Marr. of Valli
58 Cal. 4th 1396
| Cal. | 2014Background
- During a 20-year marriage, husband used community funds to buy a life insurance policy naming wife as sole owner and beneficiary, with premiums paid from community funds.
- Upon dissolution, there was dispute whether the policy was community or wife’s separate property.
- Trial court held the policy was community property and awarded it to husband with a buyout to wife of one-half the cash value.
- Court of Appeal reversed, concluding the policy was wife’s separate property under a transmutation theory.
- The majority held the life insurance policy remains community property unless a valid express written declaration under the transmutation statutes is shown.
- Transmutation law requires a writing signed by the adversely affected spouse to change the character of community property.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the life policy acquired with community funds is community property. | Valli (wife) contends policy is her separate property via title form. | Valli (husband) contends policy is community property under statutory rule for premiums paid with community funds. | Policy is community property absent express declaration. |
| Whether transmutation applies to third-party acquisitions of property during marriage. | Wife argues transactions with third parties are outside transmutation. | Husband argues transmutation statutes apply to interspousal transfers only. | Transmutation applies to third-party acquisitions as well; no exemption for third-party purchases. |
| Whether Evidence Code section 662 can override the Family Code presumptions on property characterization. | Wife relies on 662 to treat title-based ownership as controlling. | Court should apply Family Code presumptions; 662 cannot falsify the community property presumption. | 662 does not override the section 760 community property presumption. |
| Does the form-of-title presumption conflict with transmutation requirements? | Wife suggests title in her name yields separate property status. | Court should apply transmutation requirements; no conflict with 662. | Form-of-title presumption does not trump express declaration requirement; transmutation governs. |
| What is the proper interpretation of the transmutation statute (Fam. Code 850–853) in this context? | Transmutation not satisfied due to lack of express writing; policy remains community. | Transmutation intended to prevent easy oral/constructive shifts; must be written. | Transmutation requires express written declaration; policy remains community. |
Key Cases Cited
- In re Marriage of Benson, 36 Cal.4th 1096 (2005) (reaffirms presumptions and limitations of community property law)
- In re Marriage of Haines, 33 Cal.App.4th 277 (1995) (transmutation statutes and undue influence considerations)
- In re Marriage of Lucas, 27 Cal.3d 808 (1980) (joint tenancy and property characterization framework under statute)
- In re Marriage of Brooks & Robinson, 169 Cal.App.4th 176 (2008) (third-party purchase not automatically a transmutation)
- In re Marriage of Steinberger, 91 Cal.App.4th 1449 (2001) (transmutation considerations in California community property)
- In re Marriage of Cross, 94 Cal.App.4th 1143 (2001) (transmutation statutes address third-party transactions)
- Estate of MacDonald, 51 Cal.3d 262 (1990) (express declaration requirement for transmutations)
- Meyer v. Kinzer and Wife, 12 Cal. 247 (1859) (early articulation of California community property principles)
- Olson v. Olson, 4 Cal.2d 434 (1935) (early view on common law presumptions and property ownership)