Transmutation of Property in a California Divorce

In California, spouses can transmute property from one form to another. Here’s what you need to know about the transmutation of property in a California divorce.

In the event of a divorce in California, spouses keep their separate property and split their community property. California law allows for married couples to transform community property to separate property, separate property to community property, and separate property of one spouse to separate property of another spouse. However, there are restrictions on transmutations and requirements for them to be considered valid.

Community and Separate Property in California

California is known as a community property state, which means that property acquired during a marriage is presumed to be the property of both spouses. This is in contrast to separate property, which is property acquired before or after the marriage (or received by one spouse in their sole name during the marriage as a gift) and is considered solely the property of one spouse. In the event of a divorce, community property is split evenly, while separate property is retained by the spouse that owns it. This is the law of the land and generally will be followed by courts overseeing divorce proceedings. As such, the status of property as either community or separate is incredibly important when considering property division in divorce.

Transmutation of Property in California

What happens if spouses are divorcing and want the property to be divided in a different manner than the law prescribes? For instance, what if both spouses own a business, but one spouse wants to relinquish their claim to the business post-divorce? Or, what if one spouse received an inheritance, but wants to share the inheritance with the other spouse post-divorce? In cases such as these, spouses may want to transform the property from one form to another. This is known as transmutation. According to California Family Code Section 850, transmutation can take on three forms:

Transmutation of community property to separate property of either spouse
Transmutation of separate property of either spouse to community property
Transmutation of separate property of one spouse to separate property of another spouse

Requirements to Transmute Property in California

In order for spouses to transmute property from one form to another, there needs to be an express declaration in writing that is made or accepted by the spouse disadvantaged by the transmutation. There will always be a disadvantaged party because one party will always be losing either part or all of their claim to the property. Similarly, in the case of transmutation of debt, one party will always be taking on more debt than they are legally responsible for. As such, the written document must make it abundantly clear that both parties know and voluntarily consent to the transmutation of property. In general, courts will be protective of the disadvantaged party and will want to be absolutely sure that the disadvantaged party gave informed consent.

Furthermore, laws regarding fraudulent transfers apply to transmutations as well. As such, the court will seek to find out whether or not fraud or undue influence occurred. Any party advocating for the transmutation will be required to prove that fraud or undue influence did not occur.

Transmutation requirements may be fulfilled by various legal documents, including premarital agreements, postmarital agreements, contracts, titles, and more.

Ensuring that these requirements are met can be difficult, and so it is recommended that spouses considering the transmutation of property consult an attorney. Contact Her Lawyer for a free consultation with an expert property division attorney who will ensure that your needs are met.

FAQs About Transmutation of Property in a California Divorce

What is community property vs. separate property?

Community property is property acquired during a marriage and as such is owned by both spouses. Separate property is property not acquired during the marriage. Community property will be divided evenly in a divorce, while separate property will not be divided.

What is transmuting property?

Transmutation of property refers to transforming property from community property to separate property, from separate property to community property, or from separate property of one spouse to separate property of another spouse.

Why would I want to transmute property prior to divorce?

Spouses would want to transmute property prior to divorce if they wish to divide/allocate property in a manner that is different from the standard division of community property and non-division of separate property. Spouses might want to do this for a wide variety of reasons, such as if they believe the standard dividing laws would be unfair to one or both spouses.

How is property transmuted in California?

Property can be transmuted via an express written declaration that is created or accepted by the disadvantaged party. This can be accomplished through many legal documents, such as premarital agreements or contracts.

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If you or a loved one have any more questions about the transmutation of property in a California divorce, contact us. Get your free consultation with one of our California Divorce Property Division Attorneys in California today!