Court Opinion

ID: 4550675
Source: CourtListenerOpinion
Date Created: 2020-07-23 17:02:06.954427+00
Date Added: 2024-06-11T13:00:40.989239
License: Public Domain

IN THE SUPREME COURT OF
               CALIFORNIA

        In re CLIFFORD ALLEN BRACE, JR., Debtor

   STEVEN M. SPEIER, as Trustee in Bankruptcy, etc.,
              Plaintiff and Respondent,
                           v.
CLIFFORD ALLEN BRACE, JR., Individually and as Trustee,
                      etc., et al.,
             Defendants and Appellants.

                           S252473

                        Ninth Circuit
                          17-60032

    Bankruptcy Court for the Central District of California
                     6:11-bk-26154-SY

                         July 23, 2020

Justice Liu authored the opinion of the court, in which Chief
Justice Cantil-Sakauye and Justices Chin, Corrigan, Cuéllar,
and Groban concurred.

Justice Kruger filed a concurring and dissenting opinion.
                          In re BRACE
                            S252473

                 Opinion of the Court by Liu, J.

      Many married couples in our state use community funds
to acquire real estate and take title in joint tenancy. Does that
property presumptively belong to the community because the
couple acquired the property during marriage with community
funds? Or is the property presumptively the separate property
of the spouses because they took title in joint tenancy? The
Legislature has enacted a presumption that characterizes this
property as community in a divorce. The United States Court of
Appeals for the Ninth Circuit has asked us to determine which
presumption governs the characterization of joint tenancy
property in a dispute between a couple and the bankruptcy
trustee of one of the spouses.
       More precisely, the question here is whether the form of
title presumption set forth in Evidence Code section 662 applies
to the characterization of property in disputes between a
married couple and a bankruptcy trustee when it conflicts with
the community property presumption set forth in Family Code
section 760. (See Cal. Rules of Court, rule 8.548(f)(5) [this court
may restate a question posed to it by a court of another
jurisdiction]; see also Peabody v. Time Warner Cable, Inc. (2014)
59 Cal. 4th 662, 665, fn. 1 (Peabody) [example and explanation
of rule 8.548(f)(5) in context].) The answer determines how
much property a bankruptcy trustee can reach to satisfy a
spouse’s debts. If the property is separate, then the trustee can
only reach the debtor spouse’s 50 percent share. If the property

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                           In re BRACE
                   Opinion of the Court by Liu, J.

is community, then the trustee can reach all the property,
including the non-debtor spouse’s share.
      The issue in this case requires us to untangle a “snarl of
conflicting presumptions” (Estate of Luke (1987) 194 Cal. App. 3d
1006, 1010) in the evolution of California’s treatment of joint
tenancies alongside the development of our community property
system. Ultimately, we hold that Evidence Code section 662
does not apply when it conflicts with the Family Code section
760 community property presumption. Further, we hold that
when a married couple uses community funds to acquire
property with joint tenancy title on or after January 1, 1975, the
property is presumptively community property under Family
Code section 760 in a dispute between the couple and a
bankruptcy trustee. For property purchased before January 1,
1975, the Legislature left intact a presumption that separate
property interests arise from joint tenancy title.
       Because these presumptions are default rules, they are
not always conclusive. Just as the presumptions themselves
have evolved over time, the cognizable ways of rebutting the
presumptions have also evolved. We thus answer a further
question: When a married couple uses community funds to
acquire property as joint tenants, is the joint tenancy deed alone
sufficient to transmute the community character of the property
into the separate property of the spouses? Family Code section
852 provides that for property acquired on or after January 1,
1985, a transmutation “is not valid unless made in writing by
an express declaration that is made, joined in, consented to, or
accepted by the spouse whose interest in the property is
adversely affected.” (Fam. Code, § 852, subd. (a); see id.,
subd. (e).) We hold that under this rule, joint tenancy titling of
property acquired by spouses using community funds on or after
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                   Opinion of the Court by Liu, J.

January 1, 1985 is not sufficient by itself to transmute
community property into separate property. For joint tenancy
property acquired between January 1, 1975 and December 31,
1984, the act of taking title as joint tenants is, in itself,
insufficient to prove a transmutation; however, a court may
consider the manner of taking title in determining whether the
spouses had an oral agreement or common understanding.
Finally, as noted, joint tenancy property acquired with
community funds before January 1, 1975 is presumptively
separate property.
      As we elucidate below, “California’s treatment of joint
tenancies has a long and tortuous history and is still the subject
of considerable legal concern and disagreement.” (Blumberg,
Community Property in California (1987) p. 157.)              The
Legislature may wish to examine whether current statutes are
aligned with the expectations of married couples and third
parties when spouses use community funds to acquire property
as joint tenants. That said, we emphasize that nothing in our
decision today precludes spouses from holding separate property
as joint tenants or from transmuting community property into
separate property held in joint tenancy as long as the applicable
transmutation requirements are met. Nor does our opinion
disturb the operation of the right of survivorship that typically
accompanies joint tenancy title at death.
                                 I.
      This case arises from a petition under Chapter 7 of the
United States Bankruptcy Code filed by Clifford Brace in 2011.
Clifford and Ahn Brace married in 1972. Around 1977 or 1978,
the couple acquired a residence in Redlands. At some point
before Clifford Brace declared bankruptcy, the couple acquired

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                           In re BRACE
                   Opinion of the Court by Liu, J.

a rental property in San Bernardino. The Braces acquired both
properties with community funds and took title to each property
as “ ‘husband and wife as joint tenants.’ ” (In re Brace (9th Cir.
2018) 908 F.3d 531, 534.)
      A Chapter 7 bankruptcy petition creates an estate to
satisfy creditors’ claims. The estate generally includes “[a]ll
interests of the debtor and the debtor’s spouse in community
property” at the time the bankruptcy case is filed. (11 U.S.C.
§ 541(a)(2).) The Bankruptcy Code specifies that community
property is part of the estate; bankruptcy courts look to state
law to determine what property counts as community property.
(See Butner v. United States (1979) 440 U.S. 48, 54.)
      The bankruptcy trustee in this case sought a declaration
that the Redlands and San Bernardino properties are
community property under Family Code section 760. The
distinction between community and separate property matters
because Ahn Brace has not joined in her husband’s bankruptcy
petition. If the properties are community, then the entirety of
the Braces’ interests in the properties becomes part of Clifford
Brace’s bankruptcy estate. If the properties are separate, then
only Clifford Brace’s one-half property interest becomes part of
the estate. (In re Reed (9th Cir. 1991) 940 F.2d 1317, 1332; see
Code Civ. Proc., § 704.820.)
      The bankruptcy court found that “ ‘the properties were
acquired by [Clifford and Ahn] Brace during the marriage with
community assets and they presumptively constitute
community property under applicable law. Defendants failed to
establish that the . . . [p]ropert[ies] were not community in
nature and, therefore, they constitute property of the
Estate. . . .’ ” (In re Brace (Bankr. 9th Cir. 2017) 566 B.R. 13,

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                            In re BRACE
                    Opinion of the Court by Liu, J.

17.) The Ninth Circuit Bankruptcy Appellate Panel affirmed.
(Id. at p. 16.) Citing In re Marriage of Valli (2014) 58 Cal. 4th
1396 (Valli), which held that property acquired during marriage
from a third party with community funds is community property
upon divorce unless the statutory transmutation requirements
have been met, the panel reasoned that public policy and
statutory construction support the extension of Valli’s holding
to the bankruptcy context. (In re Brace, supra, 566 B.R. at
pp. 21–27.) The Braces appealed to the Ninth Circuit, which
certified the question to this court. (In re Brace, supra, 908 F.3d
at p. 535.)
                                 II.
      A central point of disagreement between the parties
concerns the applicability of two statutes: Family Code section
760 and Evidence Code section 662. Beginning with the text of
these statutes, we explain the nature of the dispute.
      Family Code section 760 provides: “Except as otherwise
provided by statute, all property, real or personal, wherever
situated, acquired by a married person during the marriage
while domiciled in this state is community property.” As Justice
Chin explained in Valli, “[t]he presumption, . . . that property
acquired during the marriage is community, is perhaps the most
fundamental principle of California’s community property law,”
reflecting the “ ‘general theory . . . that the husband and wife
form a sort of partnership, and that property acquired during
the marriage by the labor or skill of either belongs to both.’ ”
(Valli, supra, 58 Cal.4th at pp. 1408–1409 (conc. opn. of Chin,
J.).)
     Statutory exceptions to the community property
presumption explicitly provide for separate property treatment.

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                           In re BRACE
                   Opinion of the Court by Liu, J.

