Hello, my name is Scott Shaw, founder and principle of Shaw Law Firm, LLC. A law firm founded in 1995. Child custody, along with divorce and other areas of family law are our only area of legal practice. We don’t accept any other types of cases. In this video I will be discussing the topic of what happens if you place your spouse’s name on your property you owned prior to marriage.
To start, unless you do something to change this, or unless lump sum alimony is awarded (see separate video) “Property that you own prior to marriage, remains your separate non-marital property, and not subject to being awarded to your spouse in a divorce. In simpler terms, you owned it before marriage, you will continue to own it after marriage; your spouse will have no interest in it.
However, it is a frequent occurrence that after marriage, a spouse, say the wife, will put her husband’s name on the title to property that the wife owned prior to marriage. She will do so with good intentions and think nothing of the legal consequences if the parties ever get a divorce. And unfortunately (or fortunately, depending on which side of the issue you are on) there are indeed major legal repercussions to this act.
In general, no matter your intent, unless there is strong evidence that placing your spouse’s name on the title to property was not meant as a gift, under Georgia law, your placing your spouse’s name on property you owned before marriage will be seen as gifting him or her the property. What this means is that you will lose your non-marital interest in the property and the entirety of the property will become marital property as if you never owned any non-marital interest in it.
It works like this: Say husband owns a house prior to marriage that has $200,000 of equity in it. Husband marries wife, and a few years into the marriage, husband puts wife on the title to the home so that they own the home jointly. Then a few years later the parties get a divorce. What is the effect of putting the wife’s name on the title?
If husband had not put his wife’s name on the title, at the divorce, the $200,000 of equity would remain his pre-marital property, and the wife would not be entitled to any of the $200,000 that Husband owned pre-maritally, nor would she be entitled to any credit given for any appreciation that may accrue over the years for this portion of the property.
However, now, the wife is entitled to 50% of the entire equity in the home, plus 50% of the appreciation on that equity (as if she to owned it prior to marriage), plus 50% of the mortgage pay down
The long and short of it, is do not place your spouse’s name on property that you owned prior to marriage without first consulting an attorney as to the legal impact this act might have. If you do not intend a gift, if you intend a transfer to protect the home from creditors, the transfer of title to your spouse can be accomplished in a way that does not potentially gift your non-marital interest, plus appreciation to a home or other asset to your spouse. Don’t assume that the intent of not making a gift, if it is uncoupled with actual evidence of the intent, will prevent your placing your spouse’s name on property from being considered a gift. Absent compelling evidence, the court will indeed treat any such transfer of title as a gift, and if so, it will produced nasty, unintended consequences for you should you ever get divorced.
Each divorce is different, and the circumstances unique, and in each divorce there are traps like this that can be taken advantage of by a divorcing spouse.
Contact us or call today to learn how Shaw Law can work with you to achieve the best outcome possible for you and your children.
Scott Shaw is founder and principle of Shaw Law Firm LLC, founded in 1995 and dedicated solely to divorce, family law and child custody matters that must be addressed and decided in the state of Georgia. Shaw Law Firm serves the greater Metro Atlanta area, particularly the counties of Fulton, Gwinnett, Cobb, Cherokee, Forsyth, Paulding, Henry, Fayette, Coweta, Newton, Walton, Bartow and Douglas. Schedule a consultation today at 770-594-8309.