May 18, 2023
A deed is a written legal document that indicates the ownership of a property. When you’re married, unless property is specifically in only one party’s name, it will be classified as community property. If you bought the home together, the deed will reflect that you are co-owners of the house.
However, there are a few reasons you may want to transfer ownership to just one person, including settling a divorce or getting more favorable rates on a loan.
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Depending on your reasoning, you can accomplish this either through an interspousal transfer deed or a quit claim deed.
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What is an interspousal transfer deed?
An interspousal transfer deed is when one party transfers ownership of a home to the other party. This transfer moves the property from being owned communally to separate ownership.
Divorce is one of the most common reasons you would want to transfer the title of property to one individual, but it also works the other way.
If you’re married and you want to add your spouse to the title, you would also use an interspousal transfer deed to include them in the ownership.
Putting your marital property in just one person’s name can also be a strategic financial move.
If you need to refinance your home, for example, but your partner has poor credit or a rocky financial history, transferring the title to just you can help you access more favorable interest rates.
It might also be a smart option if one party is facing financial or legal troubles that could put the property at stake.
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More: Protect yourself from home title fraud
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What is a quit claim deed?
This method also transfers the ownership of the property to just one party, much like an interspousal transfer deed. The major difference between a quit claim deed and interspousal transfer deed, however, is that this method has no warranties or promises included.
That means you can use it to declare that one party no longer holds interest in the property without stating the nature of the person's interests or rights. In addition, there's no exchange of money or warranties.
And while a quit claim deed will alter the ownership, it doesn’t impact the mortgage. So, the grantor may still be partially responsible for any outstanding loan amount. For that reason, typically, a quit claim is done only when a home is already paid off.
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You can use a quit claim deed to transfer ownership in the case of a divorce, or when one party simply wants to give up their interest in the home. It’s also a common method of transferring property between family members, such as parents and adult children or between siblings.
Quit claim deeds can also be used to correct simple mistakes like misspelled names or various title defects, such as a missing signature, wording issues or any information errors.
When to use an interspousal transfer deed vs. quit claim deed
On the surface, both an interspousal transfer deed and a quit claim deed involve one party waiving their current and future interest in the home. But because a quit claim deed is less secure with no warranty, it’s recommended that you use them only in cases where you know and trust the other party.
With most title transfers, your county may impose a transfer tax or decide to reassess the property, potentially increasing your property taxes. However, interspousal deed transfers are exempt.
When deciding between the two, it comes down to your personal situation and your goal in transferring the title of the property. If the way forward isn’t clear, it doesn’t hurt to consult a family law or real estate attorney for guidance.
Preparing a deed
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You can find the forms and templates for both deed types online.
Once you have the form you need, you’ll have to ensure the deed is recorded clearly and accurately in writing, including identifying the property and parties in question.
It will also need to be signed before a notary public — a government-appointed impartial witness — and recorded with the county office where the property is located.
Whenever you’re dealing with legal documents, it’s always best to consult an attorney, as some jurisdictions have different rules around the transfer of property. When it comes to the ownership of a house, you’ll want to be sure you get it right.
More: How to fight deed restrictions
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Sigrid is a deputy editor on the Moneywise team, where she has also worked in a number of editing and reporting roles. She has 5 years experience writing about personal finance and takes great pride in demystifying complex financial issues and finding the personal in personal finance topics.
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