For example, property that a person acquired before marriage is
that person’s separate property.           (Fam. Code, § 770,
subd. (a)(1).) All property acquired by a person after marriage
by gift, bequest, devise, or descent is that person’s separate
property. (Id., § 770, subd. (a)(2).) Property that is earned or
accumulated after the spouses are separated is also separate.
(Id., § 771, subd. (a).) And a spouse may rebut the Family Code
section 760 presumption by tracing the source of funds used to
acquire the property to separate property. (In re Marriage of
Lucas (1980) 27 Cal. 3d 808, 815 (Lucas).) Furthermore, for
property acquired on or after January 1, 1985, married persons
may change — i.e., transmute — the character of property from
community to separate, or vice versa, if the transmutation is
“made in writing by an express declaration that is made, joined
in, consented to, or accepted by the spouse whose interest in the
property is adversely affected.” (Fam. Code, § 852, subd. (a); see
id., subd. (e).)
      In 1965, the Legislature enacted Evidence Code section
662, which provides: “The owner of the legal title to property is
presumed to be the owner of the full beneficial title. This
presumption may be rebutted only by clear and convincing
proof.” The purpose of this presumption “is to promote the
public policy in favor of ‘the stability of titles to property.’ ”
(Valli, supra, 58 Cal.4th at p. 1410 (conc. opn. of Chin, J.).)
      In drafting Evidence Code section 662, the Law Revision
Commission noted that the provision codifies the common law
form of title presumption. (Cal. Law Revision Com. com.,
reprinted at 29B pt. 2A West’s Ann. Evid. Code (2019 ed.) foll.
§ 662, p. 267.) But the cases cited by the Commission did not
involve the characterization of property acquired by spouses in
actions between themselves or in actions with third-party
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                           In re BRACE
                   Opinion of the Court by Liu, J.

creditors. (See Olson v. Olson (1935) 4 Cal. 2d 434, 438 [common
law form of deed presumption characterized property conveyed
by parties who were not married at the time]; Rench v.
McMullen (1947) 82 Cal. App. 2d 872, 874–875 [common law
form of title presumption not rebutted by oral evidence of
resulting trust between two business associates].) Evidence
Code section 662 does not reference the Family Code, nor does
it explicitly characterize property as separate so as to provide
an exception to Family Code section 760.
      Evidence Code section 662 is not a separate property
exception to Family Code section 760, and no party argues
otherwise. The question here is whether the form of title
presumption in Evidence Code section 662, and not the
community property presumption in Family Code section 760,
applies outside the context of marital dissolutions, specifically
in a dispute between a bankruptcy trustee and a debtor spouse.
      In Valli, we briefly addressed the intersection of the
Family Code and Evidence Code section 662. In that case, a
husband used community funds during marriage to buy a life
insurance policy that named his wife as the policy’s sole owner
and beneficiary. (Valli, supra, 58 Cal.4th at p. 1399.) Upon
dissolution of the marriage, the husband argued that “the policy
is community property because it was purchased during the
marriage with community funds,” while the wife argued that
“the policy is her separate property because husband arranged
for the policy to be put solely in her name, thereby changing the
policy’s character from community property to separate
property.” (Id. at p. 1400.) We first held that the statutory
transmutation requirements apply not only to interspousal
transactions, but also to “purchases made by one or both spouses
from a third party during the marriage” using community funds.
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                           In re BRACE
                   Opinion of the Court by Liu, J.

(Id. at p. 1405.) We then held that to the extent that “Evidence
Code section 662’s form of title presumption ever applies in
marital dissolution proceedings,” “it does not apply when it
conflicts with the transmutation statutes.” (Id. at p. 1406.) In
other words, the community character of the insurance policy
could not be altered except by “an express written declaration”
by the husband that “he gave up his community interest in the
policy bought with community funds,” as required by the
transmutation statute. (Ibid.) The fact that the insurance
policy was put in the wife’s name was not “sufficient to satisfy
the express declaration requirement”; thus, the policy was
community property. (Ibid.)
      In the case before us, the bankruptcy trustee contends
that Valli’s rule extends beyond the marital dissolution context
to preclude application of Evidence Code section 662 when it
conflicts with the Family Code section 760 presumption in a
dispute between a bankruptcy trustee and a debtor spouse. The
Braces, by contrast, argue that Family Code section 760 applies
in actions between the spouses to “protect[] the innocent spouse
from undue influence by the other spouse,” whereas Evidence
Code section 662 applies to “maintain the stability of title
outside of dissolution actions.”       Further, amici curiae
Christopher Melcher and Professor Grace Blumberg (author of
Blumberg, supra) point to a joint tenancy form of title principle
first recognized in Siberell v. Siberell (1932) 214 Cal. 767
(Siberell) that may govern characterization in certain
situations. Although caselaw has sometimes conflated Siberell
and other presumptions arising from joint title with Evidence
Code section 662 (see In re Marriage of Haines (1995)
33 Cal. App. 4th 277, 291–292 (Haines); In re Marriage of Brooks

                                 8
                           In re BRACE
                   Opinion of the Court by Liu, J.

& Robinson (2008) 169 Cal. App. 4th 176, 185–187; Estate of
Gallio (1995) 33 Cal. App. 4th 592, 597), they are in fact distinct.
      In order to understand the applicability of these various
rules, it is necessary to examine the history of the relevant
statutes and their consequences for various property ownership
arrangements. As we explain, the history reveals the gradual
evolution of common-law separate property concepts based on
form of title into a unified community property framework.
                                III.
      “In community property [s]tates, ownership turns on the
method and timing of acquisition, while the traditional view in
common-law [s]tates is that ownership depends on title.”
(Hisquierdo v. Hisquierdo (1979) 439 U.S. 572, 578.) Although
California has always been a community property state, “for
most of the state’s history California’s marital property law has
contained strong elements of a separate property system.”
(Prager, The Persistence of Separate Property Concepts in
California’s Community Property System, 1849-1975 (1976)
24 UCLA L.Rev. 1, 81.) For example, the Family Code provides
that spouses may hold property “as joint tenants or tenants in
common, or as community property, or as community property
with a right of survivorship.” (Fam. Code, § 750; see also Civ.
Code, former § 161, enacted in 1872 [“A husband and wife may
hold property as joint tenants, tenants in common, or as
community property.”].) These various forms of title give rise to
different incidents of ownership. Joint tenancy creates a right
of survivorship, whereby title passes to the surviving spouse
without going through probate. (See Siberell, supra, 214 Cal. at
p. 773.) In addition, joint tenants typically have separate
interests in the property.         (Riddle v. Harmon (1980)

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                           In re BRACE
                   Opinion of the Court by Liu, J.

102 Cal. App. 3d 524, 527 (Riddle).) This means that one joint
tenant’s interest cannot be reached by the creditors of the other
joint tenant. One joint tenant can also unilaterally sever the
joint tenancy or alienate his or her share. (Ibid.)
      Community real property, by contrast, generally cannot be
alienated by one spouse without the consent of the other spouse.
(Fam. Code, § 1102.) In addition, “the community estate is liable
for a debt incurred by either spouse before or during marriage”
except as otherwise expressly provided by statute. (Id., § 910,
subd. (a).) At death, there is no automatic right of survivorship;
half of the community property belongs to the surviving spouse,
and the other half belongs to the decedent. (Prob. Code, § 100,
subd. (a).) In the absence of a will, however, the decedent’s
share of the community property passes through intestacy to the
surviving spouse. (Id., § 6401, subd. (a).)
      The various forms in which a married couple can vest title
to property do not invariably reflect the underlying nature of the
couple’s ownership. The Braces’ situation is not uncommon:
Many couples use community funds to purchase a home and
take title as “husband and wife as joint tenants” without an
additional indication in the deed as to whether the property is
community or separate. In a 1965 Final Report on Domestic
Relations, the Assembly Interim Committee on the Judiciary
noted: “The major problem . . . is the fact that husbands and
wives take property in joint tenancy without legal counsel but
primarily because deeds prepared by real estate brokers, escrow
companies, and by title companies are usually presented to the
parties in joint tenancy form. The result is that they don’t know
what joint tenancy is, that they think it is community property,
and then find out upon death or divorce that they didn’t have
what they thought they had all along. . . .” (Assem. Interim
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                            In re BRACE
                    Opinion of the Court by Liu, J.

Com. on Judiciary, Final Rep. Relating to Domestic Relations
(Jan. 11, 1965) p. 124 (Domestic Relations).)
      This lack of clarity has created difficulties for courts
attempting to harmonize common-law presumptions based on
form of title with the statutory community property framework.
Over the years, the Legislature has “so alter[ed] the original
provisions of each of the systems as to allow them both a place
in our jurisprudence.” (Siberell, supra, 214 Cal. at p. 771.) The
evolution of various statutory presumptions is relevant to
understanding the operation of community property law as it
relates to this case.
                                  A.
      The general community property presumption in Family
Code section 760 is a product of legislative developments that
over time granted the wife an increasing role in the
management and control of community property. (See Prager,
supra, 24 UCLA L.Rev. at pp. 68, 73–74.) The Legislature first
enacted the general community property presumption in 1850.
(Stats. 1850, ch. 103, § 2, p. 254 [“All property acquired after the
marriage by either husband or wife, except such as may be
acquired by gift, bequest, devise, or descent, shall be common
property.”].) In 1872, the Legislature codified this general
community property presumption in Civil Code former section
164: “All other property acquired after marriage, by either
husband or wife, or both, is community property.” (Civ. Code,
former § 164, enacted in 1872.)            As originally enacted,
California’s community property system afforded the wife no
management or control over community property, but she was
able to control the disposition of her separate property during
marriage. (Stats. 1850, ch. 103, §§ 1, 6, 9, p. 254.)

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                            In re BRACE
                    Opinion of the Court by Liu, J.

       Against this backdrop of unequal control over community
property, the Legislature sought “to facilitate the wife’s
management of property” by expanding her ability to acquire
and manage separate property. (Blumberg, supra, at p. 155.)
To this end, the Legislature enacted presumptions that
subordinated the community property time-of-acquisition rule
to the common law form of title rule. Specifically, the
Legislature in 1889 amended Civil Code former section 164 to
add the married woman’s presumption: “All other property
acquired after marriage by either husband or wife, or both, is
community property; but whenever any property is conveyed to
a married woman by an instrument in writing, the presumption
is, that the title is thereby vested in her as her separate
property. And in case the conveyance be to such married woman
and to her husband, or to her and any other person, the
presumption is, that the married woman takes the part
conveyed to her as tenant in common, unless a different
intention is expressed in the instrument.” (Stats. 1889, ch. 219,
§ 1, p. 328, codified at Civ. Code, former § 164.) “These statutory
qualifications superimpose[d] the common law technical
reliance on title upon the community property reliance upon
actual ownership and the presumptions relating thereto.” (de
Funiak, Principles of Community Property (1943) § 60, p. 143 &
fn. 24 (Principles of Community Property) [describing Civil Code
former section 164].)
      These presumptions did not always fit neatly together.
The married woman’s presumption, when applied together with
the community property presumption, sometimes led to claims
by married women for more than a half interest in property
jointly deeded to husband and wife. Our court first addressed
this issue in Dunn v. Mullan (1931) 211 Cal. 583 (Dunn), a

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                            In re BRACE
                    Opinion of the Court by Liu, J.

