Trusts and Estates

Ca. Trs. & Estates Quarterly Volume 7, Issue 2, Summer 2001


By Marshal A. Oldman, Esq.*

The enactment of Family Code § 852(a) and the California Supreme Court case of Estate of MacDonald (1990) 51 Cal. 3d 262, by which it was applied to the post mortem passage of marital assets, have had a substantial and often unexpected impact on the passage of property at death, whether or not the property is passing through a decedent’s estate. Subsequently, a series of cases have attempted to apply these principles in various situations with somewhat differing results. Section 852(a) of the Family Code and the cases are discussed in this article. Section 852(a) was enacted in order to avoid the persistent problem of oral transmutations of property. For reasons that have been all too obvious over the years, the availability of oral transmutations of property has tempted family law litigants to raise claims that are unsupported by documentation and often difficult to believe. In any event, the Legislature understandably wanted to avoid the temptation to perjury that seemed to afflict litigants attempting to divide a marital estate in a dissolution proceeding. Paragraph (a) of Section 852 of the Family Code addressed the problem with the following language: "A transmutation of real or personal property is not valid unless made in writing by an express declaration that is made, joined in, consented to, or accepted by the spouse whose interest in the property is adversely affected."

The first case to apply Section 852(a) in the context of a decedent was Estate of MacDonald,supra. In that case, the California Supreme Court determined that a wife’s consent to a beneficiary designation for her husband’s IRA account did not have words of transmutation and therefore did not result in the loss of the wife’s community property rights in the account. Accordingly, the wife’s will was permitted to dispose of her interest in the husband’s IRA even though he was still living at the time of her death. The Court made a "bright line" rule that a written expression of the adversely affected spouse’s intent to transmute marital property was required in order to effect a change in such spouse’s rights.

Thereafter, the Legislature attempted to mitigate the effect of the Estate of MacDonald by enacting Sections 5010, et seq. of the Probate Code. In particular, § 5011 established priorities seeking to apply the rights of a contract or instrument to the devolution of property. Recognizing that expectations at death are different from those in a marital dissolution, the Legislature focused on the effect of the instrument providing for the passing of property and not on the community or separate nature of the asset(s) in question. Accordingly, a joint tenancy designation under §5011 should be sufficient to pass title to property at death by survivorship, whether the underlying property is community or separate in character.

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