One aspect of a dissolution of marriage is the division of marital assets. For many couples, the largest asset is their home. The court has two options when it comes to the marital home. If there are not enough assets to equal the equity in the home, or neither party can afford to pay the other party for their interest in the home, the Court will likely order the home sold and the proceeds split. However, if there are other assets or one party can buy the other out, the Court may order the party giving up the home to execute a quit claim deed. Here, we discuss quit claim deeds and how you could use them as a vehicle to facilitate asset division in a divorce.
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When Quit Claim Deeds are an Asset Transfer Solution in a Divorce?
A quit claim deed is an easy way to transfer interests in a home. A quit claim deed has less formality than a standard warranty deed and makes for a quick and efficient transfer among parties who are divorcing.
If you and your spouse agree to execute a quit claim deed, then the question becomes whether to execute the deed before the divorce is finalized or after. If you are the spouse who is receiving the interests from a quit claim deed, it is beneficial to you to have your spouse execute the deed prior to the divorce being finalized. This way you ensure compliance with the agreement and won’t have to go back to court to enforce the marital settlement agreement after the divorce is finalized. Getting the quit claim deed from your spouse prior to the end of the divorce also makes it easier for you to start refinancing and come into compliance with the dissolution of marriage judgment. If you wait to receive the deed until after the divorce, it could take you longer to refinance which could cost extra money.
Things to Consider when Processing a Quit Claim Deed
Prior to signing a quitclaim, you will want to make sure that you and your spouse have a fully executed Marital Settlement Agreement (MSA) that has been signed by both parties. Once a quit claim deed is signed, then the party transferring their rights will have no claim to the home. You will want to make sure that there is an enforceable agreement in place because the this deed only takes you off the title, not the mortgage. The spouse receiving the transfer will be responsible for obtaining refinancing of the mortgage.
Quit claim deeds are a useful and effective tool for individuals going through a divorce. They make it easy to transfer equity in marital real property and many times can be drafted by the same attorney you are using in the divorce. It is important that if you are going to sign a quit claim deed, you have your own attorney review the document and have a signed agreement in place. Once the quitclaim deed is signed, it is difficult to undo the transfer.
If you are going through a divorce and want to explore if quit claim deed is right for your situation, be sure to seek experienced legal advice. Feel free to contact our office today to schedule a confidential consultation. Our team of experienced and top-rated family law and divorce attorneys in Chicago will help you make the right choices.
