Ambiguity Between A Prenup And A Will Should be Avoided

     In the unpublished opinion of  In Re Estate of Wallace, the First District Court of Appeal grappled with whether the trial court was correct in appointing a wife executor over her husband's will when their prenup agreement contained a written waiver in paragraph No. 16 of the premarital agreement that provides: "WAIVER OF RIGHTS ON DEATH OF OTHER PARTY: Each party hereby waives the right to receive any property or rights whatsoever on the death of the other, unless such right is created or affirmed by the other under a will or other written document executed after the date of the parties' marriage." However, on the same date that the husband signed the prenuptial agreement, he signed a will that nominated his spouse to be  Mary as executor and Steve Nagel as alternate or successor executor and bequeathing his estate to Mary and his children in equal shares.  

     Because this will was signed "before the marriage and the husband did not execute a subsequent will after the marriage when he died, the court had to determine whether or not the wife had waived her right to claim under the will and to be its executor. The court relied on Estate of Hammer (1993) 19 Cal.App.4th 1621, 1634, and reasoned that a testator's selection of an executor should not be annulled except on a clear showing that the best interests of the estate require it, and found that  the daughter Jennifer had "not made any showing, let alone a clear showing, that [Richard's] unambiguous intent should be disregarded or that the interests of the estate require a different executor."  The appellate court affirmed finding Appellant has not shown or explained why those findings were not supported by substantial evidence or why the trial court's ruling was an abuse of its discretion.

    Read prenups and wills carefully and ask questions if you believe something is ambiguous.  

California - Claiming a Hardship Deduction for Child Support

California recognizes that life happens and sometimes the regular guidelines for determining child support need to be modified to take into consideration a party’s extraordinary financial hardship caused by (1) extraordinary health expenses, (2) uninsured catastrophic losses, and (3) expenses related to caring for other natural or adopted children. 

Section 4070

The statutory language is found in Family Code section 4070, which states that if a parent ‘is experiencing extreme financial hardship due to justifiable expenses’ resulting from specified circumstances, the court may modify child support by allowing a deduction from the income of the party experiencing the hardship. (See also, § 4059, subd. (g).) 

Section 4071

Circumstances evidencing hardship are set out in section 4071.  Section 4071 provides in relevant part: “(a) Circumstances evidencing hardship include the following: [¶] (1) Extraordinary health expenses for which the parent is financially responsible, and uninsured catastrophic losses. [¶] (2) The minimum basic living expenses of either parent’s natural or adopted children for whom the parent has the obligation to support from other marriages or relationships who reside with the parent. 

Section 4071, subdivision (a), provides, “The court, on its own motion or on the request of a party, may allow these income deductions as necessary to accommodate these expenses
after making the deductions allowable under paragraph (1).

But Section 4071, subdivision (b), provides, “The maximum hardship deduction under paragraph (2) of subdivision (a) for each child who resides with the parent may be equal to, but shall not exceed, the support allocated each child subject to the order. For purposes of calculating this deduction, the amount of support per child established by the statewide uniform guideline shall be the total amount ordered divided by the number of children and not the amount established under paragraph (8) of subdivision (b) of Section 4055. 

Section 4072 

Hardship deductions are not automatic, but rather, they are within the discretion of the court. Section  4072.  (a), states, “ If a deduction for hardship expenses is allowed, the court shall do both of the following: 
   (1) State the reasons supporting the deduction in writing or on
the record.
   (2) Document the amount of the deduction and the underlying facts
and circumstances.
   (b) Whenever possible, the court shall specify the duration of the
deduction.”

Section 4073

Furthermore, Section 4073 states, “ The court shall be guided by the goals set forth in this
article when considering whether or not to allow a financial hardship deduction, and, if allowed, when determining the amount of the deduction. “

Sections 4074 and 4075

These hardship deductions shall apply to “Family Support” orders  [§ 4074] but not to Spousal Support orders  [§ 4075].  

What does all this mean?  

If a party seeks an extreme hardship deduction, this must be specifically requested or the court must recognize the need for this on its own motion. The party establishes the need for a hardship deduction by filing a motion to modify support and filing an Income and Expense declaration with the court, pointing out to the court how out-of-pocket expenses have increased significantly due to the financial hardship the party is experiencing. Thus, for wealthy individuals, it is unlikely that a court would find an extreme financial hardship but for Middle Class and lower wage earners, careful documentation may convince the court that an extreme financial hardship should be considered.  

