How to keep home separate from debts

Question: I’m getting married soon. My fiance owns a home that we want to protect from my adverse credit past. I owe back child support, and I don’t want this property attached to my debts.

I understand from your articles that what I need to do is sign a quit-claim deed and file it at the courthouse. Is this all that needs to be done or are there any other measures that would protect my fiance as well? Do I file this premarriage or after?

Answer: If your wife-to-be owned the house before you married her, it can remain her “separate property” after the marriage as long as you do not go on title with her as a co-owner.

While it is not required by law, it is a good idea to file a quit-claim deed against the property to give public notice that you have no legal interest in the property.

Many people don’t realize that you don’t have to actually own a property in order to file a quit-claim deed on that property. That’s because all that a quit-claim deed says is that you “quit” (i.e. give up) any legal ownership interest that you have in a certain property, even if you never had an ownership interest in it to begin with.

That would be the case if you signed a quit-claim deed to your wife on the house that she currently owns. It does not signify a transfer of ownership, but it does give legal and public notice that you acknowledge that she owns the house as her “separate estate” and you have no legal ownership claim to it.

At my mortgage company, we often do this when we refinance properties that were owned by one spouse before a marriage and that person wants to maintain the property as “separate estate.” The lender typically requires the nonowner spouse to sign a quit-claim deed at the close of escrow to acknowledge that he or she is aware that their spouse is getting a new mortgage on the property, and that they have no legal interest in the property.

Again, this is not required by law. But banks are very conservative and they do this to protect themselves from potential lawsuits in the future. Otherwise, it might be possible for someone to later claim that their spouse took out a new mortgage on “their” property without his or her permission.

Whether you actually need to file a quit-claim deed to your wife before or after the marriage I think is a question best answered by an attorney. Please consult an attorney for more advice on this issue.

One other issue to consider is the concept of community property. If you and your wife combine your bank accounts, and community funds are used to pay the mortgage on your wife’s house, you will acquire a “community interest” in the property.

So I suggest that your wife set up a separate bank account for the mortgage and maintenance of the house to make sure it remains her separate property. Again, please consult an accountant or attorney for more advice.

Steve Tytler is a licensed real estate broker and owner of Best Mortgage. You can email him at features@heraldnet.com.

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