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Division of Property Between Married Couples – Change of Ownership

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California has a number of rules for the division of property between married couples. Many people spend a significant portion of their adult lives married. These years often include the beginning of a career and the acquisition of significant property, such as a family home. For married couples, California has a number of legal rules that identify how your property will be treated upon death or divorce.

Separate and Community Property in California

In California, all property acquired during the course of marriage is presumed to be community property (e.g., property owned by both spouses). This differs from separate property, which includes property owned by just one spouse or the other. In some instances, couples may desire to change the character of their marital assets, from separate property to community property, or from community property to one spouse’s separate property. This process is called transmutation.

Some examples of transmutation may include:

  • Separate property to community property – A person may already own a home when a couple marries. Because that person acquired the home before marriage, the home is considered separate property. If that person wishes his or her spouse to share ownership of the home, the couple may execute a transmutation agreement, changing the home to community property.
  • Community property to separate property – A married spouse may take on extra work to earn money to buy a car for personal use. Because the car was purchased with income earned during the course of the marriage, the car will be considered community property. To characterize the car as that spouse’s separate property, the couple will need to execute a transmutation agreement.

A Written Transmutation Agreement

In many instances, California courts will require a written transmutation agreement between spouses. For example, courts may require written transmutation agreements in the transfer of corporate stocks or when one spouse gives a gift to another. The transmutation agreement may identify whether the transfer of property includes only future appreciation or whether it includes a present equitable interest in the property. To be effective, transmutation agreements must comply with complex rules and statutes, and must be made in writing. Without an effective transmutation agreement, a court may characterize certain property differently than couples intended during death or divorce.

Suspect Transactions

California courts tend to scrutinize some types of transmutations. For example, a person who transfers all of his or her community property to the separate property of a spouse in order to avoid paying debts may be liable for fraud or other types of crimes. Additionally, courts will not uphold transmutations that are the result of undue influence by one spouse over another.

Getting Legal Help in Santa Rosa California

If you have questions about the nature of property that you and/or your spouse own, do not hesitate to speak with a skilled Santa Rosa California attorney. If you have questions about transmutation agreements, or fear that you have been unjustly deprived of property rights in your marriage, Beck Law P.C. can help. The family law attorneys at Beck Law P.C. can answer your questions and help you determine the best course of action given your unique circumstances. For a consultation regarding mediation or divorce, contact Beck Law P.C. at 707-576-7175 or visit us online.

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