Legal Question in Real Estate Law in California

Re: Which deed for married couple

Sounds like you made a mess there. I would need to see all documents and my feeling is that you will want to create a trust and hold the property as well as all other major assets by and through the trust. You may contact me by phone or email.

Re: Which deed for married couple

What you describe is not unusal; obviously, your credit was so bad, possibly you had a bankruptcy or something, that were you to be a purchaser, you would not get a loan, or only get one with higher credit; so, in order for a married woman (or man) to get a loan SOLELY in their name, the lender would have required a quit claim deed from the other spouse--you--before funding. Now that the loan is funded, if you want to be on title also, all that needs to be done is for your wife to execute a quit claim to herself AND YOU, as community property with rights of survivorship or as joint tenants--then you record it--not a big deal. Note, however, if the reason you were not to go on title was because you have judgment liens, tax liens, etc., once you are on title, those liens will attach to the property.

Re: Which deed for married couple

I think the lesson here is to read and understand any legal documents you're handed before signing them.

Under the present state of affairs, you probably have a small interest in the house as a result of community funds being used to pay the principal portion of the mortgage subsequent to quitclaiming away your interest, if any, at the time of that deed (this wouldn't be so if it's an interest-only loan or if the payments are being made from you wife's separate property).

Your last sentence regarding type of deed shows confusion between type of deed and method of holding title. The two basic types of deeds are quitclaim deeds and warranty (or grant) deeds. Either type can be used to convey an interest in real property that will be held by two grantees as community property, community property with right of survivorship, joint tenants, or tenants in common.

Since both of you probably have an interest in the house, but the relative shares would be difficult to determine, I suggest that you use a quitclaim deed form, and that both of you grant your current interests to yourselves as either (1) community property or (2) community property with right of survivorship. (You could also take title as joint tenants or as equal tenants in common, but either would be unusual and you'd need a good reason for doing so.)

The choice between (1) and (2) may depend upon whether either of you has children by a previous marriage or for any other reason wants his or her interest to be separately will-able upon the death of the other, or whether the community interest should simply pass to the survivor of you.

Interspousal deeds are usually tax-neutral, but there is a possibility of violating a provision of your loan agreement, such as a due-on-sale clause. So, read the loan agreement. Also, filling out the deed form correctly and having it recorded properly may call for professional assistance -- if you don't use a lawyer, I'd suggest an escrow or title company, or perhaps an experienced real-estate broker.

Finally, as one of the previous answers suggests, this may be a good time to see a financial or estate planning attorney to see if a trust arrangement would be desirable. If you are both young and in good health, that may not be necessary.