Any real estate document can be complicated, including documents associated to the deed, which conveys ownership, or a deed of trust, which conveys financial responsibility. When a marriage dissolves, considerations are focused on interspousal transfer deeds or quitclaim deeds based on statutes of limitations.
Interspousal Transfer Deeds vs. Quitclaim Deeds
Interspousal transfer deeds and quitclaim deeds transfer all rights to a property to one spouse, but do not cancel out the financial obligation from both parties. The choice of which to use is dependent on whether a divorced couple lives in a community property state. Regardless, the only way to modify a mortgage is with a refinance and new deed to whichever spouse maintains the property.
California is the Exception
While most states do not have a statute of limitations or time limit on when a party can file an interspousal transfer deed or quitclaim deed, California tax law requires a reassessment every four years. If neither deed is filed for four years after a dissolution of marriage, the deed cannot be changed. California is the only state that has such a limitation.
For any deed to be valid, it must be approved, notarized and signed by all parties, including the mortgage company. In some cases, the mortgage company will require a refinance of a mortgage when a couple is divorced. If the spouse remaining in the property cannot refinance on her own, then the couple will sell the property and split the proceeds.
- Mortgage Fit: Interspousal Transfer or Quitclaim Deed?
- HG.org. "Contracts 101—Warranty vs Quitclaim Deeds." Accessed Aug. 12, 2020.
- Realtor.com. "When Do You Need to Get a Quitclaim Deed?' Accessed Aug. 12, 2020.
- DivorceNet. "Interspousal Transfers Versus Quit Claim Deeds." Accessed Aug. 12, 2020.
- California State Board of Equalization. "Property Ownership and Deed Recording," Page 7. Accessed Aug. 13, 2020.