Whether your divorce is amicable or downright stressful, it’s a difficult process. When you said ‘I do’ you never planned on eventually saying ‘I don’t,’ yet here you are. As if all the paperwork isn’t enough, you have to decide what to do about the elephant in the room – the house. Will you sell the home? Refinance? Perhaps you want to transfer ownership. Unfortunately, it’s not as simple as merely saying you’d prefer your ex-spouse to have it, though wouldn’t that be nice? If you are currently going through a divorce, there are two deeds you should know about in regards to transferring property: the interspousal grant deed and the quitclaim deed.
Interspousal Grant Deed
An interspousal grant deed is used when a married couple owns real property together. Simply put, the deed transfers one spouse’s interest in the property to the other, and lays out specific guidelines as to how any spousal or community property interest the spouse holds will be transferred. This type of deed is beneficial if you were to desire to add your spouse to the title of separate property, or transfer the title to the spouse with better credit in order to refinance or get a better mortgage interest rate. However, an interspousal deed is often used to transfer property in a divorce settlement, as well.
The benefit of an interspousal deed is that it could help the two of you avoid tax liability. In general, most types of property transfers are subject to a transfer tax, but an interspousal deed is exempt from transfer taxes, making it a smart financial method of transferring property between spouses. A divorce can get pricey, so any way the two of you can save money will be a win-win. To get the process started, simply ask your attorney for the form. While there are fill-in forms on the Internet, make sure they meet the legal requirements for your state of residence to avoid wasted time.
Often mispronounced as ‘quick claim,’ a quitclaim deed transfers property ownership from one spouse to another, including any interest. Keep in mind, this type of deed doesn’t ensure that the grantor (the person transferring the property) is the owner with the right to transfer it. Confused yet? Put into language that is easier to understand, a quitclaim deed says “I’m not warranting what I own, but I’m transferring what I own to you.” Basically, there’s no promise or guarantee about property ownership.
A quitclaim deed is often used during a divorce settlement when one spouse has been given the property by their spouse or via the court. A quitclaim deed is simple, easy, and inexpensive, but don’t forget to remove you or your spouse from the mortgage, as the deed doesn’t transfer financial obligations and liabilities.
Make a Move
Regardless of what route you and your ex pursue to transfer property, if you aren’t the one receiving it, you need to make living arrangements. Reevaluate your budget post-divorce and determine what you can truly afford as well as consider your needs. Will you move into an apartment? A townhome? A house? Consider not only your budget, but children if they are involved. Make the move as simple and stress-free as possible by planning in advance the packing, transporting, and unpacking. Use this as a time to part ways with items that hold sentimental value in relation to your ex. However, don’t let the pain and anger lead you to toss something you will regret later such as your cruise photos or home videos.
Getting divorced is a big life transition, and it is what you make it. While it will be sad and maybe even trying at times, simplify it as much as possible by educating yourself about your options. Knowing what to expect and how to go about it will make the process a little easier, and it will become the past in no time.
Article by moneywithjim.org