how can I protect a rental property that I own durring a divorce

[divorce]

Ok Guys,

I've possibly got a brain twister for ya and need some ideas on what I can do to help myself and my brother out.

Most of my property is owned by me alone. My brother is presently in a divorce. We own a house together, equil shares, between him, my mom and I. He did not pre-plan a potential divorce in any way. During his marriage, my mom's company gave a loan of about 45 to me and him to buy the house, rehab it and set it up in an LLC.

Now, in his divorce, the soon to be X is going after our rental property. About a week ago we got a business line of credit on the house for 50K of which only a couple thousand is actually on the line which was closing costs. We never recorded anything at the courthouse for that 45K that was loaned by my mom's other corporation.

My brother is now having to give her lawyer a deed and other information so the judge can determine the equity in the property. A recent valuation of the property shows it to be worth 77K.

Anyone have any ideas on how we can protect this asset? Technically it has a loan against it of 45K that was unrecorded, and a business line of credit loan on it for 50K which only has a couple thousand on it spent.

And will the judge think there is some funny stuff going on if we went down and recorded another lien on it right now for that one that we never recorded. We would be able to prove that the money was transferred from her company to this houses llc.

[BLL]

She gets half his interest. That unrecorded loan is going to look shady unless you can show very solid proof of an actual transfer of money and some kind of notarized promissory note.

If the property is owned by an LLC, it belongs to the LLC, not the members and is not part of the marital estate. Your brother's LLC interest is and she is entitled to half. If you set the LLC up properly as opposed to using an online service or free form you found, there is language that strips your brother of his rights in this kind of situation. He won't be able to take any money out of the LLC, but his ex won't get any either. You just need to wait her out. Otherwise, he can kiss half of his good bye.

[furnishedowner]

Your brother needs advice from a law firm that has both divorce and real estate attorneys.  Don't try to figure this out yourselves.  Your mom's company should be able to provide documentation for the $45,000 loan.

Good luck.

Furnishedowner

[tatertot]

He owns a third, she gets half of that, so she gets 1/6.

A sixth of $77,000 minus the $45,000 loan (if you can prove it and you aren't trying to commit fraud) is only 5.3K. It would be easier and cheaper just to pay her the cash and have her sign off on the house. Lawyers to fight about it will cost you much more than that.

The unused line of credit doesn't factor in, other than that this is a very bad time to use any of that.

[mcwagner]

just curious if this was separate property before marriage and if you live in a community property state.