When two people are married and buy real estate, there are incredible incentives to hold the property jointly.
Jointly held property has the right of survivorship. If one spouse dies, the entire property passes to the other spouse without the hassle of probate court.
“[A]n intrinsic feature of joint tenancy is the right of survivorship, which entitles the last surviving tenant to take the entire estate” Sathoff v. Sutterer, 869 NE 2d 354 – Ill: Appellate Court, 5th Dist. 2007
Furthermore, married people in Illinois, if they buy the home they’ll live in, they are automatically deeded the home as a tenancy by the entirety which further protects the home from creditors.
“Whenever a devise, conveyance, assignment, or other transfer of homestead property maintained or intended for maintenance as a homestead by both husband and wife together during coverture shall be made and the instrument of devise, conveyance, assignment, or transfer expressly declares that the devise or conveyance is made to persons, named and expressly identified in that instrument as husband and wife, not as joint tenants or tenants in common but as tenants by the entirety, the estate created shall be deemed to be in tenancy by the entirety.” 765 ILCS 1005/1c
Joint real estate, however, must be unwound in an Illinois divorce as the parties divided their marital property.
If one spouse transfers their interest in the property to the other spouse, they do so by preparing a quit claim deed.
What Is A Quit Claim Deed
Any transaction involving real estate must be made by a deed. A deed memorializes the transaction between the parties.
A quit claim deed is a deed that transfers ALL of one parties’ interest to another party.
“A quit claim deed conveys only the grantor’s interests in the property described therein” Hulke v. International Mfg. Co., 142 NE 2d 717 – Ill: Appellate Court, 2nd Dist. 1957
Illinois has a very specific statute that outlines what a quit claim deed must say to be effective.
“Quitclaim deeds may be, in substance, in the following form:
The grantor (here insert grantor’s name or names and place of residence), for the consideration of (here insert consideration), convey and quit claim to (here insert grantee’s name or names) all interest in the following described real estate (here insert description), situated in the County of …., in the State of Illinois.
Dated (insert date).
(signature of grantor or grantors)
The names of the parties shall be typed or printed below the signatures. Such form shall have a blank space of 3 1/2 inches by 3 1/2 inches for use by the recorder. However, the failure to comply with the requirement that the names of the parties be typed or printed below the signatures and that the form have a blank space of 3 1/2 inches by 3 1/2 inches for use by the recorder shall not affect the validity and effect of such form.
Every deed in substance in the form described in this Section, when otherwise duly executed, shall be deemed and held a good and sufficient conveyance, release and quit claim to the grantee, his heirs and assigns, in fee of all the then existing legal or equitable rights of the grantor, in the premises therein described, but shall not extend to after acquired title unless words are added expressing such intention.” 765 ILCS 5/10
When a property is held jointly, both parties convey their interest in the property to the one party who is keeping the property after the divorce.
The property’s description must be as accurate as possible for the conveyance to be effective.
“A deed speaks for itself, and its construction is dependent upon the language used. Where there is no ambiguity in the terms used, the instrument itself is the only criterion of the intention of the parties and there is no need for construction. Where, however, an uncertainty as to a description of land exists, construction serves to ascertain the intention of the parties from a consideration of the deed as a whole and from admissible extrinsic evidence of the facts and circumstances regarding the transaction keeping in mind where there is an ambiguity or question in construing a deed, it should be construed most favorably on behalf of the grantee” Roots v. Uppole, 400 NE 2d 1003 – Ill: Appellate Court, 3rd Dist. 1980 (Citations Omitted)
Upon signing the quit claim deed, the deed should be recorded with the clerk of the county the property is in.
Errors In A Quit Claim Deed In Illinois
Deeds are intimidating. The specificity of the statute can cause one to worry that a small error in recording a deed may cause their ownership of the property to be in question. In reality, errors in a deed are easy to fix under Illinois law.
If there’s some error in the description but it’s easy enough to figure out what property the deed is talking about, the error should be deemed harmless.
“The purpose of a description in the deed is to identify the particular subject matter of the grant, and, if it is possible to ascertain from the description, aided by extrinsic evidence, what property is intended, the conveyance would not be declared void” Glen View Club v. Becker, 113 Ill. App. 2d 127, 137 (Ill. App. Ct. 1969)
In fact, any mistake on a deed can be resolved by determining what the parties to the deed were really trying to do.
“It is well established that courts of equity will reform a deed upon the ground of mistake of fact, mutual and common to the parties, and in existence at the time of execution of the instrument, showing that the parties intended to say a certain thing and, by mistake, expressed another, when satisfactory evidence of mistake is presented, leaving no reasonable doubt as to the mutual intention of the parties.” Pulley v. Luttrell, 148 NE 2d 731 – Ill: Supreme Court 1958
Quit Claim Deeds During A Marriage
While quit claim deeds are inevitable in most divorces where the assets are not liquidated, quit claim deeds are also common during marriages to solemnize that property is now marital.
One party may quit claim his or her interest in a party to both parties for the purposes of obtaining joint tenancy or tenancy by the entirety and the benefits that go with those titles.
These transfers of non-marital property can later become a point of contention if the parties eventually divorce.
A quit claim deed from one spouse to another is going to look a lot like a gift…which makes a marital property non-marital.
