If your son is going to make the payments anyway, I would suggest he use a debt snowball approach instead of a home equity loan from your house. Debt snowball is to make minimum payments on multiple accounts and make an extra payment on the smallest balance.
Once the smallest balance is paid off, use that same payment plus the minimum payment on that card to pay off the next smallest balance. As time goes on, the amount of payments going to the debt become larger and the balances are paid off quicker.
You may want to do an internet search for the process by searching, "debt snowball. Having had children myself, it is always better to let them solve their financial problems with their own resources even if there may be higher costs in doing so. By learning to handle his problems without parental assistance, he will be less likely to go into debt again in the future. It's wonderful that you want to help your son and, since you're in business together, it's obvious there's a great deal of trust. But I generally caution against this strategy.
Though placing your son on the deed would not trigger income tax implications, there's 1 gift tax reporting and maybe gift tax to pay and 2 exposure of your home to your son's liabilities. If you place your son on the deed, you'll have made a de facto gift of a portion of the house to him. Then when his debts have been paid and you "take him off" the deed, he will have made a de facto gift of his portion of the house back to you. Same thing for your son when you "take him off" the deed. Perhaps more important is the exposure of your home to your son's liabilities.
Placing your son on the deed makes him an owner of the home. Creditors can attack any assets your son owns which would now include your home. And it's not just outstanding bills Guess what asset they'll probably go after? So it's wonderful that you want to do this, but for most folks in most situations it wouldn't be a wise move.
Treat this as general information rather than personalized tax or legal advice. I hope it helps and wish you the best! As others have stated this puts your home at risk. Trust is one thing, putting your house at risk is another. You and he do not know what life may bring. If he has unsecured debt now and gets in deep trouble he can file bankruptcy. If it is secured on your house, then you will have to make the payments or lose your house.
Can you afford to make the payments if he defaults? Another option for him is to visit a credit counselor nfcc. This is a way to lower interest and help him pay off his debt more quickly. In most parts of the United States, deeds must be submitted to the recorder of deeds , who acts as a cadastre, to be registered.
An unrecorded deed may be valid proof of ownership between the parties, but may have no effect upon third-party claims until disclosed or recorded. A local statute may prescribe a period beyond which unrecorded deeds become void as to third parties, at least as to intervening acts. Ownership transfer may also be crafted within deeds to pass by demise, as where a property is held in concurrent estate such as "joint tenants with right of survivorship" JTWROS or "tenants by the entirety".
In each case, the title to the property immediately and automatically vests in the named survivor s upon the death of the other tenant s. In most states joint tenancy with the right of survivorship requires all owners to have equal interests in the property, meaning upon sale or partition of the property, all owners would receive an equal distribution of the proceeds.
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Joint ownership may also be by tenants in common TIC. In some states, joint ownership is presumed to be as tenants in common unless the parties are married and the deed so states or the deed sets for joint tenants with right of survivorship. Upon death, the decedent's share passes to his or her estate.
A life estate is the right to use, possess and enjoy the property for a period of time measured by the natural life of a person or persons. When all life tenants are dead, the remainderman holds full title. When deeds are taken as joint tenants with rights of survivorship JTWROS or joint tenants in common TIC , any co-owner can file a petition for partition to dissolve the tenancy relationship.
JTWROS deed holders always take the property in equal shares; therefore, if the partnership is dissolved through partition, the proceeds must be equally distributed between all of the co-owners without regard to how much each co-owner contributed to the purchase price of the property. No credits would be allowed for any excess contributions to the purchase price. On the other hand, TIC deed holders may be granted at partition a credit for unequal contributions to purchase price.
During either partition, credits may be awarded to any co-owner who may have contributed in excess of his share to the property expenses after taking deed to the property. Credits may be allowed for utilities and maintenance; however, credits for improvements may not be allowed unless the improvements actually added substantial value to the property. In the United States , a pardon of the President was once considered to be a deed and thus needed to be accepted by the recipient.
This made it impossible to grant a pardon posthumously. However, in the case of Henry Ossian Flipper , this view was altered when President Bill Clinton pardoned him in The United Kingdom, England and Wales operate a 'property register'. Title deeds are documents showing ownership, as well as rights, obligations, or mortgages on the property.
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Since around , compulsory registration has been required for all properties mortgaged or transferred. The details of rights, obligations, and covenants referred to in deeds will be transferred to the register, a contract describing the property ownership. Examples of an agreement are agreement to sale, loan agreement etc.
At common law, ownership was proven via an unbroken chain of title deeds.
Deed - Wikipedia
The Torrens title system is an alternative way of proving ownership. First introduced in South Australia in by Sir Robert Torrens and adopted later by the other Australian states and other countries, ownership under Torrens title is proven by possession of a certificate of title and the corresponding entry in the property register. This system removes risks associated with unregistered deeds and fraudulent or otherwise incorrect transactions. It is much easier and cheaper to administer, lowering transaction costs.
Some Australian properties are still conveyed using a chain of title deeds — usually properties that have been owned by the same family since the nineteenth century — and these are often referred to as 'Old System' deeds. A deed that is recorded, but is not connected to the chain of title of the property, is called a wild deed. A wild deed does not provide constructive notice to later purchasers of the property, because subsequent bona fide purchasers cannot reasonably be expected to locate the deed while investigating the chain of title to the property.
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Haupt has stated that. Atwood sells his land to Burns, but Burns does not record his deed. Burns later sells the land to Cooper, and Cooper records her deed. But because the previous deed the deed from Atwood to Burns was not recorded, Cooper's deed is outside the chain of title. In a title search, someone looking up Atwood's name in the grantor index would find no indication that Atwood conveyed the property, and nothing would lead the searcher to Cooper's deed. The general rule is that a subsequent purchaser is not held to have constructive notice of a wild deed.
In the example, Cooper's title is unprotected against subsequent good faith purchasers.
A Deed So Accursed
Suppose Atwood were to fraudulently sell the same property to another person, Dunn. A court would rule that Dunn has good title to the property, not Cooper. A wild deed has been described as a deed "executed by a stranger to the record title hung out in the air like Mahomet's coffin. There is a legend that the Prophet Muhammad's coffin was suspended without visible supports, from the ceiling of his tomb, just as a wild deed just hangs there, not touching the chain of title.
From Wikipedia, the free encyclopedia. For the reality television series, see The Deed. For the British cargo ship, see SS Deed. For the English cricketer with the surname Deed, see Jack Deed. Bargain and sale deed. Archived from the original on 3 May Retrieved 21 August Archived from the original on 18 December Retrieved 1 January Little, Brown and Co.
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