Often during a marriage, the opportunity arises to purchase a house. It could be a first house, a vacation home or an investment property. It really doesn’t matter. Ordinarily, the property will be titled in the names of both spouses. The fights arise when the property is titled only in the name of one spouse.
When it comes to real property disputes, there is a presumption in the California Evidence code that the owner of legal title is presumed to be the owner of full beneficial title. This makes it difficult with persons not on title claiming ownership interests in property to prevail upon their claims in court.
But when it comes to family law cases, other presumptions apply. The general rule is that all property acquired during marriage and before separation, other than by gift or inheritance is presumptively community property. So, even if your name isn’t on title, if the property was purchased during the marriage, there is a presumption that the property is community property.
If you follow my articles, you will know that I often write about the fiduciary relationship, which exists between spouses. Our economy aside, the purchase of a home should be considered as an investment opportunity. If one spouse takes that opportunity for himself, that spouse may very well be breaching the fiduciary duty. In fact, a presumption of undue influence arises when there is a transfer between spouses where one spouse gains an advantage over another. That “inter-spousal transfer” may occur when the non-titled spouse signs a quitclaim deed, something title companies almost universally require when one spouse’s name alone appears on the title.
When this happens, the spouse whose name is on title alone must dispel this presumption of undue influence by showing that the transaction was “freely and voluntarily” entered into with full knowledge of all relevant facts and a complete understanding of the effect of the transfer. If this burden is not met, guess what happens? The spouse not appearing on title can win by obtaining a set aside of the transaction or by having the Court order her name added to the title. The lesson to be learned is that this “fiduciary duty thing” should not be taken lightly.
For all of your family law needs, contact the Law Offices of Richard A. Marcus 661-257-8877.