Disclaimer: Property ownership is a big deal! If you have questions related to a home or rental property, definitely contact a lawyer. But start by reading this post to get a sense for how the law works.
Well the long answer is “maybe”
(followed by explanation below).
The short answer is, probably “yes!”
Why can’t lawyers just say “yes” or “no?” Why does everything have to be so complicated? Well, partially because the law is not just made up of statutes of codes. We also have to consider “judge made law” – law that is created as a result of a decision a judge or panel of judges made on a particular case.
In marriage, we do all sorts of things that we wouldn’t necessarily do with a business partner. For example, we may put one spouse on the title (grant deed) to a home to avoid the mortgage company running the credit of a spouse with low credit. This doesn’t usually mean that the parties intend for the home to be the sole property of the titled spouse – rather, we make these choices to better our financial position (obtain a lower interest mortgage rate, etc.).
Sometimes, a spouse may have a more sinister motive. “If I can convince him to sign a quit claim deed, the property will be considered mine if we divorce.”
With either example above, assuming the property was purchased during the marriage, the house is most likely would be considered a joint asset. The reason for this is that in a divorce action, title is not controlling. Rather, all property purchased during the marriage is presumed to be community (i.e., joint) regardless of how title is held. It becomes the burden of the spouse who is trying to establish it as “separate” to prove that it isn’t. In fact, the law goes so far as to say that when a property purchased during the marriage is in the name of one spouse alone (and that spouse is asserting that is separate), there is a presumption of undue influence regarding the advantaged spouse that he or she must rebut.
How can the presumption of undue influence be rebutted?
Not easily. A “Post Marital” (aka transmutation) Agreement signed by both parties and voluntarily entered into may do the trick. Other than that, it is quite difficult.
These same guidelines will also apply to other types of property like an investment account, vehicle or stock portfolio.
But note: Just because a property is determined to be joint, doesn’t mean that one or both spouse’s don’t have a separate property interest in the property. For example, Family Code section 2640 allows a spouse who can trace a down payment to a separate property source to receive reimbursement for that down payment before the remaining equity in the home is divided.
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