Legal Question in Wills and Trusts in California
My husband's homes (personal residence and rental property) are underwater. I am neither on the mortgage nor on title (he owned the properties prior to our marriage). He states that he wants me to sign a quit claim for the properties in case something happens to him because the banks may come after his estate to satisfy the outstanding mortgage debt. We live in California & were married in California)
1) Is what he saying correct would/could the banks go after the estate?
2) Is there any other way to protect his estate/other assets other than a quit claim?
3 Answers from Attorneys
Don't sign. Consult a family law attorney.
Your husbands attempts to transfer the property and avoid the creditors will not work. The mortgage companies have a lien on the property and can foreclose against the properties if ever in default. If there are second mortgages, the debt is owed by your husband and his estate. Transfering the properties to you solely will probably be seen as fraudulent, especially if there is no consideration paid for the title transfer.
Given these additional facts, I recommend you obtain post-nuptial agreement so to clearly separate your two estates. Please consult with a family law attorney in your area.
If you are not on title, there is no reason for you to sign a quitclaim deed. In order for the lender to go after the estate, the lender would have to file a judicial foreclosure action, against the estate. That is incredibly rare.
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