 Dear
Steve,
When is an interspousal deed used?
-- Yadi
 Dear Yadi,
You are referring to an interspousal transfer deed, also called an interspousal transfer grant deed. The interspousal
transfer deed is used when a real estate transaction is between spouses. It is commonly used in divorce cases to
transfer title from both spouses to one spouse alone, or is sometimes used when one spouse suffers credit problems
that adversely impact the other spouse.
An interspousal transfer deed is
similar to a quitclaim deed. However, a quitclaim
deed does not guarantee that the property is free
from debt. For that matter, the interspousal deed
does not relieve the mortgage obligation of the
other party either in the eyes of many lenders.
Hypothetically, if you will be divorcing and transferring the title to your spouse, you may still
be responsible for the mortgage if your spouse fails to make payments under either "deed" scenario. That's why you
would probably need your spouse to refinance under his/her name in such a situation.
There are many gray areas surrounding these deeds. Also, joint property laws vary from state to
state. Some, such as California, have more nuances than others. You and your spouse will each need to sign the
interspousal deed in the presence of a notary public. First, you'll want to make sure the legal description of
the property is dead-on accurate so it can be recorded correctly.
As you can see, this could evolve into a sticky legal matter if not done according to the letter
of the law, so it would be best to discuss the matter with your lender and your attorney. And if you are divorcing,
it is best to get such property-conveyance procedures clearly outlined in the divorce decree.
|