But, be aware that the hardship deduction “is not a ‘foregone conclusion’ . . but depends on “the family’s income, as well as purported expenses,” bearing in mind that one’s “responsibility as a parent ‘[is] not to seek to provide less for some of his children because he had others, but to provide adequately for all of them.’” (In re Marriage of Paulin (1996) 46 Cal. App. 4th 1378, 1382.)   

Obtaining a financial hardship deduction can become complicated and may be an area where an experienced Family Law attorney can help, either by full representation or by having the lawyer prepare the documents for you or appear with you in court for one hearing only.    

Best wishes. 

copyright © 2016 Christine Esser

The information contained here is for informational purposes only and is not legal advice or a substitute for legal counsel. Online readers should not act upon this information without seeking professional counsel. Information on this blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship between you and Christine Esser. An attorney-client relationship is only established when a written retainer has been signed.

Disclosure: If you click on the Amazon link below, and buy today, we may receive a small commission that will not increase your cost of the item purchased. We have not received anything from the author or publisher for recommending these books. Thank you.

What do the terms “joint custody” and “sole legal custody” mean in California?

Here are the legal terms you need to understand if you are involved in a custody battle for your children:

 *** “‘Sole legal custody’ means that one parent shall have the right and the responsibility to make the decisions relating to the health, education, and welfare of a child.” (Fam. Code, § 3006.)

 ***“‘Joint legal custody’ means that both parents shall share the right and the responsibility to make” those decisions. (Fam. Code, § 3003.)   But joint legal custody requires the parents’ willingness to cooperate in making medical, educational, and psychological decisions.  The Court of Appeal explains that [in most circumstances, children’s best interests are served by joint legal custody, but where there is acrimony “the reality of their parents’ conflicts unavoidably hampers the realization of that goal." (In re Marriage of McLoren (1988) 202 Cal.App.3d 108, 115-116.)  

California courts look at these factors to determine the “best interests of the child”: 

(1) The age of the child. [When a child is 14 or older the court must allow the child to testify in court if the child chooses to testify but if the child is younger than 14, the court has discretion to allow the child to testify.]

 (2) The relationship of the child's parents and any other persons who may significantly affect the child's welfare. 

(3) The preference of the child, if old enough to express a meaningful preference; 

(4) The duration and adequacy of the child's current living arrangements and the desirability of maintaining continuity; 

(5) The stability of any proposed living arrangements for the child; 

(6) The motivation of the parties involved and their capacities to give the child love, affection and guidance. 

(7) The child's adjustment to the child's present home, school and community. 

(8) The capacity of each parent to allow and encourage frequent and continuing contact between the child and the other parent, including physical stress. 

(9) The capacity of each parent to cooperate in childcare. 

(10) Methods for assisting parental cooperation and resolving disputes and each parent's willingness to use these methods;

 (11) The effect on the child if one parent has sole authority over the child's upbringing; 

(12) History of Domestic Violence; and

(13) All other factors having reasonable bearing on the physical and psychological well-being of the child.

If child custody becomes a battle, it is in your best interests to retain an experienced Family Law attorney. If you cannot afford to retain a Family Law lawyer, there are services that provide limited scope representation and Family Law attorneys who will provide limited scope representation, such as preparing your court papers or appearing in court for a single hearing. Also, you can go to your local law library and seek assistance from the law librarians who can show you the forms you need for your case. Furthermore, most courts have Family Law Facilitators who can help you. 

Additionally, you may find some of the books below related to child custody helpful. Best wishes. 

Copyright @ 2016 Christine Esser 

If you click on any of the books below, you will be directed to the Amazon website. We may receive a small commission if you make a purchase that will not increase the price you pay.  We have not received anything from the author or publisher of these books for listing them here.

What Can You Do If Your Ex Repeatedly Files Motions to Modify Support Orders to Harass You?

If your ex continuously files frivolous motions to modify child support or spousal support orders you can file a motion that requests monetary sanctions.  

Sanctions under Code of Civil Procedure section 128.7 (section 128.7) may be appropriate if you can establish that the most recent motion has no merit and it was filed for an improper purpose. Section 128.7 states that attorneys and parties certify that every pleading and motion “is not being presented primarily for an improper purpose, such as to harass,” and that the allegations in the motion “have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery.” (§ 128.7, subd. (b)(1) & (3).) The primary purpose of section 128.7 is to deter filing abuses. (Musaelian v. Adams (2009) 45 Cal.4th 512, 519.) Essentially, “the statute imposes a continuing obligation on a party and counsel to insure that claims are factually and legally sound.” (Rubenstein v. Doe No. 1 (2016) 245 Cal.App.4th 1037, 1052.)

