Can I build a home on family land where my name is not on title

net42kMay 12, 2014

I plan to pay cash for a piece of land and have only my sister's name on the deed/title. In this state, deed/title is public record and because I don't want others to know I own or live there, hence the reason I want to put it in her name. Currently she lives in another state and don't plan to be here during the construction. When there is something requiring her to sign during the construction it's not convenient to mail the paper back and forth for signature. I want to be able to handle everything without needing her signature during the construction. Is durable power of attorney or is there something else that can solve this issue? Or can I build a house without any of these because it's family land? Also after the land I have about 60% cash left for the construction. Instead of a construction loan, I'll get the other 40% from a home equity loan of the current home I own free and clear.

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You need to consult an attorney in the state where you are planning to build.

But, I will say that no matter who it is, I would NEVER build a house on land that is not in my own name or have the house in another person's name.

Family relations can sometimes get strained for unforeseen circumstances and it would be exceptionally difficult to deal with that. Even if something didn't happen to strain family relations, should your sister ever find herself in the unfortunate situation where she was sued, that would appear to be her property and therefore could possibly be in jeopardy. If she's married and, lord forbid, wind up in a divorce, again, that could be looked at as her marital property, and subject to proceedings in a divorce. Or if she dies, the property and house could go over to her spouse/children, who may or may not be as "stand-up" as you would hope.

Also, have the two of you considered and discussed the tax ramifications? Not just property tax, but federal taxes, etc.

No way, no how...not a chance in the world that I would ever do anything like that - not even with my own mom (one of the few people that I would hand over my life to and know that she would treat it as well, if not better than I would my own), let alone a sibling unless I was very comfortable with the idea that I could lose the house and all the contents without warning.

I'm not certain why you are so concerned with it being public record, but assume you have good reasons for not wanting it out there. Still, I'm certain what you are proposing doing is an unwise decision.

    Bookmark   May 12, 2014 at 10:58AM
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Yeah, agree with the above. This is a terrible idea fraught with legal issues, and risk.

I'm sure there are better ways to do this, and you should talk to an attorney and ask.

    Bookmark   May 12, 2014 at 11:03AM
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You need a lawyer, preferably one that specializes in asset protection.

    Bookmark   May 12, 2014 at 11:05AM
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Couldn't you set up a legal entity or trust and have the land/house in the name of the legal entity or trust. Celebrities do this all the time. Corporations do this too, for example when Disney buys out properties to create a park.

Leaving things in someone else's name is a bad idea. Talk to a lawyer.

    Bookmark   May 12, 2014 at 11:37AM
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I know for many families they don't trust one another and even don't lend money to family member. Mine is opposite and I'm not concerned she or her spouse/kid takes it over because she's never married and has no kids. But I do worry if something happened and she was sued. Thanks for bringing this up. To answer your question, I'd take care all tax issues.

I wasn't aware of legal entity or trust but will do some research about this.

    Bookmark   May 12, 2014 at 12:15PM
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I can speak to this: My family owns a large piece of land, which was most recently in the name of an elderly family member. It was common knowledge that the land would pass to the younger members of the familiy when she died.

One brother wanted to build a house THEN rather than waiting until the land was officially HIS. We looked into how he could do this . . . and we found that if he built THEN, he'd have to pay full value for something that was going to be his eventually through a will. The relative wasn't trying to make money from him, and he didn't want to separate his portion from the whole family land.

The accountant gave some good advice: He suggested that that brother buy a small, small amount of land -- maybe 1/4 - 1/5 an acre from the relative -- enough that it wouldn't be very expensive. In reality, he'd still have the use of the entire piece of land -- his kids could still play in the woods, he could use the extended land for parking, and he wouldn't have a neighbor on top of him . . . but he'd only own /pay higher taxes on that tiny bit upon which his house stood.

In contrast, I have a friend -- and only child who knew she'd inherit a large piece of property well-placed for commercial purposes. She and her husband foolishly placed TWO businesses on the property, which was still owned by her parents. (A squirt-em-off car wash and a self-storage place)

When her parents died and she inherited the land, she ended up paying $$$$ because the land was "improved" . . . no one cared that it was improved with her money! Because that's not my own story, I may not be telling it exactly right, but the moral is clear.

This post was edited by MrsPete on Mon, May 12, 14 at 18:30

    Bookmark   May 12, 2014 at 2:10PM
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My only reason is privacy. Thanks chispa, I found an article addressing this issue.
"How to buy land like a movie star
Your biggest investment doesn't have to be public knowledge. A land trust can preserve your privacy.
You wouldn't want everyone in the world to know the balance of your checking account or stock portfolio. Yet information on what may be your largest asset, your house, is readily available to anyone wanting to poke around in your affairs."

