Transfer due to Divorce

We prepare and record interspousal quit claim deeds to change real property ownership in California between a husband and wife due to divorce, judgment, court order, or marital agreement. 

Surviving Spouse Post Death Transfers

We prepare real property transfer deeds and court orders to change ownership between a husband and wife due to the death of one spouse. Below are the most common forms of ownership. In each of these situations we can help. Each link provides more information. 

Surviving Spouse of a Trust

Title held as joint tenant

We also prepare deeds to add a spouse or partner as an owner in joint tenancy.

Community property with right of survivorship

California’s Recording System California maintains ownership records by county. Each County in California is responsible for knowing who owns each and every real estate property within the boundaries of that County. The interspousal grant deed is filed with the County Recorder’s office. 

Intersposual deeds in California are exempt from transfer tax and property tax base increase. The grant deed needs on its face a reference to the California tax law that exempts the deed from a transfer tax. The Preliminary Change of Title Report provides information to establish why the transfer is exempt from an increase in the property tax base.  Deed and Record provides the transfer tax exemption law reference and the Preliminary Change of Title Report. 

Still have questions? Please contact us anytime! We look forward to hearing from you.

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Legal Rights to Community Property, Separate Property and Quasi-Community Property

For a married couple living in California, real property located in the United States is classified as either separate property, community property or quasi-community property. The classification has great impact on each spouse’s legal rights to the real property. The classification is determined by when and how the real property is acquired.

Real property acquired prior to marriage or from an inheritance is separate property. Separate property belongs to spouse who either inherited the property or purchased the property prior to marriage. Real property acquired during the marriage from income of either spouse is community property with each spouse owning one-half.

California is a community property state. Most states are common law states. Quasi-community property is real property outside of California acquired during marriage. Quasi-community designation confers community property rights on these real properties and subjects them to the laws of the state of California for couples living in California.

If a married couple divorce, each spouse owns one-half of real property classified as community property and quasi-community property. The spouse who owns real property classified as separate property is the sole owner of that property in a divorce. But separate property can be transformed into community property by a process known as transmutation.

Transmutation occurs when the non-owning spouse is added on title as an owner by a deed. Another type of transmutation occurs when the principal of a loan on separate real property is paid from income of the marriage. For example, one spouse owns a house acquired prior to marriage. During the marriage payments are made on the loan. The non-owning spouse acquires a community property interest in the property in proportion of loan principal paid down during the marriage to total market value.

How real property is classified also affects inheritance rights of the surviving spouse. For community property the surviving spouse owns one-half and inherits the other half. Community property receives a step up in basis on the death of the first spouse for favorable capital gains tax treatment on the subsequent sale of the real property.

Separate property owned by the deceased spouse is inherited by both the spouse and children of the deceased.  This requires the children’s consents and cooperation in the sale or financing of the real property. Children under 18 cannot contract. Any sale with a minor as a co-owner requires appointment of a guardian in a court of law.

All real property owned in a marriage, regardless where it is located in the United States, is either separate, community or quasi-community property. The designation affects a spouse’s rights in a divorce or on the death of the other spouse. As a general rule a spouse will always have a one-half interest in community and quasi-community property. A non-owning spouse will have either no ownership or at best, a partial ownership interest in separate real property.

Mark W. Bidwell, an attorney licensed in California. Office is located at 4952 Warner Avenue, Suite 235, Huntington Beach, CA 92649. Phone is 714-846-2888. Email is Mark@DeedAndRecord.com.

Service for California Real Property Owners in Marriage, Divorce and Death by Deed and Record

Deed and Record prepares deeds and affidavits for California real property and real estate ownership transfers between spouses due to marriage, divorce or the death of one spouse.  

Deed and Record prepares deeds, affidavits, trusts, court motions and probate petitions for California real property and real estate due to marriage, divorce or the death of one spouse.

Marriage

One spouse comes into a marriage owning real property in California. The cheapest and easiest way to avoid probate is to add the other spouse on title as owner by deed. But California is a community property state.

In the event of divorce both spouses will have equal ownership of the real property. Deed and record continues to prepare deeds to add a spouse as owner but now prepares separate property, living trusts. The trust is backed up by a transmutation agreement affirming and acknowledging the separate property interest.

