This blog was originally published at Divorce and Your Money here.
After your divorce settlement has been finalized, do you know which documents need to be altered, in order to change ownership on your marital home? There are a lot of common misconceptions surrounding the title and deed on the real estate that you and your spouse used to own together. Discovering the difference between the deed and title of your marital home can be downright confusing.
Do you know the difference between these two important items? If not, you might be in big trouble when the time arrives to remove your spouse as a partial owner of the marital home. Find out the difference between your deed and title, so you will know which steps to take when your divorce settlement is finalized.
The title of your home consists of a bundle of rights to your home or other property. Permission to access the property is granted through the listing of your names (yours and your spouse’s) on the title.
The bank typically holds your title until your mortgage has been satisfied, at which point you will have both the title and deed. Transactions from all previous owners can be found by viewing the title history on a particular property, but they should have all been removed through the use of deeds.
The deed to your home is a paper document that shows ownership of the property. It is the physical document that is required to remove someone’s ownership from the property, as is the case when you have been granted the marital home during your divorce. To take your spouse’s name off the title, you will first need to alter the deed and remove their name.
As you begin to celebrate your newly single status, you need to ensure that your spouse’s name is removed from both the title and deed—to completely strip them of their ownership of the property. In order to remove your spouse as a titleholder, you will need to fill out a quitclaim deed.
A quitclaim deed is used in circumstances when the property is not being sold, as is the case for divorcing couples. You will want to execute a quitclaim deed after your divorce settlement is finalized, and you have been granted possession of the marital home.
Once the deed has been altered to remove your ex-spouse’s name from the paperwork, you can make the same change on the title of your home; that will officially absolve them of all rights to the property.
You will need to change both the title and deed of your home to take ownership away from your spouse. However, altering the deed and title does not relieve them of their obligation to the mortgage. The financial obligation of the home is handled through your bank or mortgage company. The only way to lift their financial responsibility for the property is to either sell or refinance the home.
Do not fall prey to the common mistake of only removing your spouse from one legal document or the other. Even before you tackle the financial aspect of what will happen to your mortgage, you can file a quitclaim deed to remove your ex-spouse’s ownership of the property.
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Shawn Leamon, MBA, CDFA is author of Divorce and Your Money: The No-Nonsense Guide and host of the Divorce and Your Money Show on iTunes. Learn more at www.divorceandyourmoney.com.
