Sometimes, we can be too clever for our own financial well-being. Most people want to avoid taxation as much as possible while maximizing their availability of their assets: this is human nature. However, this thinking can (and has!) put thousands of Americans in legal hot water or less-than-desirable situations.

Take the case of Marcie Shield, who is a property owner and has one son. Marcie also currently owns a house that she does not have access to, all because of a dire financial and legal mistake that Marcie made during the last recession.

The Shields in 2009

2009 was not a good year for Marcie in multiple ways. Not only was the country in the grips of an economic recession, but her marriage was on the rocks. The good news was that since Marcie had purchased her home independently prior to marriage, it was not part of marital property. However, Marcie was concerned that she would lose her house to foreclosure due to the financial impositions the divorce was having on her. To avoid foreclosure, Marcie decided to put her adult son on the deed to the home.

The idea was that this would be a temporary solution, since Marcie was interested in selling the house after the divorce. However, her son, Eric, had terrible credit due to a spate of bad financial decision making and the effects of the recession. Marcie decided that she and Eric would live together in the house until the financial forecast looked better.

The Shields in 2019

As the years passed, Marcie then decided that she wanted to enjoy her retirement and get around to selling the property. Thus, she negotiated a compromise with Eric. Marcie would use some of her funds to purchase an RV and travel for a year, and Eric would rent the house from Marcie during this time. When Marcie returned from her cross-country trip, she and Eric would sell the home.

The problem is that when Marcie returned, Eric decided that he did not want to sell the house. Since Eric was fully a 50% owner of the property, there was no immediate legal recourse for Marcie to take against this.

Lessons Learned from Marcie

Marcie is currently living in her RV due to the bad blood that this situation created between herself and Eric. Currently, there is very little that Marcie can do to force Eric out of the house. Her only option is to attempt to file a “partition lawsuit” to remove Eric's name from the deed. Even if this were successful, Marcie would need to buy out Eric's half of the house since he is a legal owner. Her only other option is to move back into the house with Eric: just like half of it belongs to him, half of it belongs to her.

However, this is not a situation that anybody wants to be in for retirement. A good general rule is to not make decisions in the aftermath of a death or a divorce as often our emotions cloud our better thinking processes. Protect yourself and your retirement. Contact us today at AmeriEstate to get the advice you need to make the right decisions for your future.