Q. If I put my wife on TITLE to my RESIDENCE does she get half if we DIVORCE?
A. If you place your wife on title for any reason you run the risk that
in the event of later divorce she will have some claim to the house, but
not necessarily half.
Your question deals with the law of "transmutations"; a transmutation
is a change in the character of property from separate to community property,
or could include a change from community to separate property. These are complicated issues and very fact specific, so each situation
(even each transaction) must be analyzed separately.
Whenever you change the form of title to a type of property that has titles
(i.e., real property, automobiles, bank accounts) to add a person you
run the risk of inadvertently transmuting the character of the property.
People rarely intend this, but it happens quite commonly.
However, when an interspousal transfer unfairly advantages one spouse,
there is a presumption that the transaction was induced by undue influence;
however, this presumption may not apply if both parties ertr advantaged
by the transaction.
Marriage of Burkle (2006) 139 Cal.App.4th 712. It is the burden of proof of the party who
was advantaged to show that the disadvantaged spouse's action was
freely and voluntarily made, with full knowledge of all the facts, and
with a complete understanding of the effect of the transaction.
Marriage of Matthews (2005) 133 Cal.App.4th 624.
Where a valid transmutation occurs (and deed transfers are presumptively
valid), there still remains what is known as a
Family Code section 2640 tracing right of reimbursement. This is a continuing separate property
interest that belongs to you - assuming you do not and did not waive that
reimbursement in clear separate writing. This is the separate property
equity that exists as of the date of the new deed, into the future.
So, assuming on the date of marriage you place the home you received in
your last divorce (btw, why are you getting remarried without a premarital
agreement?) into joint tenancy with wife number 2. On that date the equity
in that home is 100% yours and there is no Moore-Marsden effect to consider.
Say you have $100,000 in equity.
In this simple example, absent a new transaction or a later refinance,
you will continue to have a $100,000 separate property reimbursement claim
in your home for all time, and in the event of a subsequent divorce, assuming
at the time of the divorce sufficient evidence exists that allows you
to prove the $100,000. That will typically simply consist of your mortgage
balance on that date, and your testimony as to the fair market value of
the property on that date (or an expert's opinion of value), with
the difference being your 2640 reimbursement. You do not receive interest
on that, but it does come "off the top" before the remaining
equity - which would now be all community, is divided. The difference
to note here is that if you had not deeded the property, it would remain
your separate property subject to a Moore-Marsden reimbursement to community
which usually is going to be smaller than the reverse situation.
To read more about how the law affects division of your home or other property,
follow this link.
Thurman W. Arnold III, C.F.L.S.