Full question:
My son and daughter-in-law are buying their first home under the USDA program. If my daughter-in-law signs a inter spousal transfer agreement as part of the escrow then how soon after my son owns the home can it be changed to joint tenancy?
- Category: Real Property
- Subcategory: Deeds
- Date:
- State: California
Answer:
If your daughter-in-law signed an interspousal transfer agreement, she has converted community property into separate property under California law (Cal. Fam. Code § 2580). This type of agreement is often used to avoid reassessment for tax purposes and may be necessary if one spouse has credit issues that could affect financing.
However, transferring the property back to joint tenancy could raise concerns about fraudulent conveyance and may trigger a property reassessment. Fraudulent conveyance occurs when a transfer is made with the intent to hinder or defraud creditors or without receiving equivalent value in return.
Additionally, review the loan terms carefully, as they might include a due-on-sale clause, which could require the full loan balance to be paid upon transfer. For specific guidance, it's advisable to consult a local real estate attorney who can assess the details of your situation.
Relevant California statutes include:
- § 850 Fam. Code: Allows married couples to transmute property between community and separate property.
- § 851 Fam. Code: States that transmutations are subject to laws governing fraudulent transfers.
- § 852 Fam. Code: Requires a written declaration for transmutations and specifies that they are not effective against third parties without notice.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.