A client called our Manhattan office last week. He and his wife co-own their brownstone, and his new business venture carries significant personal liability. “I saw something online about an ‘interspousal transfer deed’ to put the house in my wife’s name,” he said. “Can we do that here?”
Clients often encounter legal terms from other states—like Texas or California—and wonder how they apply in New York. New York does not have a specific document called an “interspousal transfer deed.” The goal, however—transferring real property between spouses—is something my firm handles routinely. We use different instruments, and the strategy behind the transfer is far more important than the document itself.
The Right Deed for the Job
To transfer property between spouses in New York, we use a standard deed. The two most common forms are the Quitclaim Deed and the Bargain and Sale Deed.
A Quitclaim Deed is the simplest. The transferring spouse (the grantor) passes whatever interest they have to the other spouse (the grantee). This deed makes no promises about the title. It says, “Whatever I own of this property, I now give to you.” For transfers between spouses with a high degree of trust, this is often sufficient.
A Bargain and Sale Deed with Covenants Against Grantor’s Acts provides more protection. Here, the grantor warrants they have not done anything to encumber the title during their ownership. It does not protect against issues that existed before the grantor took title, but it guarantees against their own actions. We typically consider this the more prudent choice, even within a marriage.
The choice of deed is procedural. The real question is strategic: why are you making the transfer?
Stewardship, Not Just Paperwork
A deed is a tool, not a strategy. The decision to move a home from joint ownership to sole ownership, or from one spouse to another, must be a deliberate act of financial and legacy stewardship. In my practice, I see a few key reasons for these transfers.
First is asset protection. For executives, surgeons, or business owners, isolating the family home from potential business creditors or lawsuits can be a powerful defensive measure. The goal is to place the asset beyond the reach of future liabilities. This must be done well in advance of any specific threat—transferring property to shield it from existing creditors can be deemed a fraudulent conveyance.
Second is long-term care or Medicaid planning. As we help families plan for the contingencies of aging, it can be advantageous to transfer the primary residence to the non-applicant spouse (the “community spouse”). This is a recognized strategy to protect the home from being counted as a resource for Medicaid eligibility, but it is governed by strict look-back periods.
Finally, a transfer may be part of a broader estate plan. It might be the first step in funding a trust, simplifying the future administration of an estate, or carrying out the terms of a prenuptial agreement. In each case, the deed is just one component of a much larger, intentional design for the family’s future.
Critical Tax and Title Considerations
Before any deed is signed, a prudent review of the financial implications is essential. Spouses often assume that because they are married, all transfers are without consequence. This is not the case.
For federal gift tax purposes, transfers between U.S. citizen spouses are generally covered by the unlimited marital deduction. You can transfer property of any value to your spouse without filing a gift tax return or paying gift tax.
The Real Property Transfer Tax (RPTT) is another matter. New York provides an exemption under New York Tax Law § 1405(b)(7) for a conveyance of real property between spouses. The deed must be prepared correctly to claim this exemption. If the property is subject to a mortgage, a portion of the transfer could be considered a sale, which may have other tax implications.
You must also review your mortgage agreement. Most mortgages contain a “due-on-sale” clause, giving the lender the right to demand full repayment if you transfer the property. The federal Garn-St Germain Depository Institutions Act of 1982 generally prohibits a lender from exercising this clause for transfers between spouses. Still, notifying the lender is a required or courteous step.
Lastly, consider title insurance. An existing policy in both names may not automatically protect the sole new owner. We often advise clients to contact their title insurance company to secure an endorsement or a new policy to ensure their claim to the property remains protected.
If you are considering retitling a home with your spouse, the first step is not to download a generic deed form. It is to schedule a confidential review of your family’s complete asset picture and long-term goals. Only then can we determine if a deed transfer is the right course of action for your legacy.
