When a couple divorces, California family courts must determine what is community property and what is separate property before proceeding with the property division process. Marital or community property is usually the assets and debts the couple acquired together during the marriage. Separate property is comprised of debts and assets acquired outside of the marriage (before marriage or after separation, etc.).
You may have already heard about the commingling of funds in a marriage. This occurs when either spouse combines his or her separate property with marital property. For example, if you use money from an inheritance (which is separate property) to make mortgage payments, you have commingled your separate property with community property.
The transmutation of property is a bit more complex under California law. By definition, transmutation means property has changed in one of three ways:
— Community property is transmuted to separate property
— Separate property is to transmuted to community property
— One spouse’s separate property is transmuted to the other spouse’s separate property
This transmutation of property can occur “by agreement or transfer, with or without consideration.” However, in order for these transmutations to be valid, certain rules must be followed. Chief among these rules are the following:
— The transmutation must be in writing
— Gifts between spouses are not eligible for transmutation
— Transmutations to third parties is generally not permissible
As you can see, the transmutation of property is quite complex, especially if it becomes an issue during the division of property. The best advice for those getting a divorce in California is to acquire solid legal representation during the property division process. This ensures your separate property is duly protected throughout your divorce.
Source: Official California Legislative Information, “Family Code, Section 850-853,” accessed Nov. 10, 2016