“In Illinois there exists a presumption of gift where a transfer of property is made from one spouse to another…but the gift must be proven by clear, convincing, and unmistakable evidence to overcome the presumption that all property acquired subsequent to the marriage is marital.” In re Marriage of Weiler, 629 NE 2d 1216 – Ill: Appellate Court, 5th Dist. 1994
A quit claim deed from one spouse to both spouses to create a tenancy by entirety would be a gift to the marriage and render the non-marital property marital.
“If marital and non-marital property are commingled by one estate being contributed into the other, the following shall apply:
- If the contributed property loses its identity, the contributed property transmutes to the estate receiving the property subject to the provisions of paragraph (2) of this subsection (c).
When one estate of property makes a contribution to another estate of property, the contributing estate shall be reimbursed from the estate receiving the contribution notwithstanding any transmutation. No such reimbursement shall be made with respect to a contribution that is not traceable by clear and convincing evidence or that was a gift.” 750 ILCS 5/503(c) (emphasis mine)
Curiously, though, deeds that conveyed as gifts are deeds without consideration…which may render the deed void.
“When a conveyance is made for no or inadequate consideration, it is fraudulent in law; fraud is presumed and intent is immaterial. ( Anderson v. Ferris (1984), To prove fraud in law there must be: (1) a voluntary gift; (2) an existing or contemplated indebtedness against the donor; and (3) insufficient property retained by the donor to pay his indebtedness. Effingham State Bank v. Blades, 139 Ill. App. 3d 259, 263 (Ill. App. Ct. 1985)
“A conveyance is deemed voluntary where there is no or grossly inadequate consideration for the transfer. ” Effingham State Bank v. Blades, 139 Ill. App. 3d 259, 263 (Ill. App. Ct. 1985)
If a quit claim deed is conveyed as a gift AND there’s still a mortgage in the donor’s name…the deed may be voided.
This ambiguity is easily resolved by requiring some kind of consideration in the deed or other document. The consideration doesn’t even need to be paid as it will still be owed.
“In the absence of additional circumstances such as fraud, the failure of the grantee to pay the consideration agreed upon is not a ground for avoiding or cancelling the deed.” Goldberg v. Goldberg, 431 NE 2d 1060 – Ill: Appellate Court, 1st Dist. 1981
Finally, the donee spouse must have received a copy of the deed for the deed to be effective.
“To render a deed operative to pass title there must be not only a delivery of the deed by the grantor but also an acceptance thereof by the grantee. The acceptance of the conveyance by the grantee is as essential to the passing of the title as the delivery by the grantor, and where the acceptance is not proved and the facts do not justify the presumption of law that the grantee has accepted, the title does not pass.” Newton v. Village of Glen Ellyn, 374 Ill. 50 – 1940
To tell if a deed was received or accepted, we look to the behavior of the recipient.
“Under the circumstances of this case, her conduct in accepting the quit-claim deed, the $6,000.00 and the payment of the attorneys’ fees amounts to an acceptance of the benefits of the decree and is a release of errors.” Kissin v. Kissin, 172 NE 2d 635 – Ill: Appellate Court, 1st Dist., 2nd Div. 1961
Possession of the deed will always be enough to prove the deed was accepted.
“[T]he possession of a deed by the grantee raises a presumption that the deed was delivered, and only clear and convincing evidence can overcome that presumption.” Layton v. Layton, 5 Ill. 2d 506, 510 (Ill. 1955)
Quit Claim Deeds To Third Parties
Before or after a divorce, parties may try to move property into other people’s names to shield that property from division in divorce court.
A court can simply bring those third parties into a divorce to get the property back in the hands of the divorcing couple.
“The court may join additional parties necessary and proper for the exercise of its authority under this Act.” 750 ILCS 5/403(d)
Furthermore, the court can create a constructive trust so that the third party has to care for the property for the benefit of the divorcing couple until title is properly transferred.
“A constructive trust is created when a court declares the party in possession of wrongfully acquired property as the constructive trustee of that property, because it would be inequitable for that party to retain possession of the property” Suttles v. Vogel, 126 Ill. 2d 186, 193, 533 N.E.2d 901, 904-05 (1988).
When a party quit claims their rights to a jointly owned property to a third party, the joint aspect of the title is forever broken.
“[W]hen David S. Johnson executed a quitclaim deed purporting to be signed by both himself and the plaintiff, he did, at minimum, effectively sever the joint tenancy with the plaintiff.” Johnson v. BENEFICIAL FINANCE CO. OF ILL., INC., 506 NE 2d 1025 – Ill: Appellate Court, 2nd Dist. 1987
Additional ownership of life estates (permission to live on a property until death) will also be canceled by a quit claim deed.
“A quit-claim deed released the life estates” McCreight v. McCreight, 473 NE 2d 577 – Ill: Appellate Court, 3rd Dist. 1985
A quit claim deed to a third party implies a sale. The terms of the sale will not matter in determining who holds the property. The only thing that matters is what is written on the deed.
“[T]he doctrine of merger by deed holds that all prior agreements between a buyer and a seller are merged in the deed upon its acceptance.” Gagnon v. Schickel, 983 NE 2d 1044 – Ill: Appellate Court, 1st Dist., 1st Div. 2012 (quotations omitted)
Divorce law intersects with almost all other kinds of law…especially real estate. Your divorce lawyer should be comfortable with the law as it affects the marriage and the real estate. To learn more about your options and responsibilities as to your real estate contact my Chicago, Illinois family law firm to speak with an experienced Illinois divorce lawyer.