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By Ryan C. Wood<\/a><\/p>\n\n\n\n I will be updating this article over the next few\ndays. So I listened to the oral argument\nheld before the California Supreme Court today regarding California\u2019s community\nproperty presumption versus the title presumption in the In Re Clifford Brace\ncase, Case No. S252473. All of the attorneys\ndid a wonderful job making their arguments and the various judges asked many\ninteresting questions.<\/p>\n\n\n\n I might be playing Monday morning quarterback here\nand I did not read all of the briefs, but I have read all of the various\nbankruptcy cases and the In re Marriage of Valli, Super. Ct. No. BD414038, and\nit seems so clear to me. So we have\nCalifornia Family Code Section 760 versus California Evidence Code Section 662\nwith California Family Code Section 2581 tapping in providing unequivocally that\nCalifornia Family Code Section 2581 applies for purpose of division of property\non dissolution of marriage or legal separation of the parties. <\/p>\n\n\n\n The Brace case exists because of bankruptcy and the California Supreme Court is tasked with weighing in on this issue because of bankruptcy. I simply believe that the law supports that a married couple that acquires real property during marriage in California and takes title as joint tenants have a separate property interest that is 50\/50 pursuant to Section 662 and the signed, notarized and recorded joint tenant title is a clear statement in the deed or other documentary evidence of title by which the property is acquired that the property is separate property and not community property satisfying California Code Section 2581, even though Section 2581 is only meant to applicable to dissolutions of marriage. Done. Life can go on unchanged except bankruptcy attorneys<\/a> can file a bankruptcy petition that only includes the value of the filing spouses separate property interest or their 50% interest in the real property and not 100%. Perfect. <\/p>\n\n\n\n TRANSMUTATION\nLAWS REALLY SHOULD NOT APPLY AT DEATH OF A JOINT TENANT AND THEY DO NOT. TRANSMUTATION LAWS SHOULD ALSO NOT APPLY IN A\nBANKRUPCTY PROCEEDING. TRANSMUTATION\nLAWS WERE IN FACT APPLIED IN THE VALLI CASE BECAUSE GUESS WHAT, IT WAS A\nDISSOLUTION OF MARRIAGE PROCEEDING.<\/strong><\/p>\n\n\n\n WHEN SOMEONE DIES THEY ARE NOT IN A DIVISION OF\nPROPERTY ON DISSOLUTION OF MARRIAGE OR LEGAL SEPARATION SO THE SURVING SPOUSE\nGETS THE ENTIRE PROPERTY BECAUSE LEGAL TITLE WAS HELD AS JOINT TENANTS as\nrecorded when they bought the property and one spouse dies. WHAT THEY CHOSE TO\nDO. THIS HAPPENS EVERYDAY. What is the problem then? There is none. No fight here. Oh\nby the way, what happens to the debts, credit card debts, in the name and\nsocial security number of the spouse that just died?<\/strong> Nothing happens!!! There was no probate. There was no opportunity for a claim to be\nfiled. Nothing!! Even though the debt could have been and mostly\nlike was incurred during marriage and presumptively<\/strong>\na community debt THERE IS NO LONGER ANY COMMUNITY because the spouse that had\nthe debt in their name and social security number died. A credit card company may not even know the\nperson that owes them $50,000 and died was even married. Hypothetically, but this is what happens, the\ndead spouse\u2019s interest in the $50 million house the spouses held as joint\ntenants was passed to the surviving spouse and life went on. That is it. \nDone. Bye, bye creditors of the\ndead spouse. This is not what happens in\na dissolution or divorce of course because guess what? Section 2581 and other presumptions are\napplicable. <\/p>\n\n\n\n WHEN SOMEONE FILES FOR BANKRUPTCY THEY ARE NOT IN A\nDIVISION OF PROPERTY ON DISSOLUTION OF MARRIAGE OR LEGAL SEPARATION OF THE\nPARTIES OR HYPOTHETICAL DEATH, SO IF ONLY ONE SPOUSE FILES FOR BANKRUPTCY\nPROTECTION ONLY THE FILING SPOUSE\u2019S SEPARATE PROPERTY AND ALL COMMUNITY\nPROPERTY ARE LISTED AS ASSETS SUBJECT TO ADMINISTRATION OR BECOME PART OF THE\nBANKRUPTCY ESTATE. <\/p>\n\n\n\n Oh, here is the problem. We cannot have poor people seeking the relief\nthe Bankruptcy Code provides discharging debt and moving on with life hopefully\nhappier and healthier. We have to list\nthe 100% value of their joint tenant titled property even if only one spouse\nfiles bankruptcy and should by law only\nhave to list the 50% separate property interest. If a father and daughter hold title as joint\ntenants to real property on the party that files for bankruptcy has to list\ntheir 50% interest in the real property. \n<\/p>\n\n\n\n So now we are back to the California Family Code\npresumptions screwing things up. <\/p>\n\n\n\n