To add a new spouse's name to your house deed after you get married, you may want to use an interspousal grant deed. While other types of deeds can accomplish the same objective, an interspousal grant deed has tax incentives that could save you money. You can also use an interspousal grant deed to remove an ex-spouse's ownership rights after a divorce.
An interspousal grant deed transfers ownership rights in real property between spouses or domestic partners.
What is an Interspousal Grant Deed?
An interspousal grant deed is legal jargon for a deed that transfers the ownership of property between spouses. In states that use interspousal deeds, they can be a good way to avoid tax liability when moving property from one spouse to the other. Generally, when you transfer title to a property, the county may levy a transfer tax and may reassess the value of the property for property taxes. This could increase your real estate tax bill. An interspousal transfer deed, by contrast, is specially designed to be tax neutral. It should not result in a reassessment and therefore is a cost-effective method of transferring real estate between spouses for estate planning purposes or after a marriage or divorce.
Interspousal Deeds Come with Warranties
When you sign an interspousal deed, you are making a promise that you own the property and have authority to transfer it. Contrast this with a quitclaim deed, in which you merely transfer any ownership interest you may have in the property without any promise that you have any interest at all. Any mortgages or liens on the property, such as for unpaid taxes, must be disclosed on an interspousal grant deed, as you're also making the promise that there aren't any mortgages or liens other than those you listed.
Be aware that interspousal grant deeds are not available in all states. Ask at the clerk's office or consult a local attorney who specializes in property law to find out if this option is available for you.
How to Prepare Your Deed
Before writing an interspousal deed, you'll need to gather some information about the property you're transferring. Go to the recorder's office in the county where your property is located and request your current deed. More populous counties typically have websites with resources and information that can save you a lot of time, so do an internet search first. You'll need information from the current deed to complete your new interspousal grant deed, such as the parcel number of the property.
Because you're making promises through the deed about the ownership of the property, you'll need to order a title search and get title insurance before you sign the deed. You can do a title search yourself, but this can be a fairly complex and time-consuming process if you don't know exactly what you're looking for. The title insurance company typically does its own title search anyway. You'll make a one-time premium payment for title insurance, which protects you if someone challenges your claim of ownership of the property.
Sign Correctly or it Won't be Valid
The recorder's office has fill-in-the-blank forms you can use for your interspousal grant deed. If you're unsure on how to fill these out, ask at the recorder's office or consult an attorney. It's unwise to simply guess, since an incorrect deed can muddy the chain of title for your property. Once you've completed the form, you must sign it in the presence of a notary public. You can find notaries at banks or your local courthouse.
Although it may sound counter-intuitive, adding or removing your spouse from the deed through an interspousal grant deed is still legally considered a transfer of property ownership. After filling out and signing your deed form, you must file it with the county recorder's office for the transfer of ownership to be legally official. You'll typically need to pay a fee to have the document recorded. You may want to call the recorder's office ahead of time to find out the amount of the fee and what methods of payment are accepted.
What are the Benefits of an Interspousal Grant Deed?
There are other types of deeds you could use to add a spouse's name to your property deed, or to remove her name following a divorce. However, using an interspousal grant deed may come with substantial tax benefits. In some states, such as California, you don't pay additional tax when transferring property between spouses. Additionally, a property ownership transfer typically triggers a reassessment of the property's value for tax purposes. This reassessment is often waived for interspousal transfers.