Community Property Issue of Transmutation
Before the issue of what a transmutation is and how a quit claim or interspousal transfer deeds affect real property, there must be an understanding of community property. Simply put, anything acquired during marriage, whether they are debts or assets are community property with...
TransmutationOne legal concept used to rebut the presumption of community property for assets attained during marriage is transmutation. This is the process by which the parties change the character of a property from community to separate or vice versa. Transmutations after 1984 require a writing. It must clear that both parties are entering these agreements voluntarily, intelligently and without coercion or undue influence.
To be a valid transmutation for the purposes of a divorce, Family Code (FC) section 852, sets forth what is required in order for the transfer to be enforceable. Section 852 was enacted to require that transmutations be supported and established by some kind of written *express declaration* that is *joined in, consented to, or accepted* by the spouse whose prior interest in the property was adversely affected.
What is express declaration?Section 852 (a) states that the spouse giving up his or her rights to a property must expressly acknowledge in a declaration that they join in, consent or accept the transmutation. What this means is that in order for there to be no undue influence. This express declaration cannot be oral. It must be in writing, clear language that the spouse understands and know they have a right to the property, and knowingly giving up that right.
In order for there to be a transmutation by quitclaim deed as to real property, the deed must contain the express declaration on its face, so it is clearly noticeable and clear. A quit claim deed from two spouses into the name of one spouse with no other language supporting the transfer or stating the property is to be the separate property of the other spouse does not support transmutation.
Some examples of documents can be a post-nuptial agreements and deeds. For a deed not to be set aside, the language on the deed transferring title needs to specifically state that it is the intent of the parties to transfer a spouse*s community property interest to the other spouse as separate property. If such details are included in the deed, then it will likely satisfy the requirement under the law. If not, these financial transactions will be scrutinized very closely and likely be set aside.