At times, married couples who have acquired property together need to transfer the interest from the property from one spouse to another. In Illinois, married couples can use an interspousal transfer deed to do just that. While these types of deeds effectively reach the desired goal of transfer, it is important to understand how they work.
What is an interspousal transfer deed?
Interspousal transfer deeds legally transfer the interest of marital property from one spouse to another. An interspousal transfer deed differs from a quitclaim deed in that the entire interest of the property is transferred to the spouse. With a quitclaim deed, the transfer is limited. Quitclaim deeds are often used when no money is owed on the property, or the two parties trust one another.
When are interspousal transfer deeds used?
Most often, interspousal transfer deeds are used in divorce proceedings. However, they are also commonly used to prevent the collection of property payments from an unhappy ex during a foreclosure.
Credit issues are another frequent reason to utilize an interspousal transfer deed. If one spouse has poor credit, and they need to refinance, the spouse with poor credit can be removed so the other spouse with good credit can proceed with the refinance.
Does an interspousal transfer deed relieve debt?
While interspousal transfer deeds do remove the filer’s interest in the property, they do not remove the tie of debt to the property. This is true even in cases of separation or divorce. The spouse will still be required to pay any debt for which they are responsible.
The separation of spouses and property can be complicated, and the process differs depending on the state where the couple resides. No matter what type of deed is chosen to separate the property and owners, it is important the deed is prepared, filed and recorded correctly. Any mistake in the process could be costly in the future.
