Marriage is more than a romantic commitment. It creates a new legal entity -- the union of the husband and the wife -- that sometimes affects the financial aspect of a relationship. Tax filing status and property ownership are two aspects of a couple's financial life that marriage can affect. The state law where a couple lives determines exactly how a marriage affects property ownership.
State Property Law
At the time of publication, there are nine states in the United States that have community property laws: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. If a husband and wife do not live in one of these states and the husband owns the house in which they live in his name alone, and the wife's name is not on the deed, the husband may be able to sell the house without his wife's written consent.
In the nine community property states, the wife may be able to prevent her husband from selling the house, at least temporarily. In Washington State, for example, the wife can file a written instrument claiming an interest in the house with the county auditor where the house is located. The instrument puts a title insurance company, a prospective buyer or anyone else searching public records related to the house on notice that, even though the house is in the husband's name alone, the wife believes she is entitled to an interest in the house. The instrument creates what is called a "cloud on the title" of the home. The cloud can be lifted if the wife releases her interest in the property, or if a court that has jurisdiction over the property orders her interest released.
The law in a community property state may protect a homebuyer who buys a house from a married man who holds title to the house in his name alone. Washington is one state that protects the buyer in this way. Washington law provides that a deed conveying a house from a husband who owns the house in his sole name is sufficient to transfer title to the house free and clear of a claim from the wife if the wife's interest in the house has not been recorded with the county auditor in the county where the property is located.
If a house is in a husband's sole name and the buyer needs to borrow money to buy the house, a lender may require the wife to sign a quitclaim deed to transfer any interest she has in the home to the buyer as a condition of financing. Although the wife may not have any interest to transfer, the lender wants to eliminate problems in the future if the wife should decide to make a claim against the property after the sale closes. Similarly, a title insurance company may require the wife to sign a quitclaim deed to remove any interest she may have in the home as a condition of granting title insurance on the property.
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