Section 128.7 “requires only that the conduct be objectively unreasonable.” (In re
Marriage of Reese & Guy (1999) 73 Cal.App.4th 1214, 1221.) Sanctions are warranted
when a pleading or motion is filed “not to assert any arguably legitimate legal right but to
frustrate and impede” the other party. (Hopkins & Carley v. Gens (2011) 200 Cal.App.4th 1401, 1422 (Hopkins.)

A support order is modifiable upon a material change of circumstances since the last order. But where there is no substantial evidence of a material change of circumstances, an order modifying a support order will be overturned for abuse of discretion. (See, In re Marriage of West (2007) 152 Cal.App.4th 240, 246.) In other words, a material change in circumstances is a proper purpose for filing a request for modification of support obligations, but where there is no material change in circumstances, sanctions may be appropriate if the motion was filed for an improper purpose, especially if there has been a succession of motions based upon the same facts that have been repeatedly rejected by the court.   

If you believe that a request for sanctions is appropriate, the motion requesting sanctions must be filed separately from other motions or requests and it must describe the specific conduct alleged to violate subdivision (b).  In other words, it must point out why the prior motion requesting a modification was not based on any new facts or changed material circumstance from the previous motion that had been rejected.  

But if the other party withdraws the offending motion or appropriately corrects it, sanctions are not warranted.  

If the court finds that sanctions are appropriate under section 128.7, the court may order your ex to pay your reasonable expenses, such as filing fees, and attorney's fees incurred in presenting or opposing the motion. Even if you are not represented by an attorney in court, if you have been hiring an attorney to prepare your court papers, you can request to be reimbursed.  Absent exceptional circumstances, a law firm is held jointly responsible for violations committed by its partners, associates, and employees under section 128.7.

This is an area where an experienced Family Law attorney can be of great assistance to you.  Good luck. 

copyright © 2016 Christine Esser

The information contained here is for informational purposes only and is not legal advice or a substitute for legal counsel. Online readers should not act upon this information without seeking professional counsel. Information on this blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship between you and Christine Esser. An attorney-client relationship is only established when a written retainer has been signed.

When Earning Capacity Changes a Court May Grant a Modification of Spousal Support in California

"Alimony is like buying hay for a dead horse."-  Groucho Marx 

Life happens. Circumstances change. Courts are aware of this and the law contemplates that even after an order for spousal support is made if the circumstances change sufficiently, the court may need to modify or terminate the order. This article addresses the law on what constitutes a change in “earning capacity” when a party seeks a modification of a spousal support order.

Family Code section 3651, subdivision (a), provides, in relevant part, that “a support order may be modified or terminated at any time as the court determines to be necessary.” It is well established that “ ‘[m]odification of spousal support, even if the prior amount is established by agreement, requires a material change of circumstances since the last order. [Citations.]’ [Citation.]” (In re Marriage of Khera and Sameer (2012) 206 Cal.App.4th 1467, 1475 (Khera).) Therefore, “ ‘[a] motion for modification of spousal support may only be granted if there has been a material change of circumstances since the last order. [Citation.] Otherwise, dissolution cases would have no finality and unhappy former spouses could bring repeated actions for modification with no burden of showing a justification to change the order. Litigants “ ‘are entitled to attempt, with some degree of certainty, to reorder their finances and life style [sic] in reliance upon the finality of the decree.’ ” [Citation.] 

Absent a change of circumstances, a motion for modification is nothing more than an impermissible collateral attack on a prior final order. [Citation.]’ [Citation.]” (Khera, supra, 206 Cal.App.4th at p. 1479.) 

A material change of circumstances “ means a reduction or increase in the supporting spouse’s ability to pay and/or an increase or decrease in the supported spouse’s needs. It includes all factors affecting need and ability to pay.” (In re Marriage of West (2007) 152 Cal.App.4th 240, 246.) The moving party has the burden of showing a material change of circumstances since the last order was made. 

“[F]or purposes of determining support, ‘earning capacity’ represents the income the spouse is reasonably capable of earning based upon the spouse’s age, health, education, marketable skills, employment history, and the availability of employment opportunities.” (In re Marriage of Simpson (1992) 4 Cal.4th 225, 234.) 