dispute between the administrator of a deceased husband’s
estate and the administrators of his deceased wife’s estate.
Whether the wife’s property was separate or community at her
death would determine how the property passed to the
respective estates. Applying Civil Code former section 164, the
trial court found that the wife had a separate interest in half of
the property as a tenant in common and that the husband and
wife had a community interest in the remaining half of the
property. The trial court ordered the husband’s one-fourth
interest to be probated to his heirs and the wife’s three-fourths
interest to be probated to her heirs. On appeal, the husband
argued that if the wife could have a 50 percent interest as a
tenant in common, it must necessarily follow that the remaining
50 percent interest was the husband’s as a tenant in common.
(Dunn, at p. 587.) This court disagreed, holding that a deed that
names “husband and wife” presumptively creates a tenancy in
common in which the wife holds a 50 percent separate interest
with the remaining interest being community. (Id. at p. 588; see
also Miller v. Brode (1921) 186 Cal. 409, 414 [a deed describing
the couple as husband and wife presumptively created a tenancy
in common]; In re Regnart’s Estate (1929) 102 Cal. App. 643,
645–646 [same].)
      A year later, this court in Siberell considered a dissolution
action in which the wife, invoking Civil Code former section 164,
claimed a 75 percent interest in a home purchased with
community funds and titled as a joint tenancy. (Siberell, supra,
214 Cal. at p. 769.) The court declined to extend Dunn’s rule to
joint tenancy deeds in the context of divorce for two reasons:
“First, from the very nature of the estate, as between husband
and wife, a community estate and a joint tenancy cannot exist
at the same time in the same property. The use of community

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                    Opinion of the Court by Liu, J.

funds to purchase the property and the taking of title thereto in
the name of the spouses as joint tenants is tantamount to a
binding agreement between them that the same shall not
thereafter be held as community property but instead as a joint
tenancy with all the characteristics of such an estate. It would
be manifestly inequitable and a subversion of the rights of both
husband and wife to have them in good faith enter into a valid
engagement of this character and, following the demise of
either, to have a contention made that his or her share in the
property was held for the community, thus bringing into
operation the law of descent, administration, rights of creditors
and other complications which would defeat the right of
survivorship, the chief incident of the law of joint tenancy. A
joint tenancy is one estate and in it the rights of the spouses are
identical and coextensive.
      “Secondly, on its face section 164 has no application to a
case where ‘a different intention is expressed in the instrument’
and it seems to us to be clear . . . that a joint tenancy, the
evidence of which the law requires to be on the face of the
conveyance creating it, is of necessity an expression of the
intention to hold the property otherwise than as community
property and that the equal interest of the spouses must
therefore be classed as their separate but joint estate in the
property.” (Siberell, supra, 214 Cal. at p. 773.)
      Although Siberell seemed to speak in sweeping terms of
the incompatibility of community property and joint tenancy, we
do not read Siberell so broadly for two reasons. First, Siberell
addressed a peculiar circumstance arising from the tension
between the married woman’s presumption and fundamental
concepts of joint tenancy. Unlike tenancy in common deeds
where spouses can have unequal interests (Dunn, supra,
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                    Opinion of the Court by Liu, J.

211 Cal. at pp. 587–588), a joint tenancy “is one estate [in which]
the rights of the spouses are identical and coextensive” (Siberell,
supra, 214 Cal. at p. 773). In “the situation of a wife holding
half the property as her separate estate and the husband
holding the other half as community property, it will be at once
noted that there can be no unity of interest present, for the
interest of the wife would be unequal to and more than that of
the husband.” (Id. at pp. 771–772.) The application of Dunn’s
rule to joint tenancy, the court said, “would be manifestly
inequitable” in its division of marital property at divorce and
also “would defeat the right of survivorship, the chief incident of
the law of joint tenancy.” (Id. at p. 773.)
       In rejecting the wife’s contention that her claim of a 75
percent interest followed directly from Civil Code former section
164, Siberell observed that “on its face section 164 has no
application to a case where ‘a different intention is expressed in
the instrument.’ ” (Siberell, supra, 214 Cal. at p. 773.) The
titling of the spouses’ ownership as a joint tenancy “on the face
of the conveyance creating it,” the court explained, was “an
expression of the intention to hold the property otherwise than
as community property,” and “the equal interest of the spouses
must therefore be classed as their separate but joint estate in
the property.” (Ibid.) In appealing to the statutory carveout for
a “different intention . . . expressed in the instrument,” Siberell
harmonized the dictates of Civil Code former section 164 with
the statute that authorized married couples to acquire and hold
property as joint tenants (Civ. Code, former § 161). Had Siberell
held otherwise, the married woman’s presumption would have
made it impossible for spouses to acquire and hold property as
joint tenants, contrary to Civil Code former section 161. It was
in that context — i.e., a wife’s claim under the married woman’s

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                    Opinion of the Court by Liu, J.

presumption for a 75 percent interest in property deeded to
husband and wife as joint tenants (Siberell, at p. 769) — that
Siberell said that “a community estate and a joint tenancy
cannot exist at the same time in the same property” (id. at
p. 773).
       Second, the court in Siberell expressly limited its decision
to actions between the spouses: “It should be noted here that we
are dealing strictly with the situation as between the parties to
the marriage and are not dealing with the characteristics of the
property as against the claims of judgment creditors or other
third persons as was the case in Hulse v. Lawson.” (Siberell,
supra, 214 Cal. at p. 772.) Less than a year before Siberell, in
Hulse v. Lawson (1931) 212 Cal. 614 (Hulse), this court reached
a different conclusion in a dispute between a wife and her
husband’s creditor over property that the spouses had acquired
during marriage as joint tenants. Hulse held that because the
married couple used community funds to acquire the property,
the property was community property, and as such, the
husband’s creditor could attach the couple’s entire interest. (Id.
at p. 620.) Whereas the source of the purchase funds played no
role in Siberell, it was dispositive in Hulse. (See Hulse, at p. 620
[“It would thus appear that practically the entire purchase price
of the property was derived from the community earnings and
effort of Chester A. Lawson during the period when he and the
appellant Gertrude B. Lawson were living together as husband
and wife.”].) The fact that Siberell reached a different result in
the dissolution context — without disavowing what Hulse had
held just one year earlier outside the dissolution context —
indicates the limited scope of Siberell’s holding.
     In 1935, the Legislature added language to Civil Code
former section 164 to provide that joint conveyances to husband
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                    Opinion of the Court by Liu, J.

and wife created a presumption of community property unless
the form of title indicated otherwise: “[W]hen any of such
property is acquired by husband and wife by an instrument in
which they are described as husband and wife, unless a different
intention is expressed in the instrument, the presumption is that
such property is the community property of said husband and
wife.” (Stats. 1935, ch. 707, § 1, p. 1912, italics added.) This
language, adopted shortly after Siberell and Dunn, appeared to
supersede Dunn by making clear that property deeded to
spouses as “husband and wife” is presumptively community
property. At the same time, the addition of the phrase “unless
a different intention is expressed in the instrument” suggests
that the Legislature approved of Siberell’s interpretation of Civil
Code former section 164: An instrument that vests title as a
joint tenancy expresses a “ ‘different intention’ ” by the parties
than to hold the property as community property. (Siberell,
supra, 214 Cal. at p. 773.) In 1969, the Legislature moved this
language, together with the general community property
presumption (enacted in 1872) and the married woman’s
presumption (enacted in 1889), to Civil Code section 5110.
(Stats. 1969, ch. 1608, § 8, p. 3339.)
                                  B.
      In the wake of Siberell and these evolving statutory
presumptions, courts tended to treat joint tenancy title as
signifying separate property interests between the spouses,
even when the property was acquired during marriage with
community funds. Like Siberell, these cases typically dealt with
divorce or other interspousal disputes. (See, e.g., Delanoy v.
Delanoy (1932) 216 Cal. 23, 25 [dispute between wife and
husband’s mother over husband’s conveyance of his joint
tenancy interest to his mother; wife had previously obtained a
                                  17
                           In re BRACE
                   Opinion of the Court by Liu, J.

judgment against husband]; Machado v. Machado (1962)
58 Cal. 2d 501, 506 (Machado) [divorce]; Gudelj v. Gudelj (1953)
41 Cal. 2d 202, 213–214 (Gudelj) [same]; Tomaier v. Tomaier
(1944) 23 Cal. 2d 754, 757 [same]; Schindler v. Schindler (1954)
126 Cal. App. 2d 597, 604 [same].) The court in Schindler made
a point of quoting Siberell’s limiting language: “As cautioned in
Siberell, [214 Cal. at page 772], it should be noted that we are
dealing here strictly with the controversy between the parties to
the marriage and are not determining standards by which the
characteristics of the property are ascertained when the claims
of judgment creditors or the rights of third persons are
involved.” (Schindler, at p. 604.)
       Notwithstanding this express limitation of Siberell’s
holding, some courts applied Siberell’s rule to disputes involving
third-party creditors. (See Application of Rauer’s Collection Co.
(1948) 87 Cal. App. 2d 248, 258–259 [community property held as
joint tenancy is separate property for the purpose of creditor
claim on homestead]; Oak Knoll Broadcasting v. Hudgings
(1969) 275 Cal. App. 2d 563, 568–569 [presumption of separate
property from joint tenancy title rebutted where couple used
community funds and had no intent to take separate property
interests]; Hansford v. Lassar (1975) 53 Cal. App. 3d 364, 373
(Hansford) [same].) Courts also applied Siberell’s rule at death
to give effect to the right of survivorship. (See Socol v. King
(1950) 36 Cal. 2d 342, 346 (Socol) [probate case where “a true
joint tenancy is created by a conveyance to husband and wife in
that form, although the property is purchased with community
funds”].)
       At the same time, courts struggled to reconcile community
property presumptions with the incidents of separate property
in joint tenancy when dividing ownership of the family home at
                                 18
                            In re BRACE
                    Opinion of the Court by Liu, J.

