Q: My fiance and I bought a home in 2004. Her name is not on the mortgage, but she is listed on the deed as part owner.
We would like to have her taken off the deed. Is there a way to do this? I wouldn’t think we need to refinance because she is not on the actual loan.
A: You are correct. You can probably take her off the title to the property by having her transfer her interest in the home to you.
She would have to execute a deed to transfer her ownership interest in the home to you. You can use a quitclaim deed or other deed form to accomplish this transfer.
In simple terms, a quitclaim deed transfers any interest a person may have in the property without making any representations as to whether that person owns the home or not. A warranty deed performs the same task but gives the buyer (or person receiving the title) a representation that the person signing the deed and conveying a property has an interest in that property to convey.
Most people use quitclaim deeds to transfer title between themselves. Sometimes, and for obscure title insurance purposes, it may be better to use a warranty deed.
But you need to keep a couple of things in mind when transferring title.
First, there is the cost. In some jurisdictions, municipal officials in their quest for additional revenue are taking a harder line on quitclaim deeds where the parties claim there was no consideration that changed hands between the parties. If a transfer tax is applied, it can make that transfer quite expensive.
Second, you should talk to your accountant to determine if there will be any tax consequences to the transfer. When you and she took title to the home, you each may have become equal owners to the home. That ownership should have had some value. Was her share of the home at the time of the purchase a gift from you to her? Now that she has ownership, is her transfer back to you a gift from her to you? Depending on the amounts involved, you may have reporting issues with the Internal Revenue Service.
Finally, while you did not say why you were unwinding the ownership, if you are breaking up, you’re on the right track. But if you’re getting married and for other reasons are taking her off the title to the home, make sure you have a will or other estate plan in place. You’ll need to take care of your interest in the home should something happen to you and her interest in the home, if your plan would be to have her have the home if something should happen to you.
A good estate planner can probably be of assistance.