Legal Question in Family Law in California

Conversion of Separate Property to Community Property

My in-laws gifted my soon to be ex-husband $40,000 for the down payment on a home we were purchasing. We had been married three months at the time the money was ''gifted'' to my soon to be ex-husband. My soon to be ex-husband (STBXH)then converted that money to community property by placing the money in escrow. The property we bought is held as Mr. & Mrs !!!! as joint tenants.

The checks written by his parents are noted in the memo section as ''Gift'' payable to STBXH.

The parents are now claiming that it was a loan and want to be reimbursed when the house sells. If not then my STBXH wants full reimbursement paid to him.

Question: Does my STBXH have a right to full reimbursement of these so called ''gifts'' from the proceeds of the sale of the house? Do the in-laws have any rights to reimbursement? Are there court cases that substantiate my position that the money was converted to community property when my STBXH deposited them into escrow?

Signed - Spouses parents in control.


Asked on 2/27/02, 11:43 pm

3 Answers from Attorneys
Michael Gray Barber & Gray, LLP

Re: Conversion of Separate Property to Community Property

Ken is correct. See Family Code section 2640 for the right to reimbursement.

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Answered on 2/28/02, 9:32 am
Matthew Kremer Law Offices of Matthew M. Kremer

Re: Conversion of Separate Property to Community Property

The two prior attys are correct. FC 2640 will control this unless H signed something that expressly waived his 2640 rights (not the escrow docs, something like "I know I have a right to this money back but I want it to be shared with my W").

He is not, however, entitled to any more than the amount used for the down payment (no interest, etc) and if the net sale proceeds are less than $40K, he only gets what is there.

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Answered on 2/28/02, 11:37 am
Ken Koury Kenneth P. Koury, Esq.

Re: Conversion of Separate Property to Community Property

gifts cannot legally be taken back once accepted. the parents are out of luck. the money was NOT converted to community property by placing it in escrow. Hubby gets it back.

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Answered on 2/28/02, 12:25 am


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