Legal Question in Real Estate Law in California

Re: Spousal title tranfer

An interspousal grant deed is preferable because the quality of title is better than the quality of title conveyed by a quitclaim deed.

Re: Spousal title tranfer

I would recommend an interspousal grant deed, as your husband will be transferring his interest as a joint tenant to you as your sole and separate property. A quitclaim deed would only make sense if there was some question as to whether your husband had an interest in the property. From your question, that does not appear to be the case.

Re: Spousal title tranfer

I would recommend the Interspousal Grant Deed (ISD) because there is no guarantee that what your husband is transferring to you is free from all encumbrances of title or other interest. Unless you are also ordering title insurance, the ISD carries with it certain protections where your husband warrants your title to be free from encumbrances he caused that you may not know of, among other things. Additionally, practically speaking, the interspousal transfer deed will prevent a reassessment because along with every deed, you must file a preliminary change of ownership, which does not provide for a reassessment exclusion. It is better to prevent the reassessment now, rather than be reassessed and have to challenge it later.

(Nothing in this message is intended to create an attorney/client relationship, nor should it be interpreted as legal advice. The inquiring party should always seek one-on-one legal advice from an attorney qualified in the field, prior to changing their legal position).

Re: Spousal title tranfer

There is another reason to prefer a grant deed over a quitclaim deed, and that is as follows:

(1) A transfer of an interest in real property owned by one spouse as a joint tenant to the other spouse is a transmutation of that property under Family Code section 850(c). (Separate property of one spouse becomes separate property of the other spouse). (If there were a pro tanto community property interest because, for example, earnings of either spouse during marriage had been used for pay-downs of equity on a deed of trust on the property, then F.C. section 850(a) would also apply; and

(2) 'A transmutation of real or personal property is not valid unless made in writing by an express declaration that is made.....by the spouse whose interest in the property is adversely affected;' (Family Code section 852(a)) and

(3) In 'Estate of Bibb' (2001) published at 87 Cal.App.4th 461, the Court of Appeal expressly held that a grant deed was a sufficient "express declaration" to satisfy F.C. 852(a) because, at least so long as it used the statutory language for a grant deed set forth in Civil Code section 1092, it met all the requirements the Legislature had in mind in enacting 852.

It's possible that a quitclaim deed would also be held adequate to be an "express declaration" of intent to transmute property, of course.

The transmutation could also be the subject of a separate written agreement between husband and wife that meets the F.C. 852(a) requirements.