Real Estate Titles and Minor Ownership

Home » Resources » How To Turn One Home Into Two Homes With An HPR
By Rochford Law Posted on August 9, 2016 at 2:00 AM
 

Seeking protection, security, and stability for our loved ones is paramount. While it’s hard to think in terms of “worst case scenarios,” in some instances, provisions pertaining to real estate may be a great way to ensure peace of mind and pave the path for our loved ones. However, when it comes to adding minors to property titles, it’s important to understand what, exactly, that means and what the future repercussions may be. Working with a real estate attorney to better understand the implications of minor real estate ownership, including void and voidable contracts is highly advisable.

Age of Majority

In Tennessee, an individual is considered to be of consenting age when that individual reaches the age of majority, which “means eighteen (18) years of age or older.” The reason for this statute is to protect the individual rights and interests of the minor since children may not have the skillset or financial resources to protect themselves. While a minor may receive and hold title to real estate in Tennessee, there are complications involving minor ownership of real estate property when it comes to transferring ownership prior to the age of majority.

The Difference between Void Contract and Voidable Contracts

Because of this factor, real estate contracts involving a minor may be deemed void or voidable, depending on the situation.

If a contract involving a minor is deemed void, the contract cannot be enforced because it is considered to be illegal. The focus is to protect the minor’s rights and interests. Considering that the minor is unable to make sound decisions, the contract will be deemed void.

In other circumstances, where the minor’s rights and interests are not threatened, a contract may be deemed voidable. However, once the minor reaches the age of majority, this once voidable contract can later become valid.

Solutions and Peace of Mind

There are various real estate services that can address and prevent problematic situations involving the inclusion of a minor on a title. Each real estate service can be tailored to fit the needs of the family members involved, as each service has its advantages and disadvantages.  A few solutions can include any of the following:

  • Trust: Spells out how the real estate property is to be distributed and managed.
  • Custodianship: Designates an adult to manage the real estate property until the minor is of age.
  • Guardianship: Designates an adult to help manage the real estate property but with limited authorizations.

Consult a Real Estate Attorney

When it comes to the planning process, it can feel overwhelming and time consuming. To better understand your legal options regarding real estate and to protect your loved one and your estate, consult with an attorney that specializes in real estate law.  A real estate attorney can help you develop a plan to protect your future and help you plan for a better tomorrow.

For more information, contact the law offices of Rochford Law & Real Estate Titles at 615.269.7676.

Topics: Real Estate Law, Real Estate Title, Residential Real Estate Law