The Transfer of Property Incident to Divorce

by Heather Frances Google

Your divorce judge may issue a divorce decree that is very specific about items of property that belong to you or your ex-spouse, but even with a detailed divorce decree, you must take additional steps to ensure that ownership of your property is actually transferred appropriately. The process of transferring property depends on the type of property in question.

Real Estate

If you or your ex-spouse is keeping your house, you may need to change the names on the deed and mortgage. Typically, you can transfer ownership in the property by signing a quitclaim deed, but this does not change your liability under the mortgage. A quitclaim deed is a way of giving any rights you may own, if any, to someone else without guaranteeing that you own a particular share of the property. For example, if you are giving up ownership to your ex-spouse, you may sign a quitclaim deed to give him the house itself, but you will remain liable for the mortgage until he refinances the loan. If you give up your share of the equity in the house, you will often receive a larger share of some other marital property. Alternatively, your ex might buy your share of the equity.

Retirement Plans and Pensions

If you split a retirement plan or pension as part of your divorce settlement, you typically need a document called a Qualified Domestic Relations Order, which permits the plan administrator either to disburse funds now or later during retirement so that you receive your portion of your ex-spouse's benefits. QDROs apply to many plans, including pensions, profit-sharing plans, 401(k)s and stock bonus plans. An IRA does not require a QDRO, but the divorce decree must be worded correctly to ensure that money from the plan can be transferred without negative tax consequences.

Vehicles

Like real estate, transferring your marital vehicle may involve both the transfer of title and the transfer of the loan. Typically, you can remove your name from the vehicle by completing a form with your state’s department of motor vehicles or vehicle registration agency. Your lender may require your ex-spouse to refinance the vehicle loan to remove your name from the loan, thereby releasing you from liability for payments. Removing your name from the insurance policy is usually a simple matter of calling the insurance company.

Personal Property

You and your ex-spouse may be able to agree about how to divide your personal property, and the court usually will adopt your decision -- in fact, most courts rather not wade into the details of such matters as who will get the curtains and cutlery. Furthermore, litigating in such detail may be expensive. If you and your spouse can reach agreement on most items, particularly those that are inexpensive or easily replaced, you typically limit your expenses and save time. You may also consider hiring a mediator to help.