California Wife Thought Property Was Hers; Court Thought Differently
Most California family law attorneys will tell you that in the Golden State, property acquired during marriage by one of the spouses while the parties are living in California, is considered community property. Assuming that this is true (and mostly it is), there is a way to alter the title to property. (By the way, we’re mostly talking about land.) This is called “transmutation”.
Transmutation is the process of transferring community property into one’s separate property. For a valid transmutation to occur, Family Code section 852, subd., (a) requires that there must be a writing that contains an express declaration that is made, joined in, or consented to, or accepted by the spouse whose interest in the property is adversely affected. In other words, a handshake (or a kiss) won’t do.
The key word in this rule is express declaration. Courts have struggled with the meaning of an “express declaration.” However, the California Court of Appeal recently made a ruling that interprets the meaning of an express declaration very narrowly.
In a case recently decided, the Court of Appeal stated that an express declaration must contain a clear and unambiguous expression of intent to transfer an interest in the property, independent of extrinsic evidence”. (In re Marriage of Begian and Sarajian (2018) 2018 DJDAR 585.)
The parties in this case had an issue as to whether the husband’s signing a Transfer Deed was considered an express declaration that fit the clear and unambiguous standard. The Trust Transfer Deed that Husband signed stated, “FOR NO CONSIDERATION, GRANTORS ROSE SARAJIAN, a Widow, and IDA SARAJIAN and RICHARD BEGIAN, Wife and Husband, all as joint tenants, hereby GRANT to IDA SARAJIAN, the following real property”. The wife then created another Trust Transfer Deed, stating “FOR NO CONSIDERATION, GRANTOR IDA SARAJIAN, a married woman as her separate property, hereby GRANTS to Ida Sarajian, Trustee of the Ida Sarajian Separate Property Trust dated December 19, 2014, the following described real property.
The wife argued that the husband signed away his interest to the property, and thus the property became the wife’s separate property. Husband disagreed, saying that this was not a valid transmutation, and thus, he did not sign away his interest to the property.
The appeals court held that this language did not represent a valid transmutation, as it did not meet the standard of clear and unambiguous language. The reason is that the word “Trust Transfer Deed” suggested the transfer was associated with a trust. Second, the conveyance language itself failed to state what interest was being granted. The court held that there was not clear enough language as to whether the husband transferred his interest to a trust or whether he meant to transfer his interest to the wife as her separate property.
Again, the importance here is not whether the court could conclude what the intent of the transfer was, but rather, because the court could make at least two different interpretations, there was no valid transmutation. Stated differently, there was no clear and unambiguous statement.
The lesson here is that you have to say what you mean.