Separate real property is transferred into the trust. On the death of the owning spouse the real property is transferred to the surviving spouse. In the event of divorce the real property maintains in separate property advantage and belongs to spouse who bought the real property.  

Divorce

By court order or stipulated agreement real property in a divorce is awarded to one spouse. But transfer of ownership is not complete. The non-owning spouse must also be taken off title with the County Recorder.

Deed and Record provides documents and service to bridge the ownership transfer from the Superior Court to the County Recorder. A spouse is taken off title with the County Recorder either voluntarily or by motion filed with the court.

A cooperating spouse signs a deed granting all of his or her one-half interest in the real property to the other spouse. The deed, also known as an inter-spousal deed, is filed with the County Recorder. Deed and Record continues to prepare and record inter-spousal deeds.

Deed and Record has expanded it service for those spouses who refuse to sign the deed. The non-cooperating spouse is removed by a motion filed with the Family Court. The motion requests an order for the Clerk of the Court to sign the deed on behalf of stubborn ex-spouse. The deed is then filed with the County Recorder. 

Regardless of the method, the non-owning spouse is not removed as a borrower and remains liable for the debt. To end responsibility for the debt, the loan must be either refinanced or paid off.

Death of First Spouse

Deed and Record provides non-probate transfers of real property by affidavit of death.  Couples who own real property in California as joint tenants, community property with right of survivorship or in trust will avoid probate on the death of the first spouse. These forms of title allow for surviving spouse ownership by filing an affidavit of death with the county recorder.

The problem remains of probate on the death of the second spouse. To avoid probate on the death of the second spouse a trust is needed. Deed and Record has expanded service from just preparing deeds for existing trusts to creating the trust.

Affidavit of death will not work for California real property owned solely by one spouse. Transfers to the surviving spouse are done by small estate administration, spousal petition or by formal probate administration.   

Small estate administration is for a deceased spouse who had less than $166,250 in assets. The real property’s market value on date of death must be less than $166,250. Deed and Record offers this service of expedited filings with the Superior Court for real property less than $166,250.  Service has now been expanded to spousal petitions and formal probate petitions in Superior Court.  

Rights of Survivorship

The rights to survivorship must be clearly stated on the deed. Absent the magic words “joint tenants” or the entire phrase “community property with the right of survivorship” the default is as tenants in common. The distinction determines who inherits and if the assistance of the probate court is needed

Carefully Consider Your Options as a Co-owner of California Real Property                                                                      

Individuals who take title in name only to California real property have three options to own. Options are either as tenants-in-common, joint tenants, or as “community property with right of survivorship.”

The distinction between these options is what happens to an individual’s share of the real property when that person dies. The right of survivorship is the key distinction. This right is found in joint tenancy and community property with the right of survivorship. Just the term “community property” does not create the right of survivorship.

When a co-owner dies, the right to survivorship transfers the deceased owner’s interest to the surviving owner or owners. This transfer is automatic in that it happens without any action by the survivor. But the survivor must inform the county where the real property is located that a co-owner has died.

Informing the county is by an affidavit death. A death certificate is attached to the affidavit and both are recorded with the county. Until the affidavit is recorded, the surviving owner cannot sell or use the real property as collateral to borrow.

The other option to own is as tenants-in-common. On the death of a co-owner, his or her interest transfers not to the survivor, but to the deceased heirs. The heirs are identified in the will. If there is no will, heirs are identified by California law known as “intestate succession.”

Intestate succession is a default government plan for those who do not plan. In this default plan the first to inherit is the spouse. If there is no spouse, then it defaults to children. If there are no children, parents inherit and so on. The major problem with either a will or intestate succession is the heir or new owner must file a petition in probate for in probate court. Probate is costly and is time consuming.

Default also applies to the types of co-ownership. To have the right of survivorship, owners must be identified in the deed as joint tenant owners or as community property owners with the right of survivorship.

All other co-owning default to tenant in common. So, if just names are listed as owners, the default is tenants-in-common. Phrases such as “husband and wife” or just the words “community property” also default to tenants in common.