Can a quit claim deed protect an asset from a co-owner creditors?

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

Can a quit claim deed protect an asset from a co-owner creditors?

I needed my daughter’s income to buy a house 4 years ago, so her name is on the title and mortgage. Recently her driver’s license was suspended but she continues to drive. If I do a quick claim deed and take her name off the title, can my house be taken away in a lawsuit if she has a major auto accident while driving on a suspended license?

Asked on September 15, 2011 under Bankruptcy Law, California


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

If your daughter is driving an automobile on a suspended license in violation of any court order or California Department of Motor Vehicle decision and she has no automobile insurance in place as to herself personally or her vehicle, she runs the risk that if she gets in an automobile accident which is her fault that there will be a lawsuit resulting from it and a judgment against her.

If that happens, then the judgment credior can record an abstract of judgment on all real property that she owns creating a lien for payment.

If your daughter has no legal actions pending aganst her, she can sign a quit claim of the property that she has title to that you live in to yourself where the property would not be an asset subject to an abstract of judgment and a resulting lien.

I caution you on doing this in that the quit claim that you write about may trigger a gift tax obligation owed by your daughter depending upon the amount iof equity in the home presently and trigger the due on sales clause of the mortgage (trust deed) securing the loan for the property's purchase.

I suggest that you consult with a real estate attorney about your situation.

Good luck.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption