Legal Question in Real Estate Law in California

Re: What is an Interspousal Transfer Deed

Answers to your questions, based on the limited facts given which necessarily makes the anwwers somewhat unreliable because one can always imagine additional facts that would tell a different tale:

1. No, quitclaiming your interest in a rental property does not affect your interest in your community-property marital home. Obviously, you need to read deeds or anything you sign to make sure they in fact do what you're being told they will do....in this case, you should have read the description of the property! Also, any such deed should clearly be a quitclaim rather than a grant deed, because in the former you give up only whatever right, title or interest you have, while in the latter you warrant that you have good title to the property conveyed.

2. The benefit to your husband is that he will indeed find it easier to refinance. This is an indirect benefit to you if it helps make his investment activity more profitable. On the other hand, real-estate speculators sometimes refinance to pull out cash as property appreciates, and not necessarily to reduce their payments, so the refinancing might make his operation more highly leveraged and sensitive to market downturns, vacancies, and other short-term reverses.

3. No.

4. Perhaps. Two troublesome concerns arise for me upon reading your facts and questions. First, you don't seem to trust your husband. Mistrust like this is usually not groundless. This real-estate business may affect community credit, income and financial liability.

That leads to the second concern, and that is whether he is indeed dealing only with his separate property, or whether there is some community money being used here. After eight years of marriage, it's rather likely that separate property brought into the marriage by one spouse or the other has become commingled with community earnings or assets so that it has lost its separate-property character. Where, for example, did the down-payment money for this house come from? Is it entirely traceable to his pre-marriage assets, or to inheritances or gifts he's received since marriage? His salary during marriage is community property, and so is anything he buys with it, including investment real estate. So, even though the deed you signed may not have amounted to a surrender of an interest in the home you live in, you may unwittingly have given up a valid community interest in the rental or investment property.

My advice is to take your questions, my answers, and any other documents you can find and copy to a local family-law attorney and obtain some further advice; what's going on here could range from perfectly innocent and harmless through moderately risky to downright fraudulent, depending upon the source of the funds, the financial leverage he's using, and the accuracy of what he's telling you.

Re: What is an Interspousal Transfer Deed

Your question involves family in addition to real property issues. Until recently such a deed would probably have little affect on your interest in the rental property. A recent appellate court found that signing a quit claim or interspousal transfer deed was a sufficient writing to convert community property to separate property. His credit unless he has substantial separate property and income from the separate property, would be based in his community property income. You should consider consulting with an attorney regarding this before signing a interspousal transfer deed.