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I Thought Our House Was Community Property – Buyer Beware!

By James D. Scott

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 24 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
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crucial information on father rights, parents rights, marital support,
modification of divorce orders, modification of family support,
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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.