divorce. Because a joint tenancy deed was sufficient to create a
presumption of separate property, courts were often unable to
award the family home to one of the spouses. (See Machado,
supra, 58 Cal.2d at pp. 506–507.) To more closely conform
property division with couples’ expectations, the Legislature in
1965 amended Civil Code former section 164 to extend the
community property presumption to single-family homes held in
joint tenancy at divorce. (Stats. 1965, ch. 1710, § 1, pp. 3843–
3844 [“[W]hen a single family residence of a husband and wife
is acquired by them during marriage as joint tenants, for the
purpose of the division of such property upon divorce or separate
maintenance only, the presumption is that such single family
residence is the community property of said husband and
wife.”].) The codification of this presumption superseded
Siberell and other cases that had treated single-family homes
held in joint tenancy as separate property upon divorce. (See
Lucas, supra, 27 Cal.3d at pp. 813–815 [discussing history of
this enactment].) This presumption was later added to Civil
Code section 5110 without substantive change. (Stats. 1969,
ch. 1608, § 8, p. 3339.) In 1983, the Legislature expanded this
presumption to cover all property held in joint title, not just
single-family residences, and established a writing requirement
for rebuttal. (Stats. 1983, ch. 342, § 1, p. 1538, codified at Civ.
Code, former § 4800.1.)
      In 1973, the Legislature made a more far-reaching change
to the community property system. Consistent with evolving
norms of gender equality, the Legislature enacted landmark
reforms that allocated equal management rights to the wife over
community property. Whereas previously “[t]he husband ha[d]
the management and control of the community real property”
subject to certain veto rights by the wife (Stats. 1917, ch. 583,

                                  19
                           In re BRACE
                   Opinion of the Court by Liu, J.

§ 2, p. 829 [Civil Code former section 172a]), now “either spouse
has the management and control of the community real
property, but both spouses either personally or by duly
authorized agent, must join in executing any instrument by
which such community real property or any interest therein is
leased for a longer period than one year, or is sold, conveyed, or
encumbered.” (Stats. 1973, ch. 987, § 15, p. 1901, codified at
Civ. Code, former § 5127.) “[T]he concept of equal management
was a radical and significant change in community property law
and was a landmark step toward recognizing equality of the
spouses. Accordingly, the 1975 reform legislation marked a
significant dividing line between the husband-dominated
community property law of the past and the equal managerial
rights of the present day.” (Droeger v. Friedman, Sloan & Ross
(1991) 54 Cal. 3d 26, 35.)
      By securing to both spouses equal management rights
over community property, the Legislature eroded the original
impetus for facilitating the wife’s ownership of separate
property. Accordingly, the Legislature in the same bill amended
Civil Code section 5110 to prospectively eliminate the married
woman’s presumption as well as the additional language
adopted in 1935. (Stats. 1973, ch. 987, § 5, pp. 1898–1899.)
Under this amendment, the statutory provisions that
“superimpose[d] the common law technical reliance on title upon
the community property reliance upon actual ownership”
(Principles of Community Property, supra, at p. 143) do not
apply to property acquired on or after January 1, 1975. The
prospective repeal of the married woman’s presumption
eliminated the original basis of claims for an unequal interest in
joint tenancy property that had precipitated Siberell’s rule
privileging the form of title. And the prospective repeal of the

                                 20
                            In re BRACE
                    Opinion of the Court by Liu, J.

1935 language of Civil Code former section 164 (i.e., that
property jointly deeded to “husband and wife” is presumptively
community property “unless a different intention is expressed
in the instrument”) signaled that ownership interests in marital
property can no longer be directly inferred from form of title, as
Siberell had held.
      Justice Kruger reads Siberell as entirely unaltered by the
1973 amendments because Siberell established a “common law
transmutation rule.” (Conc. & dis. opn., post, at p. 6.) While one
may reasonably debate the extent to which Siberell was
grounded in the statutory text of Civil Code former section 164
or the common law, Siberell was unquestionably a reaction to
the strictures of the former married woman’s presumption and
the resulting inequities at dissolution. (See ante, at pp. 14–16.)
If Siberell did establish a common law rule, that rule was
reconcilable with the statutory presumptions only to the extent
that the presumptions permitted the title instrument to express
“a different intention.” (Siberell, supra, 214 Cal. at p. 773.)
Moreover, although Siberell can be understood as resting on “a
transmutation theory” (conc. & dis. opn., post, at p. 4; id. at
pp. 9–10 & fn. 5), this court has treated it as a title “presumption
arising from the form of the deed” that applies regardless of the
source of the funds or the intentions of either spouse. (Gudelj,
supra, 41 Cal.2d at p. 212; see Socol, supra, 36 Cal.2d at p. 345.)
The Legislature eliminated the carveout for such title
presumptions in 1973.
     Thus, as a result of the 1973 legislation, the form of title
in property jointly held by a married couple can defeat the
general community property presumption only for property
acquired before 1975. For property acquired during marriage
on or after January 1, 1975, the earlier form of title
                                  21
                            In re BRACE
                    Opinion of the Court by Liu, J.

presumptions no longer apply; instead, the general community
property presumption applies.
        After the 1973 amendments, a number of courts relied on
the “different intention” language in Civil Code former section
5110 to determine the character of property acquired before
1975. (See Kane v. Huntley Financial (1983) 146 Cal. App. 3d
1092, 1097, fn. 2 [creditor case reasoning that “[s]ince the grant
deed by which the Kanes acquired the property [in 1969]
provides that title is in joint tenancy, a different intent is
expressed and the community property presumption does not
apply”]; Estate of Petersen (1994) 28 Cal. App. 4th 1742, 1747
[probate case finding that joint tenancy property acquired in
1960 “rebuts the community property presumption found in
Civil Code section 5110” because “the instrument specifically
states otherwise”]; see also Abbett Electric Corp. v. Storek (1994)
22 Cal. App. 4th 1460, 1466 [creditor case relying on both the
statutory language of Civil Code former section 5110 and
Siberell to find that “the form of title here at issue creates a
presumption that Storek and Cook hold the residence as joint
tenants . . . [s]ince the instrument by which [the couple]
acquired the residence [in 1973] [expresses] ‘a different intent
. . . and the community property presumption does not apply’ ”].)
      But, as Justice Kruger details (conc. & dis. opn., post, at
pp. 10–11), not all observers understood the 1973 amendments
to abrogate Siberell. During the 1983 amendments to the
predecessor of Family Code section 2581, a committee analysis
asserted that “the Siberell [form of title] presumption still holds
even though a general presumption favoring community
property was raised with the 1973 statutory change which gives
a wife equal management and control of the community assets.”
(Assem. Com. on Judiciary, Analysis of Assem. Bill No. 26
                                  22
                            In re BRACE
                    Opinion of the Court by Liu, J.

(1983–1984 Reg. Sess.) as amended Apr. 4, 1983, p. 2.) And
some cases, mostly in the probate context, appeared to treat
Siberell’s form of title presumption as a rule of common law
existing separate and apart from the community property
framework. (See Estate of Castiglioni (1995) 40 Cal. App. 4th
367, 386 [applying form of title presumption to property
transferred to joint tenancy in 1989]; Estate of Gallio, supra, 33
Cal.App.4th at p. 597 [applying form of title presumption to joint
tenancy property acquired between 1949 and 1989]; Estate of
Levine (1981) 125 Cal. App. 3d 701, 705 [joint tenancy home
purchased in April 1975 was spouses’ separate property]; see
also In re Marriage of Leversee (1984) 156 Cal. App. 3d 891, 895
[applying Siberell progeny to joint tenancy properties that
couple acquired before marriage in 1977].) But these courts, in
citing Siberell or its progeny, did not engage in any analysis of
the evolving statutory framework, including the 1973
elimination of the married woman’s presumption, which was
central to the issue in Siberell.
       The same is true of our opinion in Lucas, supra, 27 Cal. 3d
808, which could be read as continuing the effect of the married
woman’s presumption. (See Recommendation Relating to
Marital Property Presumptions and Transmutations (Jan.
1984) 17 Cal. Law Revision Com. Rep. (1984) pp. 209–210 &
fn. 9 [describing Lucas as one of the cases that “continue[d] the
effect of the title presumptions by creating an inference of a gift
as to property acquired before or after January 1, 1975”].) In
Lucas, the divorcing couple bought a motorhome in 1976 using
community funds to pay 25 percent of the price and separate
funds of the wife to pay 75 percent. The purchase contract was
made out in the husband’s name, but title and registration were
put in the wife’s name. (Lucas, at p. 817.) The court noted that

                                  23
                            In re BRACE
                    Opinion of the Court by Liu, J.

the wife “wished to have title in her name alone, and [the
husband] did not object.” (Ibid.) Lucas held that the trial court’s
award of the motorhome to the wife as her separate property
was supported by substantial evidence because “[t]itle was
taken in [the wife’s] name alone” and the husband “was aware
of this and did not object.” (Id. at p. 818.) The decision made no
mention of how Civil Code former section 5110 applied to the
motorhome, and its conclusion seemed to continue the effect of
the married woman’s presumption notwithstanding the 1973
amendment eliminating that presumption for property acquired
on or after January 1, 1975. We disapprove In re Marriage of
Lucas, supra, 27 Cal. 3d 808 to the extent it implies that the
married woman’s form of title presumption continues to apply
to marital property acquired on or after January 1, 1975.
      Justice Kruger underscores the reliance interests arising
from these applications of Siberell and its progeny. (Conc. & dis.
opn., post, at pp. 11–12.) But prior cases have made little or no
effort to trace the convoluted history of the law of joint
tenancies. When we examine that history, we find it difficult to
discern any settled expectations that married couples could
have had. The Legislature recognized as much in 1965 when it
enacted the predecessor of Family Code section 2581 to abate
the confusion that couples encountered at death and divorce
when title and underlying expectations of ownership diverged.
(See Domestic Relations, supra, at p. 124; ante, at pp. 10–11.)
The confusion arising from Siberell and its relationship to a
complex statutory history is regrettable. But when we consider
Siberell’s actual ruling — which by its terms “deal[t] strictly”
with dissolution only (Siberell, supra, 214 Cal. at p. 772) —
against the evolution of our community property regime after
1975, there is no longer a basis to apply its presumption of

