Re: Quitclaim vs. Interspousal Transfer in Community Property State

YOU SHOULD USE AN INTERSPOUSAL TRANSFER DEED IN CALIFORNIA. THE DEED SHOULD READ FROM THE TRANSFERING INDIVIDUAL, "A MARRIED MAN/WOMAN" TO THE RECEIVING INDIVIDUAL, "A MARRIED MAN/WOMAN AS HER/HIS SOLE AND SEPARATE PROPERTY".

THERE ARE SOME VERY IMPORTANT REASONS TO DO THIS, SOME BASED ON POTENTIAL INCOME TAXES ON LONG TERM CAPITAL GAINS, AND THE TRANSFER OF THE COMMUNITY BASIS IN THE PROPERTY TO THE INDIVIDUAL (I AM NOT A TAX LAWYER AND DO NOT PRESUME TO GIVE TAX ADVICE, SO THIS ISSUE SHOULD BE CHECKED WITH A TAX SPECIALIST, EITHER ATTY OR CPA OR BOTH), AND BECAUSE THE INTERSPOUSAL TRANSFER DEED WAS AND IS DESIGNED FOR EXACTLY THE TYPE OF TRANSFER THAT YOU HAVE DESCRIBED.

THE TRANSFER OF EITHER A COMMUNITY PROPERTY REAL PROPERTY ASSET, OR A QUASI-COMMUNITY PROPERTY REAL PROPERTY ASSET, WHILE YOU ARE STILL MARRIED TO ONE OF THE SPOUSES AS THEIR SOLE AND SEPARATE PROPERTY. (THUS THE DESSCRIPTION "INTERSPOUSAL").

YOU WILL HAVE THEN CREATED A REAL PROPERTY ASSET WHICH IS OWNED BY THE RECEIVER SPOUSE SEPARATE AND APART FROM ANY CLAIM OF A COMMUNITY INTEREST OR SEPARATE PROPERTY INTEREST BY THE TRANSFERING SPOUSE.

CAVEAT: COMMUNITY REAL PROPERTY AND SEPARATE REAL PROPERTY, ARE ALL ABSTRACT LEGALLY DEFINED TERMS OF ART. THE CHARACTORIZATION OF A PROPERTY AS COMMUNITY OR SEPARTE IS DEFINED SPECIFICALLY BY STATUTE, AND THE COURT CASES DEFINING THOSE STATUTES IN CALIFORNIA.

YOU MUST ALSO REMEMBER THAT SEPARATE PROPERTY CAN BE TRANSMUTED BY SPECIFIC ACTS OF THE PARTIES WHILE MARRIED, AS WELL AS BY THE FAILURE OF THE OWNER TO MAINTAIN THE INDENTITY OF THE REAL PROPERTY AS A "SEPARATE" OF THE INDIVIDUAL.

THUS, EVEN AFTER THE TRANSFER OF THE PROPERTY VIA THE "INTERSPOUSAL TRANSFER DEED", WHILE THE PARTIES REMAIN MARRIED, IF COMMUNITY INCOME OR SAVINGS ARE THEN USED TO PAY THE MORTGAGE, MAINTAIN THE PROPERTY, REMODEL OR IMPROVE THE PROPERTY, OR ARE CONTRIBUTED OTHERWISE OR INVESTED IN THE REAL PROPERTY, YOU MAY CREATE THE BASIS FOR A CLAIM OF A COMMUNITY PROPERTY INTEREST IN AN ASSET THAT IS PRESUMPTIVELY "SEPARATE PROPERTY".