Family Code section 4320 states in pertinent part: "In ordering spousal support under this part, the court shall consider all of the following circumstances: "(a) The extent to which the earning capacity of each party is sufficient to maintain the standard of living established during the marriage, taking into account all of the following: 

"(1) The marketable skills of the supported party; the job market for those skills; the time and expenses required for the supported party to acquire the appropriate education or training to develop those skills; and the possible need for retraining or education to acquire other, more marketable skills or employment. "
(2) The extent to which the supported party's present or future earning capacity is impaired by periods of unemployment that were incurred during the marriage to permit the supported party to devote time to domestic duties.” 

Many spousal support orders contain a Gavron warning. The court in In re Marriage of Gavron (1988) 203 Cal.App.3d 705 (Gavron) states: “ ‘[T]he Legislature intended that all supported spouses who were able to do so should seek employment. It also appears the Legislature expected that courts would issue orders encouraging these spouses to seek employment and to work toward becoming self supporting.’ [Citations.]” (Id. at p. 711.) 

Here are some examples from previous cases regarding how courts have resolved whether the moving party met the burden of establishing that earning capacity has changed to modify the spousal support order: 

(1) . Passage of time when this is not addressed in the settlement agreement. “Although the passage of time may be related to a change in circumstances, it is not alone a sufficient basis for modification. [Citation.]”(In re Marriage of Gavron (1988) 203 Cal.App.3d 709, 710.) (See, e.g., In re Marriage of Jones (1990) 222 Cal.App.3d 505, 509 [marital settlement agreement provided for specific support payments for identified time periods].) 

(2)  The moving party must support the request for modification with evidence, not speculation. An allegation of changed earning capacity must be supported by evidence, not speculation. “ ‘[S]peculation or conjecture alone is not substantial evidence.’ [Citation.]” (In re Marriage of Burwell (2013) 221 Cal.App.4th 1, 25, fn. 21.) 

(3)  When the court orders a spouse to be retrained and the party fails to make a reasonable effort to get training this may be sufficient to establish a changed circumstance. In In re Marriage of Shaughnessy (2006) 139 Cal.App. 4th 1225, the trial court issued a spousal support order that specified that the wife “needs to be retrained and obtain computer skills,” based on the court’s findings that she did not possess marketable skills and had been employed as a florist during the marriage. (Id. at p. 1232.) The trial court granted the husband’s motion for a downward modification of spousal support because the evidence showed a change of circumstances justifying modification. Specifically, the court found that the wife “had done little, if anything, to obtain retraining to increase her income, and that she had not otherwise been diligent in attempting to become self-supporting.” (Id. at p. 1240.)

(4)  Evidence by a vocational expert may provide sufficient evidence of changed earning capacity.

 A vocational expert’s evaluation of the party’s earning capacity can provide sufficient evidence of an earning capacity change. (See, e.g., In re Marriage of Ackerman (2006) 146 Cal.App.4th 191, 212 [vocational examination report].) These are only a few examples. But I hope these have helped you to t;hink about the evidence you will need to provide the court to establish a change in “earning capacity.” 

In most cases, discovery will need to be conducted and in many cases a vocational expert may be needed to support an order for modification of spousal support or to contest the opposing party’s request for such an order. This is an area where an experienced Family Law attorney can be of great assistance to you. Good luck.

copyright © 2016 Christine Esser

The information contained here is for informational purposes only and is not legal advice or a substitute for legal counsel. Online readers should not act upon this information without seeking professional counsel. Information on this blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship between you and Christine Esser. An attorney-client relationship is only established when a written retainer has been signed.

Disclosure: If you click on the Amazon link below, and buy today, we may receive a small commission of about 3 percent that will not increase your cost of the item purchased.  This will be used to keep more Family Law Help CA coming your way. Thank you.



 

In re Marriage of Smith: Trial Court Did Not Err in Awarding Monetary Sanctions for Over Zealous Advocacy

In re Marriage of Smith (2015), 242 Cal. 4th  529, affirmed a trial court’s award of monetary sanctions  under Family Code sections 2030 and 271.  The trial court ordered  appellant Kierstin A. Smith (Kierstin) to pay $124,352 to claimant and respondent Cindy Smith (Cindy), and $151,967, subject to a specified offset, to respondent Mark Lee Smith (Mark). 

On appeal,  appellant contended the trial court erred by combining cost shifting pursuant to section 2030 with sanctions pursuant to section 271, making no explicit differentiation between sums awarded pursuant to each statute.  She further contends that the trial court abused its discretion in making an award under either statute. 

