Acceptance of Property Rejected First Cannot be Accepted Later

Prior to the marriage of Wife [W] Husband [H], W owned her own separate property in La Mesa, California.  Sometime before 2006, W transmuted (transferred) the property into both H’s and W’s community property, so she could get a lower interest rate on a loan on the property.  In 2006, H attempted to return the inter-spousal transfer deed on the La Mesa property, because he wanted to stop all the arguing during the marriage about it.  But W refused H’s offer because she wanted everything in the marriage to be a community interest.  W never recorded the transfer deed, but placed it in a drawer.

In 2012, the marriage dissolved after W perpetrated domestic violence against H, and he was able to get a restraining order against her.  That order prevented W from returning to the family residence.  However, W violated the order and removed the 2006 deed from the family residence.  Later, in court, W admitted she did not record the deed until 2012 after she and H had separated.

In their dissolution trial, W tried to get the court to grant the La Mesa property as her separate property.  However, the court found, “The [La Mesa] property was owned by [W] prior to marriage. During marriage it was converted to a joint tenancy and refinanced and respondent was placed on the deed. Thus, under Family Code Section 2581, the home is presumed community property unless petitioner can meet the rebuttal burden… The court finds [W] did not sustain her burden of proof to rebut the presumption during the trial. [W] did not submit evidence sufficient to sustain her burden of proof to show a traceable Family Code Section 2640 reimbursement for the separate property contribution to this community asset.”

W appealed stating the court abused its discretion in not finding the La Mesa property was her separate property and not a community asset.

The Appellate Court agreed with the trial court:

“[w]e see no reason why a ‘transfer’ utilized to effectuate a transmutation of the characterization of property between spouses should be interpreted in such a way as to grant a spouse unilateral authority to transfer an interest in real property—a power that would be greater than the power of any other donor to transfer property by way of a deed or similar conveyance instrument. It is clear that with respect to gifts of both real and personal property, generally, a donee’s acceptance of a gift is essential for the completion of that gift.”

In other words, without the acceptance of the recipient, there is no transfer of ownership.  Since the trial court found that W did not accept the transfer of transmutation (changing) from community property to her sole property at the time of attempted conveyance, no transfer took place.  She could not change her mind later.

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