“Titled” property refers to property that’s legally in your name. This would encompass assets such as real estate and financial accounts (like checking, savings, and investments). Motor vehicles will also typically fall into this category.
Ownership of real estate is evidenced by a “deed”. Adding a spouse as an owner requires the preparation, signing, and recording (filing) of a new deed. This new document transfers ownership of the property from the spouse who currently owns the property, to that spouse and the new spouse together.
There are various types of deed. When it comes to a transfer of ownership between spouses, a “quitclaim” deed is often the document of choice. This kind of deed simply transfers whatever rights the current owner has in the property, without the owner giving any guarantees about ownership. This usually avoids the expense of a “title search,” which is an investigation of previous ownership and liens against the property.
Another element of adding your spouse to a deed is determining the type of ownership. A common method of ownership between spouses is known as a “joint tenancy with right of survivorship.” This means that you own the property together, and if one spouse dies the property automatically goes to the surviving spouse. (In some states, such as California, you can also own real property through a “tenancy by the entirety” or as "community property.") A right of survivorship normally excludes the property from probate when the first spouse passes away.
This entails contacting the various financial institutions holding the accounts. They will provide you with the forms needed to add your spouse as an owner. Just as with real estate, you’ll probably be able to opt for joint ownership with a right of survivorship.
Note that financial accounts that exist by reason of a spouse’s employment, such as pensions and 401(k) plans, fall into a different category, and are governed by different laws.
Many people feel that dealing with a state’s motor vehicles department is often on par with getting a root canal. But if you want to add your spouse to your vehicle’s title, you don’t really have a choice. Contact your local motor vehicles office to get the necessary paperwork for the ownership change.
There could be. For example, if you have a mortgage on your home, or a loan on your motor vehicle, you have to be particularly careful. Your real estate mortgage, or motor vehicle loan, will often have a clause that says if there’s a change in title, the balance due on the mortgage/loan immediately becomes payable in full. An asset doesn’t have to be sold for there to be a change in title. Just adding your spouse’s name could be enough. So although your name will be on the new deed or vehicle title, adding your spouse could trigger an acceleration of payment.
In situations like this, you can speak with the mortgage company or lien holder to see if there’s a viable way to change the title without violating the terms of the existing loan. If there isn’t, you may need to refinance the mortgage or loan to include your spouse as a borrower.
Something else to remember is that by adding your spouse’s name to your accounts, and thus giving your spouse an ownership interest, you’ve relinquished sole control of those assets. Thus, a spouse could conceivably empty out a bank account or, in certain circumstances, attempt to force a sale of the real estate. Likewise, if your spouse has debts, your real estate (depending on the type of ownership) and your financial accounts could be fair game for your spouse’s creditors.
And where property you brought into the marriage may have been exempt from distribution in case of a divorce, that will no longer be the case once you give your spouse an ownership interest in that property.
Finally, if you have children from a prior relationship, it may be your desire to leave certain assets to them when you pass away. Adding a new spouse to the title of those assets could end up negating your intended disposition of the property.
In light of the possible complexity and consequences of adding a spouse to your titled property, consider consulting with a knowledgeable local attorney before moving forward.
