My ex will be refinancing the marital home and buying me out of my ownership of the home. I will be receiving a partial pay- out up front, with the balance to be paid to me upon sale of the house in 4 years. Should this be set up as a second trust so that I hold a lien on the house? Should there be interest involved?
2007-09-05 04:35:00 · 5 answers · asked by Robin S 1 in Business & Finance ➔ Renting & Real Estate
I would look for an attorney that does both divorce and real estate issues. This is important because divorce laws vary from state-to-state.
Being a non-lawyer, my first reaction would that you wouldn't want a trust. I'm thinkg more that it should be set up as a second trust deed (like a second mortgage). That way you have a solid claim to the house and your rights won't be supplanted buy following m,echanics or tax liens, refinances and equity loans.
the question you have to ask is about the 4-year wait. What if she stops making payments and gets foreclosed on, or runs into financial trouble and declares bankruptcy? You'd likely never get that [payment in 4 years.
As far as interest, that is between the two of you to decide. Again, my initial reaction is to set it up so it is to the ex-spouse's best interest to pay it off earlier. For instance, have an interest rate, or maybe even an early payoff bonus. For instance if the payoff is $20,000, For example, make it so she can pay you off for $17,500 if she does it within 12 months. Then it is $20,000 for months 12-24, then after 24 months the $20,000 earns interest (7% if you are being generous, or 8%, 10%, whatever you agree to). In a deal like this, getting some money is generally better then waiting years for it.
But again, make sure you are working with an attorney who knows divorce and real estate law.
2007-09-05 05:26:52 · answer #1 · answered by rlloydevans 4 · 0⤊ 0⤋
Is the balance of the buy out for a specific dollar amount, or is it a % of the proceeds. It would be difficult to create a 2nd deed of trust for an unstated amount, but not for a definite amount. A deed of trust is a security instrument for a note. The note would state exactly what you are entitled to and on what terms. The real value of a deferred payment is going to decline over time due to inflation. There is also the opportunity loss you incur for not having the use of the money. Therefore you might want to have an interest provision or add on some additional funds to the payment to account for these factors. Be careful of the tax consequences. The net resutls could be different depending on how it is structured. You should employ qualified financial and legal advisers. The two of you can jointly employ a divorce mediator, usually an attorney, to review your plan and point out any flaws. It is money well spent.
2007-09-05 05:15:14 · answer #2 · answered by artwhiterealtor 3 · 0⤊ 0⤋
Definately on the lien on the house. Set the price/value of the property now and then for the time that the spouse will be in the home they will get the extra because they will be paying for it during that time. Interest is not something that will probably happen. (past experience) You could try but, don't really expect it. Judges are strange that way. It is business but... Good luck with your new stage in life!
2007-09-05 05:30:04 · answer #3 · answered by helprhome 5 · 0⤊ 0⤋
You definitely want to see an attorney but make sure you have some kind of lein filed on the house for the balance. I don't know that you neeed a second trust. It might just be much simplier.
2007-09-05 04:48:44 · answer #4 · answered by bdancer222 7 · 0⤊ 0⤋
Robin you need an attorney.
2007-09-05 04:43:00 · answer #5 · answered by Anonymous · 0⤊ 0⤋