One of the biggest aspects of a divorce, especially if the divorcing couple has accumulated plenty of property during the marriage or if they came into the marriage with lots of personal belongings, is how that property will be divided in the divorce process. Losing property that was yours before the marriage is particularly difficult to take and can come as a surprise if a court rules that it is no longer exclusively yours. On the other hand, losing property that you had built over the course of your marriage can be frustrating if you were the one pulling most of the weight during your time together with your spouse.
Even though the state of California is one of the few in the United States to use a simplified version of property distribution called community property, it does not mean that there are no complexities that need to be resolved before a court can determine who gets what after a divorce. One of the most nuanced of these issues is called transmutation.
California’s Community Property Rules
Unlike many other states, in which divorce courts look to minute details of a marriage in order to determine how best to equitably distribute the property that a married couple had accumulated during their time together, California divorce courts follow a simple rule: Presume that all marital property will be split between spouses evenly.
While it is possible to overcome this presumption, California’s rule makes property distribution much simpler in some ways. However, it still leaves open the issue of whether a particular piece of property is separate property or marital property.
The Difference Between Separate and Marital Property
In a divorce context, there are two kinds of property that you can own:
- Separate property is the stuff that you bought or obtained with money or work that was clearly your own. It is the property that you had in your possession to spend or give before you were married to someone who, arguably, enabled you to focus your time on getting that stuff. Therefore, separate property is the stuff that you brought into a marriage, and anything that you got during it, if your spouse consents to it being considered your own.
- In contrast to separate property, marital property is the stuff that you bought or obtained while you were married, or that you only managed to accumulate because of the help your spouse.
Because California divorce courts use the presumption that all of the property accumulated by either you or your spouse during your marriage is marital property, this distinction between marital and separate property suddenly becomes significantly more important to make. If something that you own is considered marital property, there will be the presumption that it will be split 50/50 with your spouse. If it is separate property, then this presumption does not hold.
Transmutation is When Property Changes from One Status to Another
The notion of transmutation makes things much more complex.
Transmutation is the process of a piece of property turning from marital property to separate property or, more commonly, from separate property into marital property.
A common example of this happening is when one spouse – say, the husband – owns a house. He then marries his wife, bringing into the marriage his own home. At this point, the house is still his separate property, and is therefore not susceptible to the presumption that it will be split equally with his wife, should they divorce.
Years later, with the marriage still going strong, the couple decides to refinance the mortgage on the husband’s home. To do this requires that both spouses sign the title to the home. Among the documents that the couple would have to sign would be one where the husband agrees to transfer the house from himself, individually, to both him and his wife, together. Now that both his and her names are on the title, the property is no longer his separate property. Instead, it is both of their property – marital property. Because it is marital property, if the couple ends up divorcing in California, then the divorce court will presume that the house is marital property and, unless sufficient evidence to overcome this presumption is presented, it will be split between the husband and wife 50/50.
How to Avoid Transmutation
Transmutation can be one of the most surprising aspects of property distribution over the course of a divorce. Many people are blind-sided when something that they owned before the marriage – sometimes even before they had met their spouse – is deemed to be marital property and will therefore be split evenly between the two of them.
Making sure that your personal property remains your own can be one of the most important things that can you can do in a divorce. However, it often takes considerable foresight to ensure that it does not happen, before it is too late to prevent it.
One way to make sure that the property that you bring into a marriage remains your own is by signing a valid prenuptial agreement. These delineate exactly what property is your own, and can be made to protect that property from transmuting into marital property.
Another way to avoid transmutation is by making sure that things you have title to, going into a marriage, do not get transferred to your spouse in writing. For property to transmute, it has to be done in writing, so making sure there is no written record of it transmuting can be a good move to make.
About the Author
Hossein Berenji is family law and “divorce attorney” in Los Angeles, CA. Mr. Berenji has over 15 years experience handling all family law related legal matters including domestic violence, divorce, child custody and support, and prenuptial agreements.