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Family Law

In re Marriage of Starkman, 129 Cal.App.4th 659

The California Court of Appeal, Second District, held that regardless of trust provision that stated all property transferred to the family trust is community property, husband’s transfer of separate property assets was not a gift (transmutation) to the community. In coming to this conclusion, the Appeals court said separate property transferred to a family trust was not community property because the trust lacked language indicating husband’s specific intent to change character or ownership of the contributed property.

In coming to this decision, the Court reviewed the transmutation rules. According to Family Code §850(a) transmutations must be “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.” They also considered other cases that held transmutations must contain language expressing intent to change characterization or ownership of property. Although husband transferred his separate property to the trust, he did not execute an effective transmutation. As a result, following his subsequent divorce, his separate property was not subject to the community property equal division rule.

Wills & Trusts

It has long been held that joint tenancy property includes an automatic right of survivorship. This remains true except in family court following a bifurcation of marital status. That occurs when upon request of one party, the court issues an order returning the parties back to a single status (terminating the marriage), before resolving all of the marital issues, such as division of property.

Family Code §2581 creates a presumption that joint tenancy property is community property subject to division in an action for dissolution of marriage. In light of this statute, if a party to a dissolution dies after bifurcating their marital status, but before property division issues are resolved, the surviving joint tenant (former spouse) will not inherit the property by operation of law. If that happens, the decedent’s (50%) share of the property will pass according to the terms of his/her will, trust, or to his/her heirs by intestate succession. Note, the surviving joint tenant (former spouse) is no longer considered an heir because marital status was terminated.

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