Legal Question in Real Estate Law in Colorado

Re: Home Title

Well, the simplest advice is to draw up a warranty deed from your husband to you and your husband as 90% tenants in common and your parents as 10% tenants in common.

However, this may violate the terms of any existing mortgage on the property and allow the mortgage owner to require payment in full of the mortgage. You may wish, in such an instance, to refinance the mortgage in all of your names and percentages and change title at that time.

Another issue is title insurance: currently, I assume it insures only your husband's title. I would suggest that you get the title insurance company to actually record the warranty deed and issue a new owner's policy of insurance with the new percentages insured.

Finally, there may be tax issues, particularly if no real consideration passed between your parents and your husband for their 10% interest. Further, such a sale, if actually made, could run the risk of effecting a tax event which could subject your husband to capital gains treatment. In addition, there may be questions related to your ability to treat any sale of the house as falling under the $500,000 personal residence tax exemption.

I would recommend you speak with both legal counsel and your accountant about these issues before you proceed any further.