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Posted on January 12, 2014 in Assets

In today’s real estate mortgage market, one spouse often has better credit than the other spouse. In order to obtain a more favorable interest rate on a mortgage, one spouse will quit claim their interest in the house to the other spouse as their sole and separate property. This form of title is often demanded by the lender. The house is being purchased during the marriage and the married couple believes in good faith the house is community property.

In the past courts did not exalt form over substance. The new house title in form is separate property, yet the substance and intent of the parties was to purchase the house together as community property.

The courts have reversed themselves in the recent case of, “In re Marriage of Matthews”, and courts are enforcing the form of the transaction and not the substance. Therefore, if your house was purchased under similar circumstances, you will need a written document signed by your spouse transmuting what is titled as separate property into community to do this and at the time of a divorce you will likely not receive your intended interest in the marital residence. That could result in the loss of hundreds of thousands of dollars.

With over 27 years of experience as a family lawyer working with the California Family Code, I have developed my “100 Most Popular Sections” This listing acts as a guide to common family law sections, with references and descriptions and additional information. Learn more by visiting my favorite California Family Code sections. As a certified divorce specialist, I present the most crucial information on father rights, parents rights, marital support, modification of divorce orders, modification of family support, grandparents right, California custody, military divorce, adoption, prenuptial agreements, substantive rights and liabilities, restraining orders, estate planning, epstein credits, joint credit cards and all aspects of the California dissolution process.

Summary: You and your spouse purchased a home and one of you quit claimed the title in order to get the best interest rate on your loan. Now, in the middle of a divorce proceeding, the ownership of the home may be in question. It is critical that spouse that quit claims gets a written document transmuting separate property to community property. In the event of a divorce or dissolution of marriage, both parties may claim ownership of the home.

The law firm of Scott Family Law is a Certified Specialist of Family Law and practices of Divorce and Family Law in San Diego, CA.