Legal Question in Real Estate Law in California

Re: Mortgage liability dilemma

You probably can be indirectly held liable for your wife's debts. If your wife's bank sues her for a deficiency after foreclosure and obtains a judgment, the bank can go after assets held solely in your name if those assets are community property.

In order to keep assets from being deemed to be community property, you need to do more than just hold them in your name alone as your "separate property." You need to have a written agreement, called a transmutation, signed by your wife stating that the property is your separate property and she has no claim to it. Note that transmutations involve tricky legal issues, so you should get a lawyer to assist you in preparing the agreement. Note that it is recommended that you and your wife have separate lawyers to assist each of you with this agreement.