-employment have made it harder for most buyers to qualify to purchase a home. This is forcing many buyers to continue to wait to save money for a higher down payment. A higher down down payment puts buyers in a better financial position to make a home purchase. Many people have already been in this waiting period. Also it is now going on four years since many people filed for bankruptcy and they are now ready to qualify for a new purchase even with the bankruptcy on their record.

According to the report "The average for 30-year fixed mortgage interest rates will rise only slightly to 4.5 percent but will still remain at historically low levels."

The California median home price is forecast to increase 5.2 percent to $478,700 in 2015, following a projected 11.8 percent increase in 2014 to $455,000. This is the slowest rate of price appreciation in four years."

"With the U.S. economy expected to grow more robustly than it has in the past five years and housing inventory continuing to improve, California housing sales and prices will see a modest upward trend in 2015," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. "While the Fed will likely end its quantitative easing program by the end of this year, it has had minimal impact on interest rates, which should only inch up slightly and remain low throughout 2015. This should help moderate the decline in housing affordability we saw occur over the past two years."

"Additionally, the state will continue to see a bifurcated market, with the San Francisco Bay Area outperforming other regions, thanks to a more vigorous job market and tighter housing supply."

Financial Stress Lowers Your IQ

Posted on January 6, 2015 by RGraceLaw

Forget Financial Stress

That's right: financial stress Lowers your IQ.

It's not that getting into debt was necessarily stupid. But its the decision of staying in debt needlessly or because you are unable to climb out of the debt that can reduce your ability to think your way out of the mess that has become of your finances.

The stress caused by debt reduces your ability to perform intellectually. You make new, bad decisions because of stress.

The researchers from Harvard tested IQ's in a controlled setting in a shopping mall in New Jersey and in the field in a farming community in India.

Constant worry about paying bills intrudes on your thinking, and diminishes the mental resources you have to apply to all of life's decisions.

In the American lab setting, financially worried subjects lost 13 IQ points. In the field, Indian farmers who got paid just once a year improved their IQ by 25% after the harvest when they had money in their pockets and no immediate money troubles.

Wherever it's found, stress over money makes you less intellectually capable. No matter how you got into debt, being in debt reduces your ability to make good decisions about anything.

Challenging myths

So, the challenge for those stressed by debt is to make good decisions about the alternatives to being in debt. That can be a tall order when you aren't thinking well.

Get good information. There's lots of it here on this site, from highly experienced bankruptcy lawyers.

Good financial counselors can assess whether you have a realistic chance to become debt-free in a reasonable time outside of bankruptcy.

Confront the myths about bankruptcy. Many are just that: myths. Fanciful tales unconnected to reality.

Recognize that lots of the "avoid bankruptcy at all costs" hype comes from people who profit by your continuing to pay on impossible debt, or people who want to sell you an alternative solution.

Get smart

A first step is to recognize that your debts may be impairing your thinking.

Get the facts, enlist some help, and consider whether the alternatives to living in debt are viable for you.

Just hunkering down and paying the minimums, and remaining impaired may be stupid.

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