                                  24
                            In re BRACE
                    Opinion of the Court by Liu, J.

separate property in a dispute between a couple and a
bankruptcy trustee.
                                  C.
      Against the backdrop of the reformed default rules
governing characterization of marital property, the Legislature
in 1984 substantially altered the mechanism for couples to
depart from those default rules. Seeking to curb the risk of
fraud, undue influence, and litigation arising from informal
agreements between spouses that purported to change the
character of property, the Legislature enacted our present-day
transmutation statutes. (Recommendation Relating to Marital
Property Presumptions and Transmutations, 17 Cal. Law
Revision Com. Rep. (1984) pp. 224–225; see Estate of
MacDonald (1990) 51 Cal. 3d 262, 269 (MacDonald).) The
legislation provides that for property acquired on or after
January 1, 1985, a transmutation “is not valid unless made in
writing by an express declaration that is made, joined in,
consented to, or accepted by the spouse whose interest in the
property is adversely affected.” (Stats. 1984, ch. 1733, § 3,
p. 6302, codified at Civ. Code, former § 5110.730, subds. (a), (e).)
This requirement is more stringent than prior law, which
allowed a transmutation to be shown by an oral or written
agreement or a common understanding between the spouses.
(Estate of Blair (1988) 199 Cal. App. 3d 161, 167.)
      Finally, the Legislature in 1992 enacted the Family Code
to unify “the dispersion of family law in several codes.” (22 Cal.
Law Revision Com. Reports, Fam. Code (1992) p. 7.) The
Legislature assigned the various rules and presumptions
discussed above to different sections of the Family Code: The
transmutation requirements in the former sections of the Civil

                                  25
                            In re BRACE
                    Opinion of the Court by Liu, J.

Code were moved, without substantive change, to Family Code
sections 850 to 853; the requirement of an express written
declaration now appears at Family Code section 852,
subdivision (a). (Stats. 1992, ch. 162, § 10, pp. 491–492.) The
community property presumption applicable at divorce,
previously codified at Civil Code section 5110 and then at Civil
Code section 4800.1, now appears at Family Code section 2581
and extends to all “property acquired by the parties during
marriage in joint form, including property held in tenancy in
common, joint tenancy, or tenancy by the entirety, or as
community property.” (Stats. 1993, ch. 219, § 111.7, p. 1619.)
The married woman’s presumption and the post-Siberell/Dunn
rule allowing form of title to rebut the community property
presumption, both previously codified at Civil Code section
5110, now appear at Family Code section 803 and apply only to
property acquired before 1975. (Stats. 1992, ch. 162, § 10,
p. 491.) And the general community property presumption, also
previously codified at Civil Code section 5110, now appears as a
stand-alone provision at Family Code section 760 and applies to
all property acquired during marriage “wherever situated,”
“[e]xcept as otherwise provided by statute.” (Stats. 1992,
ch. 162, § 10, p. 488.)
                                 IV.
      As this history shows, our community property system has
gradually evolved toward one that affords both spouses equal
interests and control over community assets. At the same time,
the rules characterizing property as community or separate
based on form of title have faded in the contemporary statutory
framework. The provisions of Civil Code former section 5110
(Stats. 1969, ch. 1608, § 8, p. 3339) that had allowed “a different
intention . . . expressed in the instrument” conveying jointly
                                  26
                            In re BRACE
                    Opinion of the Court by Liu, J.

held property to rebut the community property presumption no
longer apply; their applicability is confined to property acquired
before 1975. (See Fam. Code, § 803.) The characterization of
property acquired in joint form on or after January 1, 1975 is
instead governed by the comprehensive language of Family
Code section 760: “Except as otherwise provided by statute, all
property, real or personal, wherever situated, acquired by a
married person during the marriage while domiciled in this
state is community property.” Unlike Civil Code former section
5110, Family Code section 760 does not permit the community
property presumption to be rebutted simply by the manner in
which a married couple takes title.
      As noted, the form of title presumption in Evidence Code
section 662 is not an exception to the community property
presumption in Family Code section 760. The Braces principally
contend here that the community property presumption is
limited to the context of marital dissolution. But against a
historical backdrop in which our community property
framework has become more encompassing, while rules
characterizing marital property based on form of title have
receded, we find no indication that this is so. Nothing in the text
of Family Code section 760 expresses such a limitation.
      Moreover, when we look to other statutes that refer to
community property, we find that the Legislature has explicitly
applied the Family Code section 760 presumption to define
third-party rights, such as creditor rights, against one or both
spouses. (Code of Civ. Proc., § 695.020, subd. (a) [“Community
property is subject to enforcement of a money judgment as
provided in the Family Code.”].) The Civil Code incorporates
Family Code section 760 into its definition of joint property
interests. (Civ. Code, §§ 682, 687.) And if spouses want to
                                  27
                           In re BRACE
                   Opinion of the Court by Liu, J.

transact with each other, the Legislature subjects these
agreements to the laws governing fraudulent transfers. (Fam.
Code, §§ 851, 852.) “These [Family Code] provisions presuppose
that, as a general rule, third parties are entitled to rely on the
community property presumption in transactions involving
marital property.” (In re Brace, supra, 566 B.R. at p. 24.)
      In Valli, we held that the statutory transmutation
requirements apply to purchases made by one or both spouses
from a third party using community funds and that Evidence
Code section 662, assuming it “ever applies in marital
dissolution proceedings,” “does not apply when it conflicts with
the transmutation statutes.” (Valli, supra, 58 Cal.4th at
p. 1406.) In that case, the form of title on an insurance policy
purchased with community funds and put in the wife’s name
was not sufficient to alter its characterization as community
property under Family Code section 760.
      The Braces urge us to limit Valli to the context of marital
dissolutions. But we see no basis in the text, purpose, or history
of Family Code section 760 to confine Valli’s holding in this way.
It would carve a major hole in the community property system
to hold that Evidence Code section 662, a general statute that
addresses the import of legal title — and not Family Code
section 760, a statute that specifically addresses the
characterization of property acquired during marriage —
governs the characterization of property acquired during
marriage for all purposes other than divorce. (See Rader v.
Thrasher (1962) 57 Cal. 2d 244, 252 [“a special provision relating
to a particular subject will govern against a general provision”];
Haines, supra, 33 Cal.App.4th at p. 301 [“where two
presumptions are in conflict, the more specific presumption will
control over the more general one”]; cf. Estate of Bibb (2001)
                                 28
                           In re BRACE
                   Opinion of the Court by Liu, J.

87 Cal. App. 4th 461, 469–470 (Bibb) [“[T]he more general form
of title presumption created by Vehicle Code sections 4150.5 and
5600.5 should not be used to negate the requirements of section
852, subdivision (a), which assure that a spouse’s separate
property entitlements are not undermined.”].) In the absence of
a statute that expressly restricts the applicability of the
community property presumption to dissolution actions, we
decline to engraft such a major limitation onto Family Code
section 760. Indeed, to conclude that Evidence Code section 662
and not Family Code section 760 applies outside the context of
divorce would run counter to the intent of the pivotal 1973
legislation that prospectively eliminated separate property
inferences from form of title.
       The Braces argue that Family Code section 2581 implies
the existence of “a sort of ‘hybrid estate’ where joint tenancy
retains its historic character as constituting two separate
estates for some purposes and a unitary estate in dissolution
matters.” That provision says: “For the purpose of division of
property on dissolution of marriage or legal separation of the
parties, property acquired by the parties during marriage in
joint form, including property held in tenancy in common, joint
tenancy, or tenancy by the entirety, or as community property,
is presumed to be community property.” (Fam. Code, § 2581.)
In the Braces’ view, the fact that Family Code section 2581
establishes a community property presumption specifically
“[f]or the purpose of division of property on dissolution of
marriage or legal separation of the parties” means that spouses
“hold property as joint tenants in their dealings with third
parties,” while the property “retains its community nature in
dissolution proceedings.”

                                 29
                            In re BRACE
                    Opinion of the Court by Liu, J.

      Family Code section 2581 is a special presumption at
divorce that “ ‘specifically governs real property designated as
joint tenancy.’ ” (In re Brace, 566 B.R. at p. 24, quoting Valli,
supra, 58 Cal.4th at p. 1412 (conc. opn. of Chin, J.); see ante, at
pp. 19, 26.)      Unlike the general community property
presumption, the Family Code section 2581 presumption cannot
be rebutted by tracing; it can only be rebutted by (1) a clear
statement in the deed or other documentary evidence of title
that the property is separate property and not community
property, or (2) proof that the parties have made a written
agreement that the property is separate property. (Fam. Code,
§ 2581, subds. (a), (b); see Haines, supra, 33 Cal.App.4th at
p. 291.) In discussing this presumption, we have explained that
“the affirmative act of specifying a form of [joint] ownership in
the conveyance of title . . . removes such property from the more
general [community property] presumption” and places it under
the specific community property presumption now stated in
Family Code section 2581. (Lucas, supra, 27 Cal.3d at pp. 814–
815.) “It is because of this express designation of [joint]
ownership that a greater showing is necessary to overcome the
[special] presumption arising therefrom than is necessary to
overcome the more general presumption that property acquired
during marriage is community property.” (Id. at p. 815.)
      Thus, the import of Family Code section 2581 is that it
establishes a stronger presumption of community property at
dissolution when title is held in joint form, while the general
community property presumption, rebuttable by tracing, applies
at dissolution to property not held in joint form. Nothing in the
text, purpose, or history of Family Code section 2581 suggests
an intent to limit the applicability of Family Code section 760 to
dissolution matters, although, as Justice Kruger notes, the

