You can comingle your marital assets, and there are a variety of good reasons to do so. But if you do, they're community property. And that matters -- a lot -- in a divorce.
That's the principal message of this short-and-sweet opinion by Justice Perren. I especially liked that Justice Perren explained the rationale of the decision with a very good quote from the trial court, Commissioner Patrick Perry (in San Luis Obispo). Commissioner Perry said:
"As the trial judge stated: "Husband argues that the transmutation was limited to estate purposes only. In other words, Frank wishes to have his cake and eat it too. He argues that, in the event of either his or Barbara's death, the survivor would be able to use the Transmutation Agreement to claim the property as community property, thus obtaining a full step up in basis to the fair market value of the property at date of death, while at the same time denying the validity of the Transmutation Agreement as an instrument which created community property. Thus, when it would benefit either Frank or his estate, Frank wishes to characterize the property as community. However, when it would be detrimental to Frank, he wishes to ignore the transmutation and call the property separate."
When the lower court explains its rationale in a way that's persuasive, I like it when the Court of Appeal gives credit where credit is due.
