What does the Court mean by “The Form of the Title?”
“The Form of the Title” as used in California’s Family Code and our Family Law Courts refers, quite simply, to the words on the title. If a Grant Deed says the property is held “By Husband and Wife as community property,” then that’s “the form of the title.” If a vehicle title says the vehicle is owned by “Calvin D’White Byrd,” then that is, again, “the form of the title.” (Which I shall no longer put in quotations for the rest of this discussion.)
Why is the Form of the Title Important?
For many years, the Form of the Title was losing its importance in Family Law. There’s a presumption, encoded in Evidence Code Section 662, called the Form of the Title Presumption, which provides that the character of a piece of property as separate or community property is as stated on the title to the property. That was, and still is, a rebuttable presumption, meaning it could be overcome. And for the past decade, at least, that form of the title presumption could be overcome by merely showing some property parcel or item was acquired during marriage.
But Wait! There’s More…
The Community Property Presumption, codified in Family Code Section 760, provides – rebuttably, of course – that anything acquired during the pendency of the community (date of marriage to date of separation) is presumptively community. That presumption runs head-on into the Form of the Title Presumption, when a piece of property – say, a 1973 Fastback Camaro – was acquired during marriage, but title is held in Husband’s name alone.
Now the parties are divorcing. Which presumption prevails? The Form of the Title, which would make the Camaro Husband’s separate property? Or the Community Property Presumption, which makes the Camaro community property and requires Husband to purchase Wife’s half of the Camaro from her?
And the Answer is…. It Depends.
And so it does. The state of the law on this issue has been fluctuating for quite some time. In the past decade, we have seen a couple appellate courts move away from the idea that date of acquisition trumps the title presumption – particularly where one party consented to excluding himself or herself from title. One noteworthy case coming out of the Second Appellate District actually held that Wife knew what she was doing when she signed the property over to Husband because she could read, write, and understand English. A more widely known case out of the Fourth Appellate District held that, where Wife held title to a family home purchased during marriage, the Form of the Title controlled absent a written agreement that the home was intended to be community property.
Of course, we still have case authority headed in the other direction. And there are other ways to rebut the Form of the Title: undue influence is a popular way to attack this presumption; fraud is another, where one party takes title without telling the other about acquisition, for example. There are other ways to overcome the presumption, but it’s better not to place yourself in that position.
Play It Safe.
Your best bet to avoid losing a major marital asset is, quite simply, to pay attention to the Form of the Title. If you’re married, the title should say so. If you think it’s community property, the title should reflect some type of joint ownership: community property, joint tenancy, even co-tenancy. Make sure the paperwork matches what you think the reality to be. At best, you’ll never need to address the issue. At worst? Why, at worst, you’ll lose lots and lots of money in attorneys fees at dissolution, asserting a right in community property that just didn’t seem important in the better days of your marriage.
The Names on the Title are Important.