Facts 

Although the marriage of Mark and Kierstin dissolved in 2002,  they remained engaged in litigation regarding child custody and support, which expanded to involve Cindy, who is Mark's current wife.  In December 2008, Mark applied for post-judgment modification of child support, attorney fees, and sanctions.  In January 2010, Mark's January sought a change in child custody. In August 2012, Kierstin's applied for a modification of child support.  A trial of the substantive issues was concluded on June 27, 2013.  

The trial court findings of fact included the observations that "[Kierstin] and her counsels' zealous advocacy crossed the line and became unreasonable, unduly burdensome and at times an exercise in bad faith.  The trial court found that the underlying case was not complicated but was made complicated by the overzealous litigation on [Kierstin's] counsels' part and [Kierstin's] complete abandonment of the litigation process."  The trial court described the proceedings as a "morass of litigation, the primary purpose of which was to ruin [Cindy and Mark] financially."

The trial court further found Kierstin to have "no concern about the level of her attorney fees because her father [Robert Hemborg] was committed to paying those fees and costs whatever the amount."  The trial court noted that "Robert Hemborg testified at trial that [Kierstin] was due to inherit six (6) million dollars upon his death," and found that the amounts given to Kierstin for her fees and costs were "a loan against [Kierstin's] inheritance"; though Kierstin had reimbursed her father a "trivial" amount. 

The trial court found Kierstin's attorneys had already been paid $322,653.39, and they were owed another $19,975.50, as of July 3, 2013.  In comparison, as of that date, Mark had paid $123,257.65 to his attorneys and owed another $103,559.30.  As of June 20, 2013, Cindy had paid $54,009.06 to her attorneys and owed another $122,660.34.

Family Code Section 2030 

Section 2030 requires that the trial court "ensure that each party has access to legal representation . . . by ordering, if necessary based on the income and needs assessments, one party . . . to pay to the other party, or to the other party's attorney, whatever amount is reasonably necessary for attorney's fees and for the cost of maintaining or defending the proceeding during the pendency of the proceeding."  (§ 2030, subd. (a)(1).)  

In determining the necessity of making such an award, the trial court must determine what award would be "just and reasonable under the relative circumstances of the respective parties."  (§ 2032, subd. (a).)  The factors to be considered in determining the relative circumstances of the parties include, to the extent relevant, those used for determining spousal support, enumerated in section 4320, including the catchall "[a]ny other factors the court determines are just and equitable."  (§§ 4320, subd. (n); 2032, subd. (b).)  Payment of an award under section 2030 may be ordered "from any type of property, whether community or separate, principal or income."  (§ 2032, subd. (c).)

The trial court properly considered the funds Kierstin’s father paid to Kierstin’s attorneys on her behalf in determining the parties’ relative circumstances.   In analogous family law contexts, courts have held that “where a party receives recurring gifts of money, the trial court has discretion to consider that money as income . . . .”  (In re Marriage of Alter (2009) 171 Cal.App.4th 718, 722-723 (Alter).)  Alter specifically involved the question of whether gifts should be considered income for purposes of determining child support payments.  (Alter, supra, 171 Cal.App.4th at p. 723.)  Even if characterized as a loan, an advance against a party’s share of an expected inheritance is properly treated as a gift.  (In re Marriage of Williamson (2014) 226 Cal.App.4th 1303, 1313-1314 [discussing authority regarding advancements on inheritance].)

Although Kirsten argued that any gifts made by her father for her own attorney’s fees would not mean she would have continuing access to his funds to pay the other parties’ fees, the appellate court rejected this argument finding that “[i]t is irrelevant that there is no legal obligation on the part of the donor to continue making the gifts . . . ."  (Alter, supra, 171 Cal.App.4th at pp. 736-737.)  Thus, the appellate court found that the  trial court acted within its discretion by rejecting Kierstin's plea of poverty for purposes of apportioning the overall cost of the litigation equitably between the parties. Mark and Cindy were  awarded their costs on appeal. 

Family Code section 271

Because the court had decided the issue regarding Section 2-030 sanctions adverse to appellant,  the appellate court declined to review the section 271 sanctions issue. 


Copyright © 2015 Christine Esser The information contained here is for informational purposes only and is not legal advice or a substitute for legal counsel. Online readers should not act upon this information without seeking professional counsel. Information on this blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship between you and Christine Esser. An attorney- client relationship is only established when a written retainer has been signed. 

