One of the most valuable assets that a married couple may own is their marital home or other real property that they purchased together. A quit claim deed may be one of the simplest ways to transfer property, but it can also cause unforeseen consequences. An experienced family law attorney can review your situation and advise you whether using a quit claim deed or other strategy will best serve your needs.
What Is a Quit Claim Deed?
A quitclaim deed is a conveyance instrument that transfers any ownership rights a person has in a property to the person to whom it is being transferred. People can sign quit claim deeds even if they have no property interest.
Unlike a warranty deed, the person signing the deed does not provide any type of warranties, such as that the property is free and clear of clouds on the title, encumbrances, or defects. It effectively relinquishes any rights, interests, or claims the person signing away the property has. Because of their simplicity, quitclaim deeds are often used in divorce cases and other instances involving the transfer of ownership among family members.
How Quit Claim Deeds Are Used in Divorce?
Quit claim deeds can be used in several ways during a divorce, including the following:
- Transferring property to a spouse: A quit claim deed can transfer ownership of the marital home from one spouse to the other. Your divorce settlement or decree may require the execution of a quit claim deed.
- Equalizing property division: Colorado is an equitable distribution state for property division during divorce. Courts don’t have to award 50/50 ownership to the spouses, but they will try to make the division of property as equitable as possible, considering various factors. Spouses could also include a transfer of property as part of their settlement agreement, allowing one spouse to retain the house, for example, while the other receives the retirement accounts.
- Facilitating a buyout: After a house buyout is complete from one spouse to the other, a quit claim deed can effectively transfer the title.
- Satisfy spousal support obligations: A quit claim deed may be used to satisfy spousal support obligations rather than making future cash payments.
How Do Quit Claim Deeds Affect a Mortgage?
Quit claim deeds do not affect a mortgage. A mortgage is a contract between you and the mortgage provider.
Even if you sign away your interest in a property, you are still obligated to pay the mortgage until it is paid off – according to the original terms of the mortgage or through a buyout with your spouse, or by refinancing the property. It’s important to understand that the signing of a quit claim deed does not affect your responsibilities under an existing mortgage.
If your spouse fails to make the payments, the bank could still pursue you for payment, which can have a significant impact on your credit.
Contact Us Today For Help Evaluating Your Options
If you would like to know whether signing or accepting a quit claim deed is best for your particular situation, reach out to Stahly Miner LLC. We can review your situation and explain any potential complications that may arise. Contact us at (303) 797-2900 for a confidential consultation.