‘I was devastated by her infidelity’: I’m still on the deed of my ex-wife’s house, but our divorce decree says she gets the property. Am I sitting on a golden goose?
Dear Quentin,
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I am wondering if I am exposed or sitting on a golden goose. I am in my second marriage and own a house with my wife. We are considering doing some real-estate investments. I regularly get calls from real-estate companies in my former state of New Jersey to remind me that I am still on the deed of the house my ex-wife lives in.
When we divorced, she refinanced so I am no longer on the mortgage. Though, to my understanding, she cannot sell the house without my involvement. At the time of our divorce, I was devastated by her infidelity and didn’t put up much of a fight and we didn’t get lawyers to hash out the specifics, so the terms of the divorce are somewhat ambiguous.
I just signed a document she presented to me, which she had typed up. It said that she would “retain complete rights of title and ownership to the property.” It also said that the “defendant (me) shall be removed from the deed of the property through the execution of the refinance.” That never happened.
If she were to fall on hard times and was unable to continue paying the mortgage, what would my exposure be to this home? If she were to pass away, could her daughters inherit it? Conversely, if I wanted to get my name off of the deed could I leverage my “ownership” to demand an equitable return on the investment?
She has been living there since 2013 and we only cohabited for two years as I have been out of the house since 2015. Our divorce was finalized in 2016 and it took her some time to refinance. I harbor no ill will toward her and I’m not looking to extort her, I just think we’re long overdue for a clean break and an end to those annoying phone calls for me to sell a property I don’t live in.
The Ex-Husband
Dear Ex-Husband,
You seem torn between what you believe is the right thing — sitting on a “golden goose” — versus not wishing to “extort” your ex-wife. Her infidelity and your acquiescing to the divorce decree presented to you by your now ex-wife, due to your wish to have the divorce done and dusted, appears to have left you with conflicted feelings about your next steps.
The current situation is not ideal for anyone, particularly your ex-wife who is paying a mortgage on a house that she still shares with you, on paper at least. Perhaps the original sin here is that you both believed that a divorce decree would, in itself, transfer ownership of the property. However, a divorce decree merely states what you agree will happen to the property.
To answer your questions in order: If she were to fall ill, she is solely responsible for the mortgage repayments, if her name alone is on the mortgage, and if the loan went into default, your ex-wife’s credit would take a hit — not yours. However, the lender could foreclose on the home and it could be sold at auction at less than the current market value.
Would her daughters inherit the house if she died? And could you use the absence of a quit claim as the claim — a formal document where you renounce ownership — as leverage (for what you see as) an equitable return? Technically, you would likely inherit the house, as the surviving co-owner, but her daughters could mount a serious legal challenge to your right of ownership.
“As to whether or not that claim would have teeth, one would need to know if that post-divorce agreement was properly executed under state law and whether or not it constitutes a proper modification, addendum or standalone contract as it relates to the initial divorce agreement,” says Alan Feigenbaum, family-law attorney at Blank Rome LLP in New York.
“If title is held in another manner, for example tenants in common, and each party has an undivided half interest, the ex-wife could not bequeath the ex-husband’s one-half interest unilaterally to her daughters. But again, the post-divorce agreement may present the daughters with a claim in this instance too,” he adds.
If your ex-wife died, the administrator of her estate could enforce the transfer “through contempt proceedings in the probate court via a breach-of-contract action in the Superior Court,” according to the law firm Burns Levinson. In a situation such as this, the ex-spouse’s right to the house is vested upon entry of the judgment of divorce granting it to her, the law firm adds.
“Divorce is complicated, and situations often arise following the death of one spouse that require careful scrutiny of the [divorce] judgment to ensure all is as ordered and intended,” it says. “A lawyer well-versed in both divorce and probate matters can help navigate these intertwining legal concepts.” Make that “lawyers.” You should both have legal representation.
As for your potential leverage: ”This would be quite difficult given the post-divorce agreement that was signed,” Feigenbaum adds. “One would need to know if the initial agreement provided that the ex-wife had the right to sell the home and retain all the proceeds. Regardless, the post-divorce agreement, assuming it’s enforceable, likely makes it materially more difficult to demand the equitable return.”
Review the original divorce decree to make sure that it was, in fact, legal and states that your wife gets the property. Assuming it’s all above board and legal, this is where the quit claim comes in; you sign it and your wife submits the newly issued deed to the city or county land records. Ideally, her lender should be privy to this transaction to avoid any unforeseen complications.
I don’t blame you for asking these questions, even if the answer is harsh or is not what you wanted to hear. The outcome of your case may also lie in the fine print of your divorce decree. But your situation is a timely reminder that badly or ambiguously worded documents and/or delays in upholding the terms of a contract can lead to legal and moral gray areas.
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