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Difference between revisions of "Basic Principles of Property and Debt in Family Law"
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Basic Principles of Property and Debt in Family Law (view source)
Revision as of 04:23, 20 May 2013
, 04:23, 20 May 2013→The effect of the triggering event
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=====The effect of the triggering event===== | =====The effect of the triggering event===== | ||
From a family law perspective, the most important thing about owning an asset as tenants in common, which is how assets are owned after there's a triggering event, is this idea of two separate interests in an asset. Say the family home is registered in only one spouse's name and that spouse goes bankrupt. | From a family law perspective, the most important thing about owning an asset as tenants in common, which is how assets are owned after there's a triggering event, is this idea of two separate interests in an asset. Say the family home is registered in only one spouse's name and that spouse goes bankrupt. If there's a triggering event and each spouse takes a one-half interest as a tenant in common, the only part of the house that can be taken by the bankrupt's trustee is the bankrupt's one-half interest; the other spouse's interest in that asset will be preserved from the bankrupt's creditors, and it doesn't matter who owns the asset on paper. This can be hugely important. | ||
Family law lawyers describe the effect of a triggering event as "crystallizing" the spouses' interests in the family property because the triggering event makes each spouse the legal owner of one-half of the family assets in a way that is also binding on people outside the relationship, like creditors, trustees in bankruptcy, potential purchasers and so forth. After a triggering event happens, all a creditor can lien or seize to secure or pay a debt is the debtor's half-share of an asset, regardless of whether the debtor was the sole owner or the joint owner of the asset before the triggering event. | Family law lawyers describe the effect of a triggering event as "crystallizing" the spouses' interests in the family property because the triggering event makes each spouse the legal owner of one-half of the family assets in a way that is also binding on people outside the relationship, like creditors, trustees in bankruptcy, potential purchasers and so forth. After a triggering event happens, all a creditor can lien or seize to secure or pay a debt is the debtor's half-share of an asset, regardless of whether the debtor was the sole owner or the joint owner of the asset before the triggering event. | ||
