Quitclaim Deeds Signed During Marriage
Under California family law principles, the title of a home is an important consideration in determining the characterization of that home as community or separate property. If the parties acquired the home during marriage and took joint title of the property, the home will be considered community property. If the parties acquired the home during marriage and took tile of the property in the name of only one spouse, the home may be considered the separate property of that spouse. In order to title a home in the name of only one spouse, the other spouse must execute some form of title transfer such as a quitclaim deed or interspousal transfer deed.
During marriage, couples agree to put title to their home in the name of only one spouse for a variety of reasons. For example, if one spouse has poor credit or significant debt, the parties may be able to obtain a better interest rate on a loan needed to purchase the house if title is only held by the spouse with better credit or no debt. This issue could arise when the parties initially purchase a home or when they refinance a home previously purchased. Upon divorce, a spouse may be surprised to learn that by signing a quitclaim deed or interspousal transfer deed, he or she relinquished a community interest in the house. The spouse on title could the awarded the house in full, subject to various other community interests or reimbursement rights.
In some of these cases, the spouse taking title in his or her name alone may have had more sinister motives than getting a better deal on the loan. With knowledge of how title to a home could impact characterization of a home, some spouses induce their partners to execute transfer deeds in order to gain an advantage in the event of divorce. These types of transactions between spouses are subject to the fiduciary relationship the law imposes on the parties upon their marriage. Each spouse owes the other a duty of good faith and fair dealing. In property transactions, if one spouse secures an advantage over the other, there is a presumption of undue influence. If the court finds that there was a promise by the advantaged spouse to restore title to joint ownership in the future, the quitclaim deed or interspousal transfer deed may be set aside.
The characterization of real property is a complex area of law that requires the application of many different legal principles. If you are in the process of entering into a property transaction with your spouse or have already entered into such a transaction, it is advisable to consult with an experienced family law attorney regarding its impact on characterization in the event of divorce.
Please contact us if you are considering a divorce from your spouse, a legal separation, or have questions regarding child custody and visitation. Nancy J. Bickford is the only Certified Family Law Specialist (CFLS) in San Diego County who is also a licensed Certified Public Accountant (CPA) with a Master of Business Administration (MBA). Don't settle for less when determining your rights. Call 858-793-8884 in Del Mar, Carmel Valley, North County or San Diego.