                                  30
                            In re BRACE
                    Opinion of the Court by Liu, J.

legislative history of the 1983 amendments suggests that some
believed Siberell still controlled outside dissolution. (Conc. &
dis. opn., post, at pp. 10–11.) If anything, Family Code section
2581 demonstrates that when the Legislature intends to limit a
provision affecting the character of property to the marital
dissolution context, it is capable of saying so. The absence of
any such language in Family Code section 760 confirms that its
scope is not limited to marital dissolution.
      The Braces also rely on Hansford, supra, 53 Cal. App. 3d
364, a dispute between a wife and her husband’s creditor who
was trying to reach their home held in joint tenancy. The court
held that “[i]n view of the express language of [the predecessor
statute to Family Code section 2581], the community-property
presumption has no application to the instant case as it involves
a dispute with a third party, rather than one between husband
and wife in a dissolution of marriage or legal separation
proceeding. The presumption that is applicable in this case at
bench is that of a joint-tenancy ownership that is the presumed
fact which flows from the basic fact of a deed that is joint tenancy
in form.” (Id. at p. 371.) But the property at issue was acquired
well before 1975, and at the time, the relevant statutes provided
that a designation of joint tenancy on the conveyance served to
displace the general community property presumption. (Ante,
at pp. 14–16, 19–21.) The presumptions in effect today are
different.    The rule displacing the community property
presumption when “a different intention is expressed in the
instrument” conveying title jointly to “husband and wife” is now
confined to property acquired before 1975. (Fam. Code, § 803,
subd. (c).) For property acquired on or after January 1, 1975,
the general community property presumption of Family Code
section 760 applies and, as noted, the special presumption of

                                  31
                            In re BRACE
                    Opinion of the Court by Liu, J.

Family Code section 2581 does not imply any limitation of
Family Code section 760 to dissolution actions.
      The Braces further contend that limiting the application
of community property presumptions to interspousal disputes
would promote stability of title. By presumptively giving effect
to form of title, Evidence Code section 662 serves to “protect[]
parties to a real property transaction, as well as creditors.”
(Haines, supra, 33 Cal.App.4th at p. 294.) Whereas “concerns of
stability of title are lessened in characterization problems
arising from [interspousal] transmutations” (id. at p. 295), the
Braces argue, such concerns have more weight in disputes
involving third parties or the rights of creditors.
       But when property is held in joint tenancy, both tenants
are on record title. And recorded deeds commonly indicate the
marital status of the grantees; in this case, for example, the
Braces took title as “husband and wife as joint tenants.” (See,
e.g., Lucas, supra, 27 Cal.3d at p. 811 [title taken as “ ‘Gerald E.
Lucas and Brenda G. Lucas, Husband and Wife as Joint
Tenants’ ”]; Bibb, supra, 87 Cal.App.4th at p. 463 [grant deed
signed by husband conveying separate property home to himself
“and his wife as joint tenants”]; Estate of Mitchell (1999)
76 Cal. App. 4th 1378, 1382 [title taken as “ ‘Robert S. Mitchell
and Shirley C. Mitchell, husband and wife as joint tenants’ ”]; In
re Marriage of Scherr (1986) 177 Cal. App. 3d 314, 316 [wife chose
to title deed as “ ‘husband and wife as joint tenants’ ”].) If the
joint tenants are married, a creditor or third-party purchaser
will be on notice that the property is presumptively community
and that an alienation or encumbrance of that property must be
joined by both parties. The third party can inquire whether a
written transmutation agreement rebuts the community
property presumption; such an agreement, in order to be
                                  32
                            In re BRACE
                    Opinion of the Court by Liu, J.

“effective as to third parties without notice thereof,” must be
recorded. (Fam. Code, § 852, subd. (b).) We do not think this
approach puts third parties at risk of not being able to determine
who owns the property and the nature of the ownership.
       It is true that Family Code section 760 also applies to
situations where community property is titled in one spouse’s
name. But the risk to stability of title is mitigated by Family
Code section 1102, subdivision (c)(2), which validates leases,
contracts, mortgages, and deeds between the spouse holding
record title to community real property and a third party acting
in good faith with no knowledge of the marital relationship.
This provision is an exception to the general rule that an
adversely affected spouse may void unilateral conveyances of
community real property. (Fam. Code, § 1102, subds. (a), (d).)
The law thus protects innocent third parties who transact with
the spouse holding record title to community property in
circumstances where failure to do so would undermine stability
of title. (Cf. Valli, supra, 58 Cal.4th at p. 1413 (conc. opn. of
Chin, J.).)
       Further, our approach does not undermine the stability of
title in the context of probate. The Braces argue that the
inapplicability of Evidence Code section 662 to this bankruptcy
dispute would mean that at death “title companies could not
insure title to the surviving spouse based upon a death
certificate, but, instead would run the risk that a non-spousal
heir might challenge title based upon allegations that the
property was community in nature and not joint tenancy.”
      Courts have consistently held that for property titled in
joint tenancy, the form of title controls at death. (See, e.g.,
Estate of Gallio, supra, 33 Cal.App.4th at p. 597; Estate of

                                  33
                           In re BRACE
                   Opinion of the Court by Liu, J.

Levine, supra, 125 Cal.App.3d at p. 705.) Although these cases
often relied on Siberell or its progeny, we see no indication that
the abrogation of Siberell in 1973 or any subsequent
development suggests an intent by the Legislature to disturb
the rule that the form of title controls the disposition of joint
tenancy property at death.
        To the contrary, the Legislature has acted in a manner
consistent with the case law. In 1994, the Legislature amended
Family Code section 2040 to specify that when one party files
for divorce, “the summons shall contain the following notice:
‘WARNING: California law provides that, for purposes of
division of property upon dissolution of marriage or legal
separation, property acquired by the parties during marriage in
joint form is presumed to be community property. If either party
to this action should die before the jointly held community
property is divided, the language of how title is held in the deed
(i.e., joint tenancy, tenants in common, or community property)
will be controlling and not the community property
presumption.’ ” (Stats. 1994, ch. 1269, § 13, pp. 8034–8035;
Fam. Code, § 2040, subd. (c).) This reflects the common
expectation that “holding property in joint tenancy will allow the
surviving spouse to avoid probate when [his or] her partner
dies.” (Estate of Luke, supra, 194 Cal.App.3d at p. 1015.)
      In addition, the rule that form of title controls at death
was a key motivation for the Legislature’s 2000 enactment of
Assembly Bill No. 2913, which created a new form of title:
community property with a right of survivorship. (Assem. Bill
No. 2913 (1999–2000 Reg. Sess.) ch. 645, § 1, pp. 4203–4204,
codified at Civ. Code, § 682.1.) This form of ownership combines
the tax benefits of holding community property at the death of
one spouse — a stepped-up basis in the full value of the
                                 34
                            In re BRACE
                    Opinion of the Court by Liu, J.

community property — with the right of survivorship in a joint
tenancy. (See Sen. Rules Com., Off. of Sen. Floor Analyses, 3d
reading analysis of Assem. Bill No. 2913 (1999–2000 Reg. Sess.)
as amended August 18, 2000, pp. 2–4.) In its analysis of
Assembly Bill 2913, the Senate Rules Committee noted that it
was necessary to create a new form of title because “[e]xisting
law provides that if either spouse should die before any jointly
held community property is divided, the language of how title is
held in the deed (i.e., joint tenancy, tenants in common, or
community property) will be controlling and not the community
property presumption.” (Id. at p. 2.)
      Moreover, the Legislature has imported community
property characterization rules into the Probate Code to prevent
full operation of the right of survivorship in certain situations.
Probate Code former section 228 provided that when a person
died intestate with no surviving spouse or issue, “the [portion of
the] estate . . . [that] was community property of the decedent
and a previously deceased spouse” did not pass to the heirs of
the decedent but instead to the children of the previously
deceased spouse. (Stats. 1939, ch. 1065, § 1, p. 2992.) Probate
Code former section 229 adopted a similar approach for the
separate property of the previously deceased spouse. (Id., at
pp. 2992–2993.)       In characterizing property under these
statutes, courts held that “it is the source of its acquisition and
not the nature of its ownership immediately before death, which
is controlling.” (Hudspeth v. Earlywine (1964) 225 Cal. App. 2d
759, 762; see Estate of Luke, supra, 194 Cal.App.3d at p. 1015
[“We conclude the community property presumption, not the
form-of-the-title presumption, should apply in cases arising
under former section 229.”]; In re Abdale’s Estate (1946)
28 Cal. 2d 587, 591–592; In re Taitmeyer’s Estate (1943)

                                  35
                           In re BRACE
                   Opinion of the Court by Liu, J.

60 Cal. App. 2d 699, 705, 712.)        In 1983, the Legislature
consolidated these statutes into Probate Code section 6402.5.
Although the Legislature altered the statute’s applicability to
certain property, the rules for determining “ ‘the portion of the
decedent’s estate attributable to the decedent’s predeceased
spouse’ ” are the same. (Recommendation Proposing New
Probate Code (Dec. 1989) 20 Cal. Law. Rev. Com. Rep. (1990)
p. 1466.) By enacting specific source of acquisition rules to
govern this scenario, the Legislature implicitly confirmed that
unless otherwise specified, form of title controls the disposition
of joint tenancy property at death.
       The coexistence of the general community property
presumption and the form of title rule at death highlights a
precept implicit in the various legislative enactments we have
discussed: The particular manner in which property is acquired,
titled, or held by a married couple is conceptually and legally
distinct from the underlying character of the spouses’ ownership
of the property as separate or community. Our decision in
Siberell elided these concepts in order to avoid the “manifestly
inequitable” division of marital property arising from the
married woman’s presumption. (Siberell, supra, 214 Cal. at
p. 773.) Today, with that presumption no longer in effect for
property acquired during marriage on or after January 1, 1975,
there is nothing inequitable in a general presumption that such
property held in joint tenancy is community property. (See id.
at p. 773 [“A joint tenancy is one estate and in it the rights of
the spouses are identical and coextensive.”]; Fam. Code, § 751
[“The respective interests of each spouse in community property
during continuance of the marriage relation are present,
existing, and equal interests.”].) The Legislature has expressly
recognized that characterization of joint tenancy property as

