I have an opportunity where a gentleman wants me to take over his house. My plan is to hold it, rent it and sell it down the road. Very little equity but it has a low payment. My question is if I put it in my name, can the state of arizona place a lien on my property if I owe child support in michigan?
All your assets are eligible for seizure or garnishments and US Constitution requires AZ to honor the judgment from MI and any other state. Don’t even think of playing games with entities. If the judge finds out, you are all done.
If you can afford to buy a house, why don’t you pay your back child support. that shuld be your first priority.
I am not an attorney, and my knowledge of judgements is limited. Here is my take.
The state won’t put a lien on your property but a judgement creditor can. Let’s say your ex gets a judgement against you in MI for back child support and then discovers that you have assets in AZ, it would not be any trouble at all to “domesticate” that judgement in AZ. Once the judgement has been “transferred” to AZ, it is a simple process to file for seizure or attachment which will make the judgement a lien on your property. Depending upon the scope of the seizure order, the judgement could be used to garnish your wages.
Just my understanding of the system, however imperfect that may be. Consult your attorney for specific details.
I don’t know about a lien, but in TX income from all sources, including real estate, is taken to account when calculating your support obligations. So, they can certainly include it in the amount and garnish your W-2 wages accordingly.
Buy the property and add your child to the title. Catch up and continue to pay your child support. If for any reason you can’t meet your obligation to support your child, you can sell the property in a better market and give the profits to your child to make up for your past deliquencies.
Make sure you title the property as joint tennats with right of survivorship, that way if anything were to happen to you, the property would go to your child.
If you put your child on title to your property, your child becomes a co-oiwner. You can’t sell the property unless your child is a party to the sales contract. At settlement your child must also sign all the necessary paperwork including the deed that transfers title. Capital gains taxes will also be due on your child’s share of the sale profit. While on title, your child will also be entitled to a share of any income the property might generate.
Adding children to the title also opens the door to other potential headaches. What if you want to sell and your child does not? What if your child wants to sell and you don’t? What if your child is sued and the judgement creditors force your child into bankruptcy. The bankruptcy court will force liquidation of the childs capital assets and that property may be sold at a loss.
A better solution would be to put the property into a revocable trust with yourself as the trustee and your child as a secondary beneficiary. Upon your death your child inherits at stepped up basis. No capital gains tax if your child sells upon your death.
what if you die? Now your ex-wife is trustee of the child’s portion of the property while your portion is now owned by whoever your heir is.
this is also an issue when kids inherit part of a residence under intestate laws. sometimes the new wife only owns 3/4 of the property because 1/2 of your 1/2 went to your kids by state law, and is now controlled by the ex. Wife #2 can’t even get the roof replaced without the ex’s approval. Not good.
Putting your kids on title is not smart (IMO).
and GET A WILL
Normally, I would agree. A will or living trust is better. However, the OP’s question is about hiding equity in an investment property from a judge trying to collect child support that he should have been paying. In this case, he should either pay up the child support or give the child some equity in the property if he can’t come up with $$. The first obligation here is to fulfill child support obligations, not asset protection for investment property.
The child is a minor. Adding the child’s name to the title does not prevent the custodial parent from petitioning the court for a partition sale to cash in whatever equity there is for the child’s welfare and support.