“[U]ntangling a ‘snarl of conflicting presumptions,’ ” the Supreme Court in In re Brace today holds that when a married couple buys real property with community funds and takes title as joint tenants, a Family Code presumption that the property is the community’s prevails over an Evidence Code title presumption that the spouses have separate property interests. Except the separate-property presumption applies for real estate purchased before 1975. And the community presumption is rebuttable.
The Ninth Circuit asked the court to decide the issue in a case where one spouse is in bankruptcy and deeming the real estate to be community property makes the entirety of the real estate, including the non-debtor spouse’s share, available to the bankruptcy trustee to satisfy the bankrupt spouse’s debts.
The court’s detailed, 45-page opinion by Justice Goodwin Liu finds that the history of the relevant statutes “reveals the gradual evolution of common-law separate property concepts based on form of title into a unified community property framework.”
Justice Leondra Kruger writes separately to dissent regarding the timing of that evolution. She asserts the separate-property presumption should apply to property purchased up until 1985, when the Legislature enacted new requirements for spouses who want to transmute property from community to separate, not to just pre-1975 purchases as the majority holds.
The court disapproves language in one of its 1980 opinions.
