Barneson (1999) 69 Cal App 4th 583 at p. 585-586
"Robert L. Barneson (Barneson) and Evelyn Kaiser Barneson (Kaiser) were married on August 10, 1988. Barneson was 65 years old and Kaiser almost 36. At the time of the marriage, Barneson owned a multimillion-dollar stock portfolio. In November of 1989, Barneson suffered a stroke."
"Barneson signed a typed letter dated December 6, 1990, to Banker's Trust Company (Banker's Trust), referring to certain stock in Marina Oil Company, which stated as follows: "This is written instruction as per our phone conversation. I Robert L. Barneson would like to combine these (4) four stock certificates into one, I would like to transfer these same stocks into the name of Evelyn J. Kaiser. Thank you." fn. 2 ......At some point, Barneson executed an "Irrevocable Stock or Bond Power," with his signature guaranteed by an officer of Charles Schwab & Co., Inc. This form document begins with the phrase "For value received, the undersigned does (do) hereby sell, assign, and transfer unto," after which the name Evelyn Kaiser was written."
ISSUE PRESENTED IN THE CASE:
"The question in the present case is whether ..... Barneson's actions in transferring the Marina Oil stock and the securities in his Schwab account into Kaiser's name effectively transmuted the securities from his separate property into her separate property. The issue is governed by Family Code section 852, subdivision (a), which provides: "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."HOLDING: Mr. Barneson did NOT transmute the stock to his then wife, as her separate property.
FACE OF THE AGREEMENT TEST:
EVIDENTIARY FACTORS THAT MAY REBUT PRESUMED UNDUE INFLUENCE
Party seeking to overcome the presumption must establish by a preponderance of the evidence that the transmutation agreement was:
- Freely and voluntarily made;
- With full knowledge of the facts,
- With a complete understanding of the effect of the transmutation.
TEST FOR PROPER WRITING AS REQUIRED BY F.C. 852 (a), and that establishes the transferring party had a complete understanding of the effect of the transmutation:
From the face of the MARITAL AGREEMENT, is it possible to tell whether the transmuting party was "aware that the legal effect of his or her signature might be to alter the character or ownership of her interest in the property?
"MacDonald held the wife's signature on these forms was not sufficient to support a finding of transmutation: The consent paragraphs contained no language characterizing the property; it was not possible to tell from the face of the documents whether the wife was "aware that the legal effect of her signature might be to alter the character or ownership of her interest in the pension funds"; and there was no language "expressly stating that [the wife] was effecting a change in the character or ownership of her interest." (51 Cal.3d at pp. 272-273.) The MacDonald court noted that the "express declaration" requirement did not mean a writing must use any particular term (such as "transmutation," "community property" or "separate property") and suggested the document in that case would have been sufficient if it had included the additional provision " 'I give to the account holder any interest I have in the funds deposited in this account.' "EXPLICIT STATEMENT DIRECTING TRANSFER OF TITLE IS NOT FINAL AND DISPOSITIVE EVIDENCE OF INTENT TO CHANGE CHARACTER OF THE PROPERTY:
Barneson (1999) 69 Cal App 4th 583 at p. 589.
As we have discussed, the direction to "transfer" an asset into a different name does not necessarily connote an intention to change beneficial ownership.TEST FOR PROPER WRITING AS REQUIRED BY F.C. 852 (a), and that establishes the transferring party had a complete understanding of the effect of the transmutation:
Barneson (1999) 69 Cal App 4th 583 at p. 589.
MACDONALD TEST:
The MacDonald test requires a clear demonstration of a change in ownership or characterization of the property at issue. A statement placing the property as into her name "...as her sole and separate property..." is sufficient to meet the McDonald test.
We recognize that the facts before us differ from those in MacDonald and present a closer case. As in MacDonald, however, Barneson's written directions to transfer stock "contain no language which characterizes the property assertedly being transmuted" and "[i]t is not possible to tell from the face of [the documents] whether decedent was aware that the legal effect of [his] signature might be to alter the character or ownership of [his] interest in the [property]." The Supreme Court in MacDonald made very clear that it was attempting to effectuate legislative intent by creating a bright-line test for evaluation of purported transmutations. The MacDonald test is not difficult to meet: It requires only a clear demonstration of a change in ownership or characterization of the property at issue. Here, if Barneson had truly intended a transmutation, he could have added to his directions to transfer stock a sentence indicating he was giving his interest in the stocks to Kaiser; he could even have directed them transferred into her name "as her sole and separate property." In the absence of such language, the documents are not sufficient to demonstrate a transmutation under section 852, subdivision (a).
Barneson (1999) 69 Cal App 4th 583 at 594
