It is unfortunately, but divorce is on the rise again. This usually happens in turbulent financial times. In addition to there being children, there is also real estate. How should real estate be handled?
In the separation agreement, a judge will determine who is to reside where and under whose care the children will be placed. In many cases the final decree will mirror the separation agreement. Here in lies the problem. Unless the final decree specifies who gets sole control of the real estate, all parties originally responsible will still be responsible for the real estate.
Solution? Yes. First, make sure that the final decree assigns all properties specifically to one party or another. The cleanest option would be for the judgment to require the sell of the real estate and the proceeds split between the parties. If that option is not used because one party wants to continue to reside/own the real estate, then make sure that the final decree speaks directly to this fact.
A quit claim deed can be and should be executed along with the final decree removing the party from ownership. The next step should be that the non-owning party contact the mortgage company immediately. Submit to the mortgage company a copy of the final decree, quit claim deed and a letter requesting to be removed from the mortgage and all financial obligations from this day forward.
If this very important step is not taken, then a nightmare can occur later. I recently had a client who had remarried and he and his wife were trying to purchase a home. Unfortunately, because he neglected to contact the mortgage company and his ex-wife failed to pay the mortgage in timely manner for many months, his credit suffered badly.
If you experience the traumatic event of divorce, be sure that you take all the necessary precautions to protect yourself. I hope this has been helpful.
I was questioned this morning about a quit claim deed. So many people think that they can transfer their responsibilities of real estate using this instrument. But not true.
A quit claim deed simply gives title to something to another person. For example, if a couple wants to purchase a house but both cannot qualify, it may be purchased only in one if their names. Then after the closing a quit claim deed can be executed to add the other spouse to the title. Now this original spouse is still solely responsible for the mortgage, but now the other spouse is part owner.
Another way a quit claim deed can be used is in the instance that a paid-off house can be deeded to another such as a child. So a parent may decide to give a house to their child as a wedding present. They have the option to add the child to the title or completely relinquish all their “claims” to the property using the quit claim deed.
It needs to be clear that the quit claim deed does not eliminate financial responsibilities of a mortgage. However, all owners in the title are responsible for the properties taxes.
It’s important to know what a quit claim deed and how to use it. Hope this helps.
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As a professional full-time Associate Broker of real estate, vegan, and woman who does her best to look for the positive in life, my blog features real estate information, recipes, tips on living a healthier lifestyle, motivational stories, and quirky tidbits. Joiful Thoughts comes to you weekly up to three days a week. I would appreciate feedback and comments--I enjoy ongoing dialogue, and I'm happy to answer your questions.