Q & A | If a person owns separate property, what, if anything, is needed for title insuring purposes from the spouse when the property is being sold or when insuring a lien securing a loan?

Q:  If a person owns separate property, what, if anything, is needed for title insuring purposes from the spouse when the property is being sold or when insuring a lien securing a loan?

A:  Keep in mind that only one spouse’s name on the deed does not automatically create separate property. In states with community property laws, property acquired while married is presumed to be community property and the spouse whose name does not appear on the deed is needed to ratify and affirm the separate property characteristics of the property. Ratification and affirmation is also required when a person is claiming the property to be that spouse’s sole and separate due to a pre-nuptial agreement.  The required ratification/affirmation could be accomplished in the following possible ways:

• For property located in Arizona: obtain a disclaimer deed or quitclaim deed from the other spouse.
• For property located in New Mexico:  The non-owning spouse is needed to ratify and verify any agreement which created the separate property, whether that be by affidavit, quitclaim, or spouse joining proforma.
• When dealing with property located in Texas, the ratification/affirmation could be obtained in conjunction with a homestead affidavit.  Even if there is clear and convincing evidence that it is the separate property of one spouse but the property is homestead, Texas law requires the non-owner spouse to be a party to the transaction to sell or encumber his or her homestead interest.  If the non-owner spouse affirms that the property is the separate property of the other spouse and affirms it is not homestead, the spouse whose name is showing in the vesting deed may deal with the property without any necessary joinder by the non-owner spouse with no homestead interest.
• Pre-nuptial agreements may create extra risk to the title company so if a person has stated he/she holds sole and separate property and the spouse is not to be involved in the transaction, please do not hesitate to contact Underwriting Counsel to discuss.