The Closing Connection: more FAQs about title matters
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6/7/2009 - 6/7/09
In continuing from my previous column, here are a few more frequently asked questions and answers:
Q. What happens to the ownership of my property when my spouse/partner dies?
A. Here is where the difference in how you hold title comes into play. If you and your spouse held title as John Smith and Jane Smith, husband and wife, you held title as tenants-in-common, which does not have the right of survivorship. This means that the deceased spouse's ownership interest in the property must be probated in order to sell the property. If you held title as John Smith and Jane Smith, husband and wife, as joint tenants, you do have the right of survivorship and all that is normally required at the death of the first spouse is to have a certified copy of the death certificate recorded.
Q. I own my property in a trust. Why do I have to show a copy of my trust document at closing?
A. The title company must ensure that the trust document provides the following information: the name of the trust, the name of the trustees, the date of the trust, the powers of the trustees, and proof that the trust document was properly signed and notarized. The trust itself cannot own property. It is the trustees of the trust who own the property. This is part of the due diligence that the title company performs prior to closing to ensure that the property is properly conveyed.
Q. What is sole and separate property?
A. Here we truly enter the realm of complicated answers. New Mexico is a community property state. As such, property that is owned by a married person is considered community property, regardless of when it was purchased. Let's say you purchased your property before you got married and you decide you want to sell it. Because of the community property laws, your spouse has an interest in that property, even though your spouse's name does not appear on the deed. In order to convey (sell) the property, your spouse must either sign a sole and separate property agreement, or sign the deed. By signing a sole and separate property agreement, the parties clarify the nature of the ownership of the property. So, if the property belonged to Susie Smith, and she marries John Doe, John Doe would relinquish any and all rights to Susie Smith's property by signing the sole and separate property agreement. The sole and separate property agreement is then recorded, giving public notice. Remember that title companies search the county clerk's records for recorded documents thatr pertain to or affect the property.
If you have questions regarding title insurance and/or escrow services, please feel free to e-mail me at debora.adinolfi@stewart.com and I will be happy to answer them for you.
Deby Adinolfi (505-954-3328) is an escrow officer for Stewart Santa Fe Abstract, serving Santa Fe and Los Alamos counties. She has over 25 years of complex real-estate experience which includes, in addition to her escrow experience, working as a real-estate paralegal and working for real-estate developers.
