Case Law Update: Transmutations (Converting Separate Property To Community Property)

A common situation arises in Santa Barbara Divorce Law: one spouse owns a house prior to marriage and during marriage will add the spouse onto the deed. This is common when parties refinance. Typically, the loan refinancing officer will illegally give legal advice and tell you to put your spouse on the deed. Doing so may impact whether or not the property remains your separate property or is changed (transmutation) into community property. 

The Court of Appeal reversed the trial court's judgment and held that a "Trust Transfer Deed," signed by husband, granting certain real property to his wife, did not met Family Code section 852(a)'s express declaration requirement. The court held that without an express statement specifying what interest in the property was granted to wife, the reference to a "Trust Transfer" left the document's purpose ambiguous and thus rendered the purported transmutation invalid under section 852(a). The court held that the deed was fairly susceptible of at least two interpretations―the one wife proffered, whereby husband granted all of his interest in the property to her, thereby transmuting the residence into her separate property, and the one husband proffered, whereby he granted only an interest in trust to wife for the couple's estate planning purposes.

Court: California Courts of Appeal

Docket: B278316(Second Appellate District)

Opinion Date: January 18, 2019

Judge: Egerton

The take away is do not change the deed to a home owned prior to marriage without first discussing it with a Santa Barbara Divorce Lawyer. If you would like a free consultation to discuss your Santa Barbara Family Law case, call Morales Law, P.C. at (805) 422-7966

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