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Deeds and Divorce

If you are recently divorced or in the process of getting divorced and the agreement calls for a real property transfer by quit claim deed, do not delay this task. If your future ex-spouse has agreed to sign a quit claim deed to the house, do it now. If you wait until you need to sell or refinance the house, your ex may not be cooperative, or creditors or the IRS may have intervened.

Many divorce attorneys will craft a divorce settlement agreement that simply states that spouse “A” shall relinquish his or her rights in the marital home. Although this provision if agreed upon becomes binding on the parties, if the actual deed of transfer is not drafted and signed, the person that was to release his or her interest still maintains an interest. The divorce agreement is not binding on the creditors of the releasing spouse.

Why you should not delay having your ex-spouse execute a quit claim deed to the house you received in the divorce: If the deed has not been signed and recorded, and your ex gets sued and a judgment is entered against him or her, the judgment will attach to the property. Then, even though the divorce says you get the house, you will have to pay the judgment before you can sell or refinance the property. If your ex-spouse does not pay the IRS, the IRS will attach a lien on the property. Again, even though you have a divorce decree that states you get the house, and that your ex has relinquished all interest, if the deed was not executed and recorded prior to the IRS lien, you will have to deal with the IRS before you can sell or refinance the property.

For attorney drafted property deeds visit Legal Kevin J. Pratt, PC

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