Ask the TITLEMAN™ - Legal Separation; Beneficiary Deed
by John T. Lotardo aka TITLEMAN™
Sr. VP/General Counsel, Stewart Title & Trust of Phoenix, Inc.
Q. I am trying to purchase a home while going through the process of getting a legal separation. I have used my husband’s income, along with mine, to get prequalified for the home, and my husband will/might be listed as a co-buyer on the home. If we do a quit-claim deed, will he still be responsible for the mortgage once our separation is final, or can I just use his income and not have him listed as the co-buyer of the home? He does not want to sign any of the paperwork or have his name listed on the title. Can I still get the home without his signature even though we are currently still married and living in the same resident?
A. You bring up several issues that create some concern. First, if you qualify on your own you may still purchase the house on your own. You would typically get a disclaimer deed from your husband since Arizona is a community property state. But the law does sometimes allow you to acquire a property as sole and separate. The law permits the enforceability of purchase money deed of trust signed by only you during the legal proceedings (after you filed for separation but before the court enters a decree). I would be careful about representing to the lender that he is co-qualifying with you with the intent to have him not participate. Also, merely quit-claiming his interest to you afterwards does not remove him from the loan without some form of release of liability from the lender. Perhaps you may want to discuss with your lender about having him act as a guarantor only on the loan so that he would not be on title but would have the ability to have him help you qualify. Each lender handles this differently.
Q. I wanted to know, for my Mother, a couple of things: She wants to do a beneficiary’s deed for a new investment property she bought here putting myself and my two other sisters on it. I am married and so is one other sister. Do our spouses need to disclaim? Also, can she do a beneficiary’s deed for her principal residence in Ohio? Second, Is Ohio a Homestead State? If not, can she claim this Arizona Property as Homestead?
A. She can do a beneficiary deed for the Arizona property specifying that it is sole and separate for you and each of your sisters. By the way, it should be considered sole and separate since it is an inheritance “by gift or devise”. But you can always confirm that right on the beneficiary deed such as “John”, a married man as his sole and separate property, “Suzi”, a married woman as her sole and separate property, etc. But you should also note on the deed how you three would later hold title among the three (all as joint tenants with rights of survivorship, tenants in common, etc.). As for the Ohio property, I am not familiar with the laws for the state and she would need to contact someone in that area. You could always contact a title agency there to see if they can help. I do not think she can claim the investment property in Arizona as her homestead property unless and until she actually moves in and makes it her homestead property.
The information supplied is of a general nature and should not be relied upon as comprehensive legal advice. Please consult with your own local legal counsel. To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.
Copyright John T. Lotardo. All rights reserved. John Lotardo (aka the TITLEMAN™) is Senior Vice-President and General Counsel for Stewart Title & Trust of Phoenix, Inc., and State Underwriting Counsel for Stewart Title Guaranty Company. He is a member of the National Advisory Councils for GoGetEscrow.com, GoGetLoan.com, GoGetNotary.com and GoGetRealEstate.com. The information supplied is of a general nature and should not be relied upon as comprehensive legal advice. Please consult with your own local legal counsel. For more about John, visit: www.GoGetEscrow.com/Get/Titleman or www.AskTheTitleman.com.