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Quitclaim deed vs interspousal deed 2018-05-20T08:31:13+00:00

LandInvestors.com Forums **Ask A Question** Quitclaim deed vs interspousal deed

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  • Milan
    Participant
    Post count: 407

    I noticed recently on one of my closed deals closed by title, title company used interspousal deed instead of quitclaim deed.

    Pretty common situation. And I’m doing one like that right now.

    Husband owns land and he is the only one on deed. But he’s married and this is California – community state. And property was deeded to him by his uncle by quitclaim deed. He is married.

    Land is little higher deal – buying it for $8K and I decided to not use title. I can stand title companies anymore 🙂

    This is what I’m doing. Using 2 deeds:

    Interspousal deed – Wife grants to husband the property – she signs this one.

    Grant deed – husband grants property to me – he signs.

    I record both of them at the same time.

    Would you guys do anything differently?
    I had an idea and learned to use interspousal deed in California from this particular title company.

    Why the choose to use interspousal deed instead of quitclaim deed? Or is it the same thing really? Thanks for your opinion guys.

    Kevin Farrell
    Moderator
    Post count: 626

    I know CA can be unique but I am doing a deed now for land purchase in Texas – another Common Law state. The property is in husbands name only. I am getting Husband and wife to sign on the deed to avoid title issues in the future. This may not be technically correct since wife is not the grantor, but more signatures can’t hurt.

    I found a brief article about interspousal transfer deeds. Looks like it is used in specific cases of divorce or separation of individuals finances. Milan, it appears that your method will work.

    I would like to hear from others on this topic.

    Milan
    Participant
    Post count: 407

    Yes Kevin, I used to do it exactly the same way. Use grantee as grantor, which would be only the husbands name. Create one extra signature line for the wife and she signs too.

    But it looks like, this is not the correct way to do this.

    I held few properties only in my name when I started this bussiness and sold 2 through title. Title company in both of the times requested my wife to sign interspousal deed.

    We are not going through devorce or anything like that.

    The reason I’m really trying to figure this out, is because I got rejected by title companies few times. They refuse to insure the property because of the wrong paperwork – deed handling.

    So the big question is:

    Do you let the spouse just sign the deed? quitclaim the property to a husband? or sign the interspousal deed?

    Anyone has any experience in this?

    Matt
    Participant
    Post count: 128

    I’m not 100% sure what the best course of action is. I’m commenting so I can follow any developments here because I too am interested in hearing the right way to do this.

    My instinct would be that if the title company has been making you sign interspousal deeds then maybe your best bet would be to have your sellers’ spouse (the one who is not on the deed) sign an interspousal deed.

    Also, correct me if I’m wrong, but this applies to community property states. If it is not a community property state then you’d be ok to just purchase the property without the additional spouse needing to sign anything right?

    Sincerely,

    Matt

    Kevin Farrell
    Moderator
    Post count: 626

    Matt – You are correct, the interspousal deed will be used in Community Property States as Milan discussed. I think that the interspousal deed may be a California thing, but I don’t know for sure. I have bought and sold in other Community Property States and have not run into it before. I have also noticed that on lower value properties that you don’t close in a title company, the issue will never come up because you are not trying to insure it. By ignoring proper deeds for Community Property on some parcels, we may be setting someone up for a problem in the future when they sell the land.

    Milan – what about owning property in an LLC? Will that keep your spouse out of it in a community Property state like CA?

    Milan
    Participant
    Post count: 407

    I’m closing one deal right now in California using inter spousal deed and grant deed at the same time. Wife deeds to husband using Interspousal deed and husband deeds to me with Grant deed. Simple. Easy.

    I’m pretty sure I can also use quitclaim deed for this too. From now on, I won’t do extra signature line for spouse on one deed. I learned this from title company closing my deal.

    Matt, if you’re LLC I’m not sure how that would work. I operate in my name still.

    Milan
    Participant
    Post count: 407

    I found a great guide how to transfer property in California. Based on this only 3 deeds should be used in California – grant, quitclaim and interspousal.

    Interspousal dead by definition means transfer in community property state based on this guide.

    Here it is: https://saclaw.org/wp-content/uploads/sbs-completing-and-recording-deeds.pdf

    Matt
    Participant
    Post count: 128

    @milan Holy cow that thing kicks butt! If you (or anyone for that matter) has something comparable in any other states please feel free to share that. I think creating deeds is one thing that we don’t have great resources for.

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