Beneficiary Deed

BrianKathy

New Member
Jurisdiction
Arkansas
Hi -

My mom (dad has passed) has set up her home with a beneficiary deed to me, brother, and sister.

So when mom passes the ownership will transfer to us.

My sister has bad credit, judgments, etc. against her.

Will those judgments attached to the property as a whole or just to her third interest?

Thanks!
 
Potentially dangerous situation.

Judgment Liens on Property in Arkansas | Nolo

Once her name is on the title, the judgment liens attach to the property. Depending on the amounts of the judgments they could spill over on to the other two shares.

Once that happens if you want to limit the damage you will be paying a lawyer many thousands of dollars.

I suggest that your mother fix this while she is alive. One option is to put the home (and other valuable assets) in a trust where the property (and other assets) can be liquidated privately and everybody's inheritance is protected.

Better to pay a lawyer $$ now than $$$$$$$$$$$$$$$$$ later.
 
Just her interest.

The problem is that the property won't be saleable without all three of you agreeing and, if your sister finds out she'll get less or nothing from a sale because her interest is encumbered, she may be reluctant to cooperate. In other words, while only her interest will be encumbered, it could still cause problems for you and your brother.

I suggest you talk with your mother about this. If she shares your concern, then she may want to consult with an attorney about undoing what's already been done (if possible) and possibly creating a trust to hold title to the property. The trust could sell the property after she dies, and the three of you would get your shares of the sale proceeds. Your sister's creditors might still be able to get something from her, but it wouldn't be as likely to impact you and your brother.
 
A friend of mine is going through this exact scenario now with his brother whose finances are also in bad shape. His brother moved into the house, refuses to clean up after himself, and lacks the resources to maintain the house. Garbage is piling up and the house is getting damaged. It will take a partition lawsuit to force the brother out and get the house sold.
 
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