Divorce & Real Estate

What We'll Cover

• Types of co-ownership
• Spousal rights to real property
• Division of property
• Agent duties & obligations

Co-Ownership Interests

Tenants in Common

• Two or more owners
• Undivided, equal interest
• Rents & profits
• Partition

Tenancy by the Entirity

• If owners are married, presumed unless otherwise stated
• NOT 1/2 interest...each by the entirety
• Right of survivorship
• 120 hr rule

Non-Marital Survivorship

• concurrent life estates in the two grantees as tenants in common, with a contingent remainder to the survivor

Transfer on Death Deeds

• designate a beneficiary or beneficiaries who will acquire title to specified real property on the individual’s death.

Estates in Land

Fee Simple Absolute

Life Estates

• Duration limited by life of some person
• Alienable

Other Types of Fees

• “. . . to A for so long as the property is used for school purposes, but if it ceases to be used for school purposes, then the property reverts back to the grantor.”
• [Fee simple defeasible / fee simple subject to condition subsequent]

Reversion

• “. . . to A for life.”
• If the grantor does not deed the future interest to a third party, then it is deemed to be retained by the grantor.

Remainder

• “. . . to A for life, then to B.”
• B is an identifiable person and A’s interest is certain to end, so B has a vested remainder.

Adding Partners to Title - Pitfalls

• Mortgage with a due-on-sale
• Title Insurance
• Tax Consequences
• Owner w/o mortgage obligation

Rights During Marriage

• Power to convey interest
• Grantee subject to right of survivorship of remaining spouse
• "Subject to defeasance by his death prior to that of his cotenant."

Community Property v. Equitable Distribution

Equitable Distribution

• Current earnings
• Future potential earnings
• Value of stay-at-home spouse

Distribution of Assets

• Martial settlement agreement
• Judicial court order

Practical Considerations

• Buyout of spouse's interest
• Refi with one spouse only
• Short Sale
• Empty house stigma

Agent Issues

• Client conflicts
• Confidential information

Kevin Harker

Options

• Sell and divide proceeds
• Buyout
• Defer sale

Considerations

• Check ownership/title & court order
• Provide same advice to both parties
• Stay neutral
• Remind parties of the value of cooperation
• Refer to experts (tax specialists, attorney)

Removing/Adding Parties to Title

• Review mortgage/deed of trust
• Verify no impact on title insurance
• Consider potential tax consequences

Quitclaim Deeds

• Quit Claim
• Quipclaim