                                 36
                            In re BRACE
                    Opinion of the Court by Liu, J.

community property does not “defeat the right of survivorship.”
(Siberell, at p. 773; see Fam. Code, § 2040, subd. (c).) Each
spouse’s right of survivorship arising from joint tenancy title
remains an “expectancy” that is realized upon the other spouse’s
death. (Riddle, supra, 102 Cal.App.3d at p. 526.)
      To be sure, the rule that form of title controls at death is
not absolute. In practice, putative heirs or devisees have sought
to rebut this form of title presumption in order to access the
decedent’s share of real property through intestacy or devise.
(See Socol, supra, 36 Cal.2d at pp. 345–346; Estate of Petersen,
supra, 28 Cal.App.4th at p. 1747; Estate of Blair, supra,
199 Cal.App.3d at p. 167; Bibb, supra, 87 Cal.App.4th at
pp. 464–465.) But such litigation is not an artifact of what we
hold in this case. Our decision today does not alter the well-
established default rule that form of title controls at death, nor
does it alter the procedures through which a surviving joint
tenant may clear title to real property held in joint tenancy.
(Prob. Code, §§ 210–212.) Compliance with these procedures
entitles title insurers and third parties to rely on the affidavit of
death as prima facie evidence of the surviving joint tenant’s
ownership. (Id., § 212.)
      Finally, the Braces argue that our holding will undermine
the expectations of spouses and third-party creditors. Applying
the community property presumption to third-party disputes
outside of the dissolution context, the Braces say, “would . . .
subject the interests of innocent spouses to the debts of their
spouses, and in the case of bankruptcy subject their one-half
interest to administration by the bankruptcy court.”
      But it is a basic feature of the community property system
that “the community estate is liable for a debt incurred by either

                                  37
                           In re BRACE
                   Opinion of the Court by Liu, J.

spouse before or during marriage, regardless of which spouse
has the management and control of the property and regardless
of whether one or both spouses are parties to the debt or to a
judgment for the debt,” unless a statute expressly provides
otherwise. (Fam. Code, § 910, subd. (a).) In contrast to the
indications from the Legislature that form of title controls the
disposition of joint tenancy property at death, there is no
indication that the Legislature intended to permit spouses to
avoid community debts by the mere acceptance of a joint tenancy
deed from a third party. Nor could Siberell be read to stand for
such a proposition; as noted, Siberell expressly declined to opine
on third-party claims and distinguished a prior case holding
that a husband’s creditor could reach the couple’s entire interest
in joint tenancy property acquired during marriage with
community funds. (Siberell, supra, 214 Cal. at p. 772, citing
Hulse, supra, 212 Cal. at p. 614.)
       Importantly, our decision today does not prevent an
innocent or estranged spouse from protecting his or her interests
in separate property. For purposes other than dissolution, a
spouse can prove separate ownership in jointly titled property
and rebut the Family Code section 760 community property
presumption by tracing. (Lucas, supra, 27 Cal.3d at p. 815.) A
spouse can convert jointly held property acquired with
community funds into separate property through a written
transmutation agreement. (Fam. Code, §§ 850, subd. (a), 852.)
A spouse can hold his or her earnings in an account outside of
the other spouse’s control in order to protect those earnings from
liability for the other spouse’s pre-marital debts. (Id., § 911.)
And couples can opt out of this system altogether through pre-
marital agreements. (Id., § 1600 et seq.) In light of these
options, the Braces’ concerns about stability and expectations do

                                 38
                            In re BRACE
                    Opinion of the Court by Liu, J.

not persuade us that the default rule governing the community’s
liability for the debts of either spouse should differ according to
the nature of the action.
      In sum, we hold that the community property presumption
in Family Code section 760 applies not only to dissolution
actions but also to a dispute between one or both spouses and a
bankruptcy trustee, and that Evidence Code section 662 does
not apply when it conflicts with the Family Code section 760
presumption.
                                  V.
      Having elucidated the default rules that govern
characterization of property during marriage, we now answer a
further question posed by the bankruptcy trustee and amici in
this case: When spouses use community funds to acquire
property from a third party and take title in a joint tenancy
deed, does the form of the deed constitute an express declaration
that transmutes the community funds into separate property?
(See Cal. Rules of Court, rule 8.548(f)(5); see also Peabody,
supra, 59 Cal.4th at p. 665, fn. 1.)
      As noted, spouses can change the character of property
during marriage by satisfying the transmutation requirements.
(Fam. Code, §§ 850, 852.) For transmutations that occurred
before 1985, a written agreement is not required; a valid
transmutation can be demonstrated by substantial evidence of
an oral or written agreement or a common understanding
between the spouses. (Estate of Blair, supra, 199 Cal.App.3d at
p. 167; see ibid. [the conduct of the spouses is relevant
evidence].)
      For property acquired on or after January 1, 1985, a
“transmutation of real or personal property is not valid unless

                                  39
                           In re BRACE
                   Opinion of the Court by Liu, J.

made in writing by an express declaration that is made, joined
in, consented to, or accepted by the spouse whose interest in the
property is adversely affected.” (Fam. Code, § 852, subd. (a); see
id., subd. (e).) The Legislature enacted the writing requirement
“to remedy problems which arose when courts found
transmutations on the basis of evidence the Legislature
considered unreliable.”      (MacDonald, supra, 51 Cal.3d at
p. 269.)
      In MacDonald, we explained that the transmutation
requirements are not satisfied by just “any writing.”
(MacDonald, supra, 51 Cal.3d at p. 269.) The adversely affected
party must make an “ ‘express declaration’ ” in an instrument
that “contains language which expressly states that the
characterization or ownership of the property is being changed.”
(Id. at p. 272.) We reasoned that an IRA account consent
agreement did not satisfy this requirement because it could not
be determined from the face of the document whether the wife
was “aware that the legal effect of her signature might be to
alter the character or ownership of her interest in the pension
funds.” (Id. at pp. 272–273.) Similarly, we held in Valli that the
act of putting a life insurance policy in the name of one spouse
was not sufficient because the “[h]usband never expressly
declared in writing that he gave up his community interest in
the policy bought with community funds.” (Valli, supra,
58 Cal.4th at p. 1406.)
      By contrast, the Court of Appeal in Bibb found the express
declaration requirement satisfied where a husband signed a
grant deed conveying his interest in his separate property to him
and his wife as joint tenants. (Bibb, supra, 87 Cal.App.4th at
pp. 468–469.) The court reasoned that the deed was in the
statutory form required to convey an interest in property. (Id.
                                 40
                            In re BRACE
                    Opinion of the Court by Liu, J.

at p. 468; see Civ. Code, § 1092 [prescribing statutory form of
deed required to convey title].) Because the deed contained
language that expressly conveyed the husband’s interest to his
wife, the court explained, the property was validly transmuted
from his separate property to property held in joint tenancy by
the couple. (Bibb, at p. 469.)
      In this case, we do not address interspousal deeds by
which one spouse conveys his or her separate property to both
spouses as joint tenants, as in Bibb, or by which both spouses
deed their community property to each other as joint tenants.
Instead, we focus here on the common scenario of a married
couple using community funds to buy property from a third
party. Such a conveyance typically occurs through a grant deed
signed by the third-party grantor. (Civ. Code, § 1092.) The deed
conveys the third party’s interest in the property to the spouses,
and the spouses, as grantees, accept the interest of the grantor.
Although the deed may “ ‘expressly declare[]’ ” that title is vested
as joint tenants (id., § 683), the deed does not “contain[]
language which expressly states that the characterization or
ownership of the property is being changed” between the
spouses. (MacDonald, supra, 51 Cal.3d at pp. 271–272.)
      Professor Blumberg, as amicus curiae, argues that the
Braces relinquished “the incidents of community property
ownership . . . when the parties accepted title in a deed
specifying an alternative and mutually exclusive form of joint-
and-equal ownership.” (See Blumberg, supra, at p. 150 [joint
tenancy “title creates a presumption of transmutation”]; see id.
at p. 156.) But the Legislature and the courts have repeatedly
lamented that spouses do not understand what effect, if any,
joint tenancy title has on the characterization of property
purchased with community funds. (See In re Marriage of Buol
                                  41
                            In re BRACE
                    Opinion of the Court by Liu, J.

(1985)     39 Cal. 3d 751,   762–763;    Schindler,   supra,
126 Cal.App.2d at p. 601; ante, at pp. 10–11.) If anything, we
have observed that the 1965 enactment of the special
community property presumption applicable at divorce had the
effect of “more closely matching the intent and assumptions of
most spouses who acquire and hold their residence in joint
tenancy.” (Lucas, supra, 27 Cal.3d at p. 814 [discussing
predecessor to Family Code § 2581].)
      Against this backdrop, we see no basis to assert that
married couples intend joint tenancy title to result in separate
property interests with regard to third-party claims. Indeed, the
mere fact that spouses choose to take title as joint tenants
appears to be the kind of “unreliable” evidence that the
Legislature intended to target with the transmutation statute.
(MacDonald, supra, 51 Cal.3d at p. 269; see Schindler, supra,
126 Cal.App.2d at p. 601 [“It is common knowledge that
innumerable husbands and wives with little or no information
about estates in real property acquiesce without reflection in the
suggestion that they place purchased property in joint
tenancy.”].) Under Family Code section 852, the question is
whether it is apparent solely from the titling of a deed as a joint
tenancy that the spouses understood the writing to change the
character of property acquired with community funds into
separate property. We conclude the answer is no because a joint
tenancy deed does not itself constitute “language which
expressly states that the characterization or ownership of the
property is being changed.” (MacDonald, at p. 272.)
      Nor is a joint tenancy deed exempt from the express
declaration requirement on the ground that neither spouse’s
ownership interest is adversely affected. It is true that holding
property as joint tenants does not completely deprive one spouse
                                  42
                            In re BRACE
                    Opinion of the Court by Liu, J.

