Written by attorney Wail Sarieh

California Judgment Affecting Out-Of-State Real Property Title

Property acquired during marriage is divisible community property even though situtated in another state. [Family Code sec. 760]

It has been argued, however, that a California court's property division judgment cannot directly affect title to out-of-state real property (Fall v. Eastin (1909) 215 US 1,11-12, 30 S.Ct. 3, 7-8; Rozan v. Rozan(1957) 49 C2d 322, 330, 317 P2d 11, 15). To accommodate this limitation, the Family code proveds ground rules for effecting an overall equal division of a community estate that includes out-of-state realty Family Code Sec. 2660 as follows:

1) Preference for overall division leaving title intact: Where the community estate includes real property situated in another state, the court "shall, if possible,; effect an equal division of the overall community estate "in such a manner that it is not necessary to change the nature of the interests held" in the out-of-state realty. [Family Code Sec 2660(a); Marriage of Fink(1979) 25 Cal. 3d 877, 883-884, 160 CR 516, 519]. Thus, FC Sec 2660 envisions that, where the value other community and quasi-community property is equal to or exceeds the value of the out-of-state real property, the out-of-state realty should be awarded to the spouse holding record title with an equalizing share of the balance of the community estate to the other spouse. [Marriage of Fink, supra, 25 C3d at 884, 160 CR at 519, fn.5]

2) Alternatives where asset distribution not feasible: If, on the other hand, the court determines that the only way to effect an overall equal division of the community estate is to transfer an interest in the out-of-state realty between the spouses, it "may do" either of the following (Family Code Sec 2660(b)).

A. Order the parties to execute the neccessary conveyances "or other actions" with respect to the out-of-state realty "as are necessary"--e.g., selling the property and dividing the proceeds (Fam.C.Sec 2660(b)(1); see Law Rev. Comm'n Comment to Family Code Sec 2660, 23 Ca.L.Rev. Comm'n Reports 1 (1193)); or

B. Award to the party who would have benefited by such conveyances or other action the money value of his or her interest in the property that would have been received had the conveyances been executed or other action taken (Family Code Sec 2660(b)(2)). [Marriage of Fink, supra, 25 C3d at 883-884, 160 CR at 519, fns. 4&5--out-of-state parcels awarded partially to H alone and partial to W alone even though not held in W's name (award of CP law practice and other personal items to H required recourse to out-of-state parcels to equalize overall division(]

In other words, Section 2660 recognized that the judgment of the court dividing property may not directly affect real property title in another state. On the other hand when the court has personal jurisdiction over both parties as the situation exist in this case, the may may order one of the parties to execute deed by acting in personam; if the person so ordered does execute the deed, it effectively conveys the interest transferred, even though executed under the threat of contempt proceedings. Fall v. Fall 75 Neb, 104, 113 N.W. 175 (1907) aff'd, Fall v. Eastin, 215 U.S. 1 (1909). Blumberg California Family Code Annotated P. 195.

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