While still married, can I sell my part of joint real estate to my wife and walk away clear of any financial responsibilities?

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While still married, can I sell my part of joint real estate to my wife and walk away clear of any financial responsibilities?

Asked on November 27, 2011 under Family Law, New Jersey

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

You can certainly sell your share of any joint real estate to your wife. However, just walking away from all legal obligations may not be so easy. For example, if you own a home together and it is mortgaged in both of your names, then unless your spouse refinances or obtains a novation (i.e. lenders permission to remove your name; rarely granted), you will still bear financial responsibility for the mortgage payments.

As long as your wife keeps the mortgage current you'll have no problem but if she falls behind your credit can be adversely affected; if the mortgage goes into default and a foreclosure action ensues, you can be held liable for any deficiency (i.e. what is still owed to your lender if the property sells for less than that).

Selling the property might be best. However, in this market that is easier said then done. At this point, you should consult directly with a divorce attorney in your area as to your potential rights and/or liabilities.

Lyle Johnson / Lyle W. Johnson Attorney at Law

Answered 10 years ago | Contributor

You can sell her the joint real estate, but if your name is on the loan you will still be responsible for the loan.   The only way you can shed all responsibility is if she refinances the real estate.  You should carefully set out the terms upon which she receives the real estate.  One of the conditions should be a time limit for her to refinance the real estate.  There may also be income tax consequneces as a result of the sale. 


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