Determining the Character of Interspousal Gifts
Generally, all property acquired during marriage by either spouse while domiciled in California is community property.”[i] However, spouses may transmute (change the character of) community property to make it the separate property of either spouse.”[ii] As discussed in a prior blog post, transmutations require a writing with an express declaration re intent to transmute the property joined in by the spouse whose interest in the property is adversely affected.[iii]
Gifts and Family Code section 852
However, an exception to the writing requirement for transmutations exists for certain types of interspousal gifts. Family Code section 852, subdivision (c) states: “This section does not apply to a gift between the spouses of clothing, wearing apparel, jewelry, or other tangible articles of a personal nature that is used solely or principally by the spouse to whom the gift is made and that is not substantial in value taking into account the circumstances of the marriage.”
Thus, absent a writing, a gift from one spouse to another is transmuted to the recipient spouse as his or her separate property only if the gift is (1) clothing, wearing apparel, jewelry, or other tangible article of a personal nature and (2) is not substantial in value.
Tangible Article of Personal Nature
Clothing, wearing apparel, and jewelry are terms that are relatively easy to interpret. “Tangible article of a personal nature,” however, is more ambiguous. A 2009 case[iv] explored the meaning of “tangible article of personal nature.”
In that case, the husband purchased a Porsche using a check drawn on his wife’s bank account, which held funds derived from the sale of the wife’s separate property residence. The purchase price for the Porsche was approximately $60,000. The husband considered the Porsche to be a gift from his wife, as it was bought shortly before his birthday.
The parties did not create a writing to transmute the car to the husband’s separate property. Thus, the question was whether the car fell into the interspousal gift exception to the writing requirement for a transmutation.
The Court of Appeal found that a car is not a tangible article of a personal nature pursuant to the Family Code’s provision re interspousal gifts. The Court explained, “Based on this legislative history, we conclude that the gift of an automobile does not fall within the exception set forth in section 852, subdivision (c) because it is not a ‘tangible article of a personal nature.’”
Substantial in Value
In 2001, a Court of Appeal case[v] grappled with the issue of “substantial in value.” In that case, about five years after the marriage the parties bought a loose diamond with community funds. The husband later set it in a ring and presented it to his wife after their fifth anniversary. The wife testified that she considered it a gift. It was a woman’s ring and only she had worn it since receipt.
While the ring was certainly “jewelry,” an item specifically listed in the “clothing, wearing apparel, jewelry, or other tangible article of a personal nature” exception found in the Family Code, the Court needed to ascertain whether it was still an exception it given it was substantial in value.
Ultimately, the Court found: “In light of the Legislature’s decision and the clear language of the statute, it would be inappropriate to hold that a transmutation of jewelry that was substantial in value taking into account the circumstances of the marriage occurred here without the writing required by section 852.” The Court concluded that Pursuant to Family Code section 852, the ring should be considered community property.
[i] Family Code § 760.
[ii] Family Code § 850, subd. (a).
[iii] See blog post no. 15.
[iv] In re Marriage of Buie & Neighbors (2009) 179 Cal. App. 4th 1170.
[v] In re Marriage of Steinberger (2001) 111 Cal. Rptr. 2d 521.