Colorado’s divorce law requires spouses to divide their marital assets in a way that is “fair and equitable,” if not exactly 50/50. One of the most common and most valuable marital assets is the family home. Deciding whether one spouse should keep the home or it should be sold, with any profit from the sale distributed equally between the spouses, is a major decision faced by many divorcing spouses in Colorado.
One critical tool used to meet the court’s requirement for asset division during divorce is a quit claim deed. Before moving forward, it’s crucial to understand what a quit claim deed is and what it does and does not do during divorce.
Understanding the Division of Marital Property In Colorado
Colorado’s divorce laws require divorcing spouses to divide their marital property in a way that’s “fair and equitable,” if not always exactly 50/50. Marital property includes all assets acquired during the marriage, such as real estate, bank accounts, retirement accounts, cars, and household items. In many cases, the marital home is the spouses’ most valuable asset. Since a house cannot be divided between both spouses, the marital home often becomes a contentious aspect of a Colorado divorce.
Depending on the wishes of the spouses, the options for dividing the home include the following:
- The spouse who wishes to retain the home can exchange it for other assets of equal value, such as a retirement account or vacation home
- The spouses can sell the home and divide the equity 50/50
- One spouse can buy out the other spouse’s half of the home’s value
- One spouse may exchange their share of the home to satisfy a spousal maintenance obligation rather than make monthly payments.
Transferring a spouse’s share of marital real estate property to the other spouse requires a quit claim deed in either scenario, whether one spouse buys out the other’s share or when they exchange their share of the property for another asset of equal value or for spousal maintenance.
What is a Quit Claim Deed In Colorado Divorces?
A quit claim deed is a legal document that transfers ownership without a sale. In a divorce, a quit claim deed is used to transfer one spouse’s share of the home to the other spouse. Many divorce settlement agreements or court orders require a spouse to sign a quit claim deed transferring their share of ownership to the other spouse.
Quit claim deeds do not provide warranties guaranteeing that the title is clear of any encumbrances, but they provide a tool for a simple transfer of ownership from one family member to another, typically during a divorce, but also when transferring a property to a family member through a trust or inheritance.
In a divorce agreement, a quit claim deed conveys the spouse’s intent to “quit” the property and all claims of ownership.
A quit claims removes the spouse’s name from the title of the home but does not remove the mortgage. The spouse who is retaining the house must refinance it in their name alone to remove the spouse’s name from the mortgage contract.
Quit claim deeds are the most straightforward way to transfer one spouse’s interest in a property to the other without a typical, open-market sale process. An experienced Denver divorce lawyer can help you with this process and all aspects of your divorce.