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California Court Rules an Interspousal Transfer Deed Changed Nature of Property

Under California law, any property obtained during a marriage is presumed to be community property. The California Family Code allows for parties to change community property to separate property in certain circumstances, however.

Recently, an appeals court in California held that an interspousal transfer grant deed contained the necessary language to constitute a transmutation of the character of marital property. If you intend to seek a divorce, you should meet with an experienced California divorce attorney to assess the nature of any property obtained by you or your spouse during the marriage.

Ownership of the Property in Question

The husband and wife married one another in January 2010. In May 2010, the wife reportedly purchased a condo. The deed from the seller allegedly transferred the condo to the wife as “a married woman as her sole and separate property.” That same month, the husband signed an interspousal transfer grant deed (ITGD) granting the condo to the wife as her sole and separate property. The money used for the down payment on the condo was from the husband’s separate bank account. The husband filed for divorce in August 2011. The wife claimed the condo was her separate property based on the ITGD. The husband insisted the condo should be his separate property, however, because he paid for the down payment.

Trial Court’s Findings Regarding the Nature of the Property

The trial judge found that because the condo was obtained during the marriage, its community property characterization was presumed. Further, he noted the condo was purchased with community funds. The judge found the ITGD did not include the required language to make it clear it was a transmutation of the property, and therefore found that the condo was community property and ordered it to be sold and the proceeds from the sale divided. The wife appealed.

Transmutation of Property

On appeal, the court noted that under the California Family Code, a transmutation of property from community to separate must be made in writing. Further, the writing must include a specific declaration of transmutation and must be consented to or accepted by the adversely affected party. Here, the court found that the deed contained the necessary words for transmutation. Specifically, the court found that the word “interspousal” implied a spouse-to-spouse transaction, and the phrase “transfer grant” indicated the granting party was transferring property out of his estate.

Additionally, the ITGD specifically stated the transfer was meant to make the condo the sole and separate property of the wife. The court explained that ITGDs do not merely reflect title, but actually convey title to a property. As such, the court found the trial court erred in determining the condo was community property.

Set Up a Consultation with a Skilled California Divorce Attorney

Determining what property constitutes marital property can be a challenging and contentious process. If you intend to seek a divorce, you should consult a divorce attorney to help you determine the nature of any property that you or your spouse own. Ethan M. Weisinger is a skilled California divorce attorney who will aggressively advocate on your behalf, to help you pursue a fair division of property. Contact Mr. Weisinger at 925-258-2020 or via our online form to set up a consultation.

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