Monday, January 4, 2010

Untangle home ownership during divorce

Each week, Dan Danford answer a question from a reader. We'd love to have a question from you. Please post it in the comments section.

QUESTION: I am going through the divorce process. We’re trying to separate our finances. I’m staying in the marital home, and my husband is leaving. What is the best way to make the house mine and remove his name from the mortgage? Do we have to refinance? Is there anything else we need to do to make sure the house is only in my name?

ANSWER FROM DAN DANFORD: Your lawyer should be able to help you with this. \The divorce decree should detail who owns what, then it's just a question of changing registration to match the decree. Home ownership is shown by a deed filed with the county recorder (could be slightly different in your state). In any case, a new deed should be filed removing your spouse, and changing registration to the way you want it. The lender needs to be aware of this change, too.

All these divorce-related registration issues are very important. That's why you should rely on your attorney to help. The worst-case scenario is that you don't make the changes, and then get brought into an ex-spouse's future lawsuit or credit problems. Don't forget to change beneficiary designation on life insurance or retirement accounts, either. Several years back, I saw a sad situation where a man was killed in a motorcycle accident. He'd never changed his life insurance beneficiary, and the proceeds went to his ex-wife, although he had remarried. There's no need for a mistake like that. Just go through the various statements, accounts, and records to assure that necessary changes get made. And, of course, the easiest time to do that is when the divorce is fresh. This is much several years later when both parties have moved on.

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