Deed / Mortgage Question


#1

My wife and I (VERY HAPPILY MARRIED) have a question regarding the mortgage and deed on our primary residence. I purchased the property about a year before we married and we have now been married for two months.

We have discussed adding her to the deed of the home, but I am worried about the position that would put me in regarding the mortgage since we can’t add her to the mortgage without refinancing (impossible given rising rates). I want to make sure that she’s protected should we eventually split, so could you contact us and walk us through our options here? My read was that she would have an interest in the property without being added to the deed given that marital funds are being used to service the mortgage but would need you to confirm. Thank you.


#2

You are correct. As it stands now, she would have a marital interest based on the payments being made are marital. If the property remains deeded separately to you, you will also have a separate interest in the property in the event that you split. Since you have only owned your house for a short period, this would likely be a very small interest based on the change in market from the date of purchase to date of marriage as well as the decrease in the mortgage that you paid prior to the marriage. If you deed the property to both parties’ names, you are gifting it to the marriage and foregoing any separate marital interest. You will still be solely liable for the debt on the property, but both of you will be legal owners.


#3

I have a similar question, as I have rental properties I owned prior to marriage and am trying to keep separate. If I allow my wife to assist with anything regarding these properties, do I risk turning them into marital assets? I’m speaking of minor assistance. For example, if I pay my wife to clean after a moveout (which she has offered to do recently instead of me hiring a maid service), is this a risk to me? So far she has done nothing on my properties.

Also, can I refinance one of these properties without turning it into a marital asset? She would not be on the deed and I’d only be refinancing the existing balance. The bank wants her on the deed of trust.

Thank you!


#4

If you pay her for her cleaning services, and she doesn’t do it for free, I think that would arguably keep it from converting the property. Conversion occurs when you actively increase the value of the asset or maintain the property during the marriage, either through spending marital money or marital efforts.

Refinancing if you aren’t putting marital money into the residence should not convert the property to marital. Make sure she is not signing any documentation as a borrower, simply as a “non-borrowing spouse” and that she signs a hypothecation clause.