Transferring property is a crucial part of the divorce process. Real estate is often the largest property transfer, and it must be done correctly to ensure each party receives a fair divorce settlement agreement.
Property transfer in divorce
In divorce, the division of property is often a contentious issue. Here are some scenarios in which property transfer in divorce could happen:
- When a couple owns a home together, they may need to decide whether one spouse will keep the house or they will sell it and split the proceeds.
- Retirement accounts, such as 401(k)s or IRAs, may need to be divided between ex-spouses.
- Investment properties, rental properties, or vacation homes may need to be sold or transferred to one spouse’s name.
- If one spouse owns a business, the value of the business may need to be calculated and divided between the two parties.
- Personal property, such as vehicles, furniture, and electronics, may need to be divided between the two parties.
Quitclaim deed
What is a quitclaim deed? It’s a legal document used to shift ownership or interest of a property from one person (the grantor) to another (the grantee). The quitclaim deed makes no guarantees about the condition of the property at the time of the transfer or the grantor's ownership rights. This means that the grantor can't be held liable if there are any liens or issues with the property after the transfer.
Quitclaim deeds are often used in situations where a property is being transferred between family members, such as between parents and children or siblings. They can also be used in divorce proceedings when one spouse is transferring their interest in a property to the other.
A quitclaim deed should not be used in a situation where a buyer is purchasing property from a seller they don't know and trust. In these situations, a warranty deed, which guarantees clear title to the property, is typically used instead.
Read: A Real Estate Expert Answers the Top 10 Questions about Divorce and the Home
Warranty deed
A warranty deed is also a legal document. In this case, it may shift property ownership from one person (the grantor) to another (the grantee) while guaranteeing that the grantor has clear ownership and the right to transfer the property.
When a seller uses a warranty deed, they are promising the buyer a property free and clear of any liens, encumbrances, and other title defects. The seller is also promising to defend the buyer's ownership of the property against any claims made by other parties.
Warranty deeds are typically used in real estate transactions between parties who don't know each other or are not related. This is because a warranty deed provides an extra layer of protection for the buyer, who can be assured that there are no hidden title issues that could jeopardize their ownership of the property.
FAQ about property deeds
Which type of deed is most often used in divorce?
The type of deed most often used in divorce is a quitclaim deed. One spouse may want to transfer their ownership interest in a marital property to the other spouse, and a quitclaim deed provides a straightforward way to accomplish this. Since typically the spouses know each other and are aware of the condition of the shared property, a warranty deed is usually not necessary in this context.
Who prepares the deed?
Either the grantor or the grantee can prepare the deed. However, it's recommended to have a real estate attorney prepare or review the deed to make sure it complies with all applicable laws and regulations and that it accurately reflects the terms of the transaction.
Some states and counties also require certain forms or language to be included in the deed. It's important to verify your local legal requirements before preparing a deed.
Does a quitclaim or warranty deed have to be notarized?
Yes. Both a quitclaim deed and a warranty deed must be notarized to be considered legally valid. Both grantor and grantee must sign the deed in the presence of a notary public, who will verify their identities and attest to the validity of the signatures. To confirm its authenticity, the notary affixes their official seal or stamp to the document.
Notarization is required to prevent fraud and ensure that the transfer of ownership is legally binding.
Free Hello Divorce Download: Property Division Spreadsheet
