Legal Question in Real Estate Law in California

Re: California Grant Deed

It may not be strictly necessary, but if you want title insurance down the road, they are going to required the non-owner spouse to sign off. You are better off obtaining the deed now and recording it, than doing it at a later date when it might not be as easy to obtain the signature.

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Re: California Grant Deed

The title insurance company has the authority to deny title insurance.

Even though the property is not in your sister's husband's name, he could still acquire a community property interest in it. In order to avoid this, either he will need to sign a transmutaion agreement or your sister's interest will need to be put in trust.

Re: California Grant Deed

The title company is probably expecting to sell a policy of title insurance to the new owners-to-be, and in preparing to do so is taking every possible step to minimize its risks.

The grant deed should specify that the grant of a part interest to the married sister is made to "a married woman, as her separate property."

Frankly, I think the interspousal deed is useless. The sister's interest will be her separate property at the moment the deed is delivered, with or without the help of the proposed interspousal deed. Further, what happens the day after, or the decade after, would be unaffected by the interspousal deed, which cannot control, prevent, stop or explain away possible future community interests that might arise in, say, 2010.

So, while the title company gets to make up the rules for what has to happen before it will sell a title policy, those rules can be silly.

Re: California Grant Deed

This is prudent in order for your sister to maintain the property as "separate property", as her husband could claim a community property interest in future.

Re: California Grant Deed

He doesn't need to do that as long as the transfer is to your sister as her sole and separate property and either (1) no community funds are used for the house, or (2) he gives her a transmutation agreement in which he agrees that the asset will be her sole and separate property. It would be best to have the transmution agreement notarized so it can be recorded.