Client Success Story: Sorting Out Real Estate for Divorcing Couples
A client in a divorce case contacted Minchella & Associates regarding a real estate asset division. This was the non-retaining spouse, hoping a quitclaim deed would be enough to remove liens in their name and receive half of the accrued equity on the family home. In short, they wanted to capture their equity and let their ex-spouse have the property and the debt.
Their hope was to manage the property issue quickly and affordably without future legal issues.
A quitclaim deed alone was not enough to ensure both parties receive their intended compensation from a property. It is simply a formal way to renounce a party’s legal ownership of that property in a divorce. In this way, a quitclaim provides the retaining spouse with full ownership of the home but without more, doesn’t legally obligate them to compensate the non-retaining spouse. This can prevent the parties from getting the solution they agreed to in the divorce proceedings.
Unless properly handled, only having a quitclaim on the house could have required the non-retaining spouse to seek legal assistance in obtaining compensation for their half of the property in the future.
The retaining spouse’s family law attorney also refused to allow a lien to be filed by the leaving spouse without assuring that title would be clear for the retaining spouse.
To appease the retaining spouse and their attorney, and to protect the non-retaining spouse, Minchella & Associates created the lien documentation needed for the property. The lien and deed documentation were recorded to prevent further confusion.
Filing a consensual lien against the property and having it legally signed by the retaining spouse will ensure all the leaving spouse will get compensated when the retaining spouse refinances the property. The lien had a time limit before the leaving spouse could affirmatively move to assure payment, so the retaining spouse was obligated to work on refinancing.
Minchella & Associates negotiated with the retaining party’s attorney to ensure both parties were content with the outcome. This allowed them to proceed with the quitclaim and deed signing, so the property could be properly divided since both parties on title have to quitclaim to the retaining party.
Following the recording of the deed, the refinancing lender was able to assure payoff of the mortgage against the property and the lien by the leaving spouse. This was the outcome both parties hoped for but were unable to obtain through a quitclaim alone.
Addressing the quitclaim deed along with filing the lien assure that the parties each got what they had agreed to in the divorce and will prevent future returns to court over the property if the non-retaining spouse fails to be paid following a quitclaim-only scenario. In the event that the retaining spouse ever wants to sell the property, title will be clear and the sale will only need to be made by the retaining party.
The Minchella & Associates Difference
Minchella & Associates, Ltd., offers over 40 years of experience in Illinois real estate law. Erica Minchella has represented thousands of home sellers and buyers, landlords and commercial and investment property owners. For more information, schedule a consultation today.