Bare Legal Title Loses Again: Real Estate Case

The Bankruptcy Section and Probate Section of the Broward County Bar recently provided a seminar on Bankruptcy and Estate Planning. As Chair of the Bankruptcy Section, we set up a discussion of numerous issues that affect practitioners in these two areas. A new April, 2012 decision is noteworthy.

In Bakst v Cario, 2012 Bankr Lexis 1389, Judge Kimball addressed the issue of a debtor claiming bare legal title on real property originally owned only by her mother. The mother by quit claim deed added the daughter/debtor as joint tenants with right of survivorship. The deed stated that its purpose was estate planning. Judge Kimball rejected arguments of bare legal title as well as of a constructive or resulting trust. The deed provided on its face a transfer of a present interest and contained no trust language. As a result, the debtor could not claim that she really did not have an interest in one-half of the property. She was on the deed and was an owner.

The mother’s home could be sold with the proceeds divided between the chapter 7 trustee and the mother.

For those who attended our seminar, recall the discussion of an enhanced life estate, a so-called “lady-bird” deed, which would likely would have had a different result. These life estates retain full control of the property to the grantor.

I do want to stress that there have been several very recent cases by different bankruptcy judges in the Southern District of Florida where debtors have lost on the claim of bare legal title, so bankruptcy attorneys counsel must be careful.



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