SELECT STATUTORY CODE GOVERNING TRANSMUTATION AGREEMENTS
California Family Code (F.C.)
Sections 850-853
Married persons are free to form TRANSMUTATION AGREEMENTS during marriage:
F.C. 850:
".....married persons may by agreement or transfer, with or without consideration, do any of the following: (a) Transmute community property to separate property of either spouse.(b) Transmute separate property of either spouse to community property. (c) Transmute separate property of one spouse to separate property of the other spouse."Transmutation agreements must be in writing.
Family Code 852 (a)
"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."CASE LAW GUIDANCE : Interpreting F.C. 852 Writing Requirement
"[A] writing signed by the adversely affected spouse is not an 'express declaration' for the purposes of [Civil Code] section 5110.730 (a) [now section 852, subd. (a)] unless it contains language which expressly states that the characterization or ownership of the property is being changed." (Ibid.) [3] An "express declaration" does not require use of the terms "transmutation," "community property," "separate property," or a particular locution. (Estate of MacDonald, supra, 51 Cal.3d 262, 273.) For example, the language "I give to the account holder any interest I have in the funds deposited in this account," is sufficient to establish transmutation. (Ibid.) The express declaration must unambiguously indicate a change in character or ownership of property. (In re Marriage of Koester (1999) 73 Cal.App.4th 1032, 1037, fn. 5.) A party does not "slip into a transmutation by accident."FIDUCIARY RELATIONSHIP:
Starkman (2005) 129 Cal App 4th 659 at p. 664
F.C. Section 721:
"In forming agreements between themselves, a husband and wife are subject to the general rules governing fiduciary relationships which control the actions of persons occupying confidential relations with each other."See also:
Haines (1995)33 CA 4th 277 at 293-294
RELATED BACKGROUND CASES:
McDonald (1990) 51 Cal 3d 262 @273
Starkman (2005) 129 Cal App 4th 659
Barneson (1999) 69 Cal App 4th 583
also:
Benson (2005)36 Cal 4th 1096 @1100
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NO CONSIDERATION IS REQUIRED IN A TRANSMUTATION AGREEMENT:
See:
FAMILY CODE 850
F.C. 3580 (Mutual consent of the parties is sufficient consideration.)
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SCRUTINY AND REVIEW OF MARITAL TRANSMUTATION AGREEMENTS:
THE COURT WILL APPLY SPECIAL SCRUTINY OF A MARITAL AGREEMENT WHEN ONE PARTY GAINS ADVANTAGE THROUGH THE AGREEMENTWhen it can be shown that a transmutation agreement substantially benefits one spouse over another, a presumption of undue influence will be applied IF:
The outcome can be shown to be unfair or...
there was no consideration or...
there was inadequate consideration.
The spouse who gains advantage in a transmutation agreement must show the agreement was NOT the result of fraud, undue influence, menace or duress...
"The prerequisite elements for the statutory presumption under section 721 to apply are:--------------------
(1) there exists an interspousal transaction; and
(2) one spouse has obtained an advantage over the other. (Haines (1995)33 CA 4th 277 at p. 301.) Generally, a spouse obtains an advantage if that spouse's position is improved, he or she obtains a favorable opportunity, or otherwise gains, benefits, or profits."
Mathews (2005) 133 CA 4th 624, at p. 629
We discern no incongruity between Bonds and our conclusion that a spouse is presumed to have induced a transaction through undue influence only if he or she, in the words of Family Code section 721, has obtained an "unfair advantage" from the transaction.--------------------
Burkle (2006) 139 CA 4th 712 at p. 730-732
BACKGROUND CASES & CODE: Undue Influence
Family Code: (F.C.)
F.C. Section 721
California Civil Code (C.C.):
CC 1550 (2)
CC 1565
CC 1567
Balcoff (2006) 141 CA 4th 1509 at 1523
Mathews (2005) 133 CA 4th 624
Delaney (2003) 111 CA 4th 991
Substantial evidence in the record supports the trial court's conclusion that Wife failed to bear her burden of establishing this. This evidence showed that Husband suffered cognitive impairments and as a consequence had entrusted all marital financial and legal matters to Wife, trusting and relying upon her judgment and management in this regard. Wife, on the other hand, had extensive experience in legal and financial matters, and had personal experience in her previous marriage with the transmutation of separate property to joint tenancy. Husband signed the documents conveying his unencumbered separate interest in the Property to himself and Wife jointly without questioning her instruction that it was necessary to do so. On this record, we have no basis for overturning the trial court's determination that Wife had failed to rebut the presumption of undue influence.
Delaney (2003) 111 CA 4th 991 at p. 1000
ALSO:
Haines (1995)33 CA 4th 296
Burkle (2006) 139 CA 4th 712
Also see:
Moore (1980) 28 Cal 3d 366
Marsden (1982) 130 Cal App 3d 426
Bono v. Clarke (2002) 103 Cal App. 4th 1409
Allen (2002) 96 Cal App 4th 962
Wolfe (2001) 91 Cal App 4th 962
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SCRUTINY AND REVIEW OF MARITAL TRANSMUTATION AGREEMENTS:
STANDARD CONTRACT LAW APPLICABLE:
With certain exceptions unique to family law, marital agreements are reviewed for their legal sufficiency and enforceability under contract law.
Estate of Wilson: 64 CA3d 786
'....absent a showing to the contrary, a party who has signed an agreement who holds capacity to read its contents will be bound...'
"As stated in Fowler v. Security-First Nat. Bank (1956) 146 Cal.App.2d 37, 47 [303 P.2d 565]: [8] "A contract is indeed the result of objective manifestations of the parties. If those manifestations are sufficient [to establish a contract], the parties' subjective intentions or beliefs are wholly immaterial." (See 1 Witkin, Summary of Cal. Law, Contracts, § 88, pp. 92-93.) Stated otherwise, when a person with a capacity of reading and understanding an instrument signs it, in the absence of fraud or imposition he is bound by its contents, and he is estopped from saying that its provisions are contrary to his intentions or understanding. (Palmquist v. Mercer (1954) 43 Cal.2d 92, 98. "
Estate of Wilson: 64 CA3d 786 at p. 802.
See also:
F.C. 3580 (Mutual consent of the parties is sufficient consideration.)
Chadwick v Chadwick 1928
Contract Law: California Code
CC 1550
- capacity
- consent
- lawful object
- proper consideration
Contract Law: California Code
CC 1565
- duress
- menace
- fraud
- undue influence
- mistake
SCRUTINY AND REVIEW OF MARITAL TRANSMUTATION AGREEMENTS:
MARITAL AGREEMENT can not be punitive:
MARITAL AGREEMENT A can not "penalize" one party based on "faulty" behavior within marriage. This is because California is a "no fault" divorce state.
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SCRUTINY AND REVIEW OF MARITAL TRANSMUTATION AGREEMENTS:
For Educational Purposes Only:This Page Is Not Legal Advice
