In re Marriage of Benson - 36 Cal. 4th 1096, 32 Cal. Rptr. 3d 471, 116 P.3d 1152 (2005)

Rule:

Cal. Fam. Code § 852(a) provides that a "transmutation," or an interspousal transaction changing the character of community or separate property, pursuant to Cal. Fam. Code § 850, is not valid unless made in writing by an express declaration approved by the adversely affected spouse. A writing satisfies the "express declaration" requirement only if it states on its face that a change in the character or ownership of the subject property is being made. This construction of Cal. Fam. Code § 852(a) precludes the use of "extrinsic evidence" to prove that the writing effected a transmutation.

Facts:

A wife petitioned for dissolution. The husband claimed he conveyed to the wife his community property interest in their home after she orally promised to waive, in writing, her community property interest in his retirement accounts, although no such writing was ever made. Notwithstanding Fam. Code, § 852, subd. (a), the trial court ruled that the husband’s performance of his part of a bargain, as evidenced by a deed he signed in the wife’s favor, served as an adequate substitute for the wife’s express written statement changing the character of the retirement accounts into his separate property. The California Court of Appeal affirmed the trial court’s judgment, adopting and applying the reasoning of the trial court. In seeking review, the wife claimed the lower courts erred in finding a valid transmutation of the husband's retirement accounts under Cal. Fam. Code § 852(a), and in denying her a community property interest in those accounts. 

Issue:

Did the lower courts err in finding a valid transmutation of the husband’s retirement accounts and in characterizing such property as separate rather than community in nature?

Answer:

Yes.

Conclusion:

The instant court held that § 852(a) did not operate like the general statute of frauds, Cal. Civ. Code § 1624(a), in which the requirement of a basic writing was subject to an implied exception for "part performance" of the contract's terms. Even assuming the husband's transfer of the deed constituted part performance of the wife's promise to transmute the retirement accounts, Cal. Fam. Code § 852(a) required the transmutation agreement to be both written and express. The statute was not satisfied because no writing existed at all. The lower courts erred in finding a valid transmutation of the husband's retirement accounts and in characterizing such property as separate rather than community in nature.