Disclosure; If you click on the Amazon link below you will be directed to the Amazon website. We have not received anything from the author or publisher of these books in exchange for our recommendation but we might receive a small commission if you click the link and make a purchase. Thank you.       


  

In re Marriage of Lafkas: Was Private Property Transmuted Into Community Property?

In In re Marriage of Lafkas (2015) 237 Cal.App.4th 921, the appellate court was asked to determine whether the husband’s private property had been transmuted [changed] into community property during the marriage when a new partnership agreement was formed that included the wife's name in the new partnership agreement.

The husband (John) owned one-third of a real estate partnership for several years prior to marrying his wife (Jean). During the parties' marriage, the partnership modified the partnership agreement. The modified agreement stated the names of each partner, including husband and wife as owners of a one-third interest. Jean and John filed for dissolution within a year of signing the new partnership agreement. On appeal, John contends the partnership interest is his separate property because the documents do not contain an express declaration transmuting the character of the property interest as required under Family Code section 852.  Jean asserts that the partnership interest is community property under the joint title presumption of section 2581, which provides that property acquired during marriage in joint form is presumed to be community property.

Fact Summary 

John formed a real property investment partnership with two friends in 1972. Each partner received a one-third interest. The partnership later purchased a property in Monrovia which was sufficient to meet all the property’s expenses. John was listed as an unmarried man on the statement of partnership. John married Jean in 1990. In 1995, the partnership bought a property in Riverside in a tax deferred exchange. The Riverside property’s cost exceeded the funds realized from the Monrovia sale. The partners applied for a loan to finance the balance of the purchase price. John believed Jean was required to participate in the transaction. Jean was added to the partnership as a joint holder of a one-third interest with John. The agreement was then recorded with the state. Ten months later John and Jean separated. John believed he owned one-third of the Partnership before and after the modification. John never intended to change its character.

Trial Court’s Ruling 

The trial court ruled that modification to the partnership agreement transmuted the private property into community property. The trial court pointed to language in the partnership agreement referring to the the parties as “Husband and Wife.” Using this the trial court found that under Section 852, subdivision (a), a transmutation occurred. The court also found that John did not intend to change the character of his separate property. John was ordered to pay $195,500 in attorney’s fees to Jean. John appealed.

Appellate Court Decision 

A married person may transmute the character of property from separate to community or from community to separate by agreement or transfer, with or without consideration. (§ 850.) However, the transmutation must meet statutory requirements to be valid. (In re Marriage of Haines (1995) 33 Cal.App.4th 277, 293 [39 Cal.Rptr.2d 673].) "A transmutation of real or personal property is not valid unless made in writing by an express declaration that is made, joined in, consented to, or accepted by the spouse whose interest in the property is adversely affected." (§ 852, subd. (a).) The express declaration must unambiguously indicate a change in character or ownership of property. Though no particular terminology is required [citation], the writing must reflect a transmutation on its face, and must eliminate the need to consider other evidence in divining this intent. [Citation.]" (In re Marriage of Benson (2005) 36 Cal.4th 1096, 1106-1107 [32 Cal.Rptr.3d 471, 116 P.3d 1152].) "The express declaration must unambiguously indicate a change in character or ownership of property. [Citation.] A party does not `slip into a transmutation by accident.' [Citation.]" (In re Marriage of Starkman, supra, at p. 664.)

Here, the appellate court held that the partnership agreement signed by both John and Jean did not meet that requirement. A valid transmutation requires more than simply naming one or both spouses as the owner in a title document. The court states the language used must show that the adversely affected party understood that he or she changed the character of the property. That language was not present in the subsequent partnership agreement.

Thus, for a transmutation to occur, the express language must indicate a clear understanding in writing that the character or ownership of specific property has been changed. The appellate court reversed the partnership’s community property characterization. It also reversed the fees order. The appellate court held that when the provisions of sections 2581 and 852 conflict, the transmutation requirements of section 852 must be met before the joint title presumption of section 2581 applies.

Additionally, the case was remanded for the trial court to consider whether loans used to acquire the Riverside property were made in reliance upon community assets.


copyright © 2015 Christine Esser

The information contained here is for informational purposes only and is not legal advice or a substitute for legal counsel. Online readers should not act upon this information without seeking professional counsel. Information on this blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship between you and Christine Esser. An attorney- client relationship is only established when a written retainer has been signed.

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