    Bookmark   May 12, 2014 at 2:34PM
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Annie Deighnaugh

I agree with andreak100....

Just watch Judge Judy sometime to see how far south family relations can go and then what a mess it is for courts to try to reconcile, let alone all the hurt and heartache that goes with it.

If you're that concerned about your privacy, then I'd suggest you stop using the internet and go back to oral and in person communication only. (Tho even that can be compromised.) And be sure to wear a hat at all times, really low, as cameras are everywhere. Privacy in this electronic age is just an illusion.

    Bookmark   May 12, 2014 at 5:28PM
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I would set up a trust where I am the beneficiary, and buy in the name of the trust.

    Bookmark   May 12, 2014 at 5:32PM
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OP - I'm sorry I can't help other than echoing putting the land under a trust, but I think it's reasonable to want to maintain privacy as a home owner. It can be comforting whether you are a victim of some sort of threat or violence, have a law enforcement/judge/attorney family where it isn't ideal for the people you put behind bars to know where you live, etc.

    Bookmark   May 12, 2014 at 5:50PM
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Suppose that your sister has a serious traffic accident that is considered to be her fault. The house is an asset that those suing her could take to settle a claim.
Good attorney, now!

    Bookmark   May 12, 2014 at 5:55PM
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net4u2k - I used to be a real estate paralegal...I've seen LOADS of issues. Most of the issues dealt with people who swore that "it would never be a problem because my family isn't like that". It can, and does happen. More often than the average person realizes.

I would highly suggest not putting yourself or your sibling in a position where it might possibly adversely affect your relationship somewhere years down the line. If she's an important person to you, value that and keep from getting into a position where that could possibly at some point get tainted. Your relationship could be rock solid right now...but think on this for a moment - many people (I'd venture the vast majority) who get married do NOT believe that their marriage will end in divorce. Hard numbers and public records show that not to be the case...unfortunately, things can and do go sour with relationships of any sort for any number of reasons that we can't foresee happening.

There are ways around your issue. But, you need to hire an attorney (most likely one that works extensively with trusts), not just ask for free advice on a public forum.

    Bookmark   May 12, 2014 at 5:57PM
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In a word, no. If you need to get a loan on the home or any of its contents at any time, it must be in your name. Most contractors, landscapers,etc won't make improvements to the land because the land owner didn't order the improvements and most likely a lean would hold up of you stiffed them. Most utility companies won't touch property without express consent of the land owner. Have your lawyer create a trust. It can be called "Nunya F-ing Business" if you like.

    Bookmark   May 12, 2014 at 7:23PM
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This is what lawyers do. They can hide anything for a price. If you do it yourself even I could find out that you owned the property.

    Bookmark   May 12, 2014 at 7:30PM
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Just have to add, unexpected death, unexpected expenses, unexpected relationship....Too many risks --your home would be vulnerable if your sister legally owned it.

    Bookmark   May 12, 2014 at 7:34PM
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Whoever you talk with make sure they know tax laws, trusts, estate planning etc. My family has farm ground that we will inherit soon. Lots of issues to work out. AndreaK100 gave you some good advice.

    Bookmark   May 12, 2014 at 8:17PM
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This is America. You can do a lot of things that other people would consider stupid and risky if you're willing to suffer the potential consequences of it being stupid and risky. Like loosing everything.

    Bookmark   May 13, 2014 at 2:10PM
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It sounds like trust is the way to go. There are different types of trusts and I need to do some more readings. If I didn't post it here I would know nothing about trust and even didn't know where to start. I don't want to be uninformed when I see a professional where they would try to sell me something else.

    Bookmark   May 13, 2014 at 4:13PM
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When you talk to someone, choose someone who isn't selling you anything (ie, not a financial planner who also sells life insurance, or...)

You want to talk with professionals--an attorney who mostly does trusts/wills/estates AND a good, well-versed CPA or tax-attorney who can address any tax ramifications. Start and end with the attorney, meet with the CPA in the middle once you have a preliminary plan from the attorney, to make sure there isn't anything that will ding you with taxes, then back to attorney for any revisions and the final plan.

Hope that helps. What area of the country? Make sure you pick someone familiar with YOUR STATE.

    Bookmark   May 13, 2014 at 7:32PM
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