of possession, as is the case when one spouse takes community
property with sole title. (See Valli, supra, 58 Cal.4th at p. 1399.)
Taking title in joint tenancy also does not change the 50 percent
interest that each spouse has in community property. But a
property right is not simply the percentage share a person holds
in a particular asset. It encompasses a “bundle of rights and
privileges as well as of obligations” (Union Oil Co. v. State Bd.
of Equal. (1963) 60 Cal. 2d 441, 447, fn. omitted), such as the
right to possess, lease, encumber, or alienate the property.
Shared management and control is a defining feature of our
community property system and has driven the evolution of our
community property laws. (Fam. Code, §§ 1100, 1102.) With
few exceptions, “either spouse has the management and control
of the community real property.” (Id., § 1102, subd. (a).)
Spouses must act as fiduciaries to one another in the
management and control of the community assets. (Id., § 1100,
subd. (e).) And both spouses must “join in executing an
instrument by which that community real property or an
interest therein is leased for a longer period than one year, or is
sold, conveyed, or encumbered.” (Id., § 1102, subd. (a).) By
contrast, a “married person may, without the consent of the
person’s spouse, convey the person’s separate property.” (Id.,
§ 770, subd. (b).) Although the ability to unilaterally convey
community property or the absence of fiduciary duties may be
advantageous to a spouse in certain situations, the law
presumes that couples desire the protections above.
      Indeed, it is not difficult to see why a spouse’s claim of a
separate interest arising from joint tenancy title causes the
other spouse’s interest to be “adversely affected.” (Fam. Code,
§ 852, subd. (a).) If a husband collateralizes his half of the
couple’s family home without his wife’s consent, the wife’s

                                  43
                           In re BRACE
                   Opinion of the Court by Liu, J.

ability to collateralize her half is probably not much relief for
her. Such concerns are heightened by the fact that the right of
survivorship — the main incident of joint tenancy title — may
be unilaterally severed. (See Civ. Code, § 683.2; Riddle, supra,
102 Cal.App.3d at p. 526.)
      In sum, for property acquired with community funds on or
after January 1, 1985, the titling of a deed as a joint tenancy is
not an express written declaration sufficient to transmute the
property into separate property under Family Code section 852.
                        CONCLUSION
      We answer the Ninth Circuit’s question as follows:
Evidence Code section 662 does not apply to property acquired
during marriage when it conflicts with Family Code section 760.
For joint tenancy property acquired during marriage before
1975, each spouse’s interest is presumptively separate in
character. (Fam. Code, § 803; Siberell, supra, 214 Cal. at
p. 773.) For joint tenancy property acquired with community
funds on or after January 1, 1975, the property is presumptively
community in character. (Fam. Code, § 760.)
      If such property was acquired before 1985, the parties can
show a transmutation from community property to separate
property by oral or written agreement or a common
understanding. (Fam. Code, § 852, subd. (e); Estate of Blair,
supra, 199 Cal.App.3d at p. 167.) Although a joint tenancy deed
is insufficient to effect a transmutation, a court may consider
the form of title in determining whether the parties had a
common agreement or understanding under the pre-1985 rules.
(See MacDonald, supra, 51 Cal. 3d at p. 270 & fn. 6.) For joint
tenancy property acquired with community funds on or after
January 1, 1985, a valid transmutation from community

                                 44
                           In re BRACE
                   Opinion of the Court by Liu, J.

property to separate property requires a written declaration
that expressly states that the character or ownership of the
property is being changed. (Fam. Code, § 852, subd. (a);
MacDonald, at p. 272). A joint tenancy deed, by itself, does not
suffice.
      Nothing in our decision precludes spouses from holding
separate property as joint tenants or from transmuting
community property into separate property held in joint tenancy
as long as the applicable transmutation requirements are met.
Nor does our decision alter the operation of the right of
survivorship that is the main incident of joint tenancy title.

                                             LIU, J.

We Concur:
CANTIL-SAKAUYE, C. J.
CHIN, J.
CORRIGAN, J.
CUÉLLAR, J.
GROBAN, J.

                                 45
                          In re BRACE
                            S252473

    Concurring and Dissenting Opinion by Justice Kruger

      A married couple uses community funds to purchase real
estate and takes title as joint tenants. Decades later, one spouse
declares bankruptcy. Now, to determine just how much of the
real estate the bankruptcy trustee can reach, the bankruptcy
court must decide: Under California law, is the real estate the
spouses’ community property (and therefore reachable in full),
or is it instead the jointly held but separate property of the
spouses (and therefore reachable only as to the debtor spouse’s
one-half interest)?
      I agree with much of the majority’s answer to the question.
At one time the law presumed that real estate acquired in this
manner was the jointly held, separate property of the spouses.
(See Siberell v. Siberell (1932) 214 Cal. 767 (Siberell).) But
today, the presumption runs in the other direction: When a
couple purchases property with community funds, the property
generally continues to belong to the community unless the
spouses expressly declare an intent to change—or
“transmute”—it to separate property under Family Code section
852. (See Fam. Code, §§ 760, 852.) This express declaration
requirement applies no matter how the couple takes title,
whether as joint tenants or otherwise. (See maj. opn., ante, at
pp. 2–3, 39 [form of title presumption in Evidence Code section
662 does not control the inquiry]; In re Marriage of Valli (2014)
58 Cal. 4th 1396, 1406 [property titled in one spouse’s name

                                1
                            In re BRACE
                 Kruger, J., concurring and dissenting

must satisfy statutory transmutation requirements to overcome
community property presumption].)1
      Where I part ways with the majority is on the timing of
this change in the governing law. I would identify that date as
1985, when the transmutation rule presently codified in Family
Code section 852 first took effect. This is because the old
separate property presumption was itself a transmutation rule;
the Legislature changed the rule when it changed the
requirements for transmuting community property to separate
property.
      The majority, by contrast, identifies the relevant moment
of change as 1975, when the Legislature implemented other
reforms that “eroded the original impetus” for the old rule. (Maj.
opn., ante, at p. 20; see id. at pp. 20–21.) But unlike the passage
of the modern transmutation rule, the 1975 reforms had no
direct effect on the old separate property presumption; “eroding
the original impetus” for a rule is not the same thing as
overruling it. And for the Braces and other married couples who
purchased property in joint tenancy sometime between 1975
and 1985, the difference matters. These couples were entitled
to depend on the law as it had existed before the present
transmutation rule took effect in 1985. By backdating the
relevant changes by a decade, the majority risks upending the

1
      Under a provision of the Family Code originally enacted
in the Civil Code in 1983, an express declaration is not sufficient
to transmute joint tenancy property into separate property for
purposes of dissolution of marriage or legal separation of the
spouses. (Fam. Code, § 2581; see Civ. Code, former § 4800.1,
added by Stats. 1983, ch. 342, § 1, p. 1538.) But because the
Braces’ action does not involve dissolution or separation, that
rule is inapplicable here.

                                  2
                            In re BRACE
                 Kruger, J., concurring and dissenting

reasonable expectations of individuals who structured their
purchases in reliance on the law as the courts had then
described it.
      The relevant history begins with our 1932 decision in
Siberell, which established the separate property presumption.
Siberell was decided against the backdrop of various statutory
presumptions governing the characterization of marital
property. One of these presumptions, still substantively in
effect today, was the presumption that property acquired by
spouses during marriage is community property. (Civ. Code,
former § 164, added by Stats. 1889, ch. 219, § 1, p. 328 [enacted
in 1889].) A second presumption, known as the married
woman’s presumption, dictated that, despite the general
community property presumption, “whenever any property is
conveyed to a married woman by an instrument in writing, the
presumption is that the title is thereby vested in her as her
separate property. And in case the conveyance be to such
married woman and her husband, or to her and any other
person, the presumption is that the married woman takes the
part conveyed to her as tenant in common, unless a different
intention is expressed in the instrument . . . .” (Ibid.) The
juxtaposition of these two statutory presumptions sometimes
led to spouses holding different interests in the same piece of
property. For example, in Dunn v. Mullan (1931) 211 Cal. 583,
we held that a deed conveyed to “husband and wife”
presumptively created a tenancy in common in which the wife
held a half interest as her separate property and the husband
held the remaining half as community property. (Id. at p. 588.)
      The question in Siberell was whether the relevant statutes
required the same result when spouses acquired property
deeded in joint tenancy. We said no, for reasons specific to joint

                                  3
                            In re BRACE
                 Kruger, J., concurring and dissenting

tenancies. We explained, as an initial matter, that the spouses
could not have different interests in the same property because
joint tenancies require unity of interest, meaning that the joint
tenant spouses must have identical and coextensive interests in
the property. This unity of interest, we explained, would be
destroyed if “a wife hold[s] half the property as her separate
estate and the husband hold[s] the other half as community
property, . . . [because] the interest of the wife would be unequal
to and more than that of the husband.” (Siberell, supra, 214 Cal.
at pp. 771–772.) Specifically, in some instances, the wife would
“own[] three-fourths of the property” and the husband would
own “the remaining one-fourth,” as was the result in Dunn.
(Siberell, at p. 772.) But we went on to explain that a decision
to take title in joint tenancy is “tantamount to a binding
agreement between [the spouses] that the [property] shall not
thereafter be held as community property but instead as a joint
tenancy with all the characteristics of such an estate,” under
which “the equal interest of the spouses” is “classed as their
separate but joint estate in the property.” (Id. at p. 773.) Such
an agreement was sufficient to rebut any contrary
presumption—be it the married woman’s presumption or the
general community property presumption—that might arise by
operation of statute. (Ibid.)
       This latter point was at the core of Siberell’s holding, and
it rested on what was, fundamentally, a transmutation theory—
namely, that when spouses use community funds to purchase
property titled in joint tenancy, they are agreeing to transmute
their community property into separate, jointly held property.
Indeed, Siberell itself used this very term in describing the
issue, asking whether, when the spouses took title as joint
tenants, “was not the common property, by the consent of the

                                  4
                           In re BRACE
                Kruger, J., concurring and dissenting

spouses, then and there transmuted into one estate, the
separate property of each and held jointly by them?” (Siberell,
supra, 214 Cal. at p. 769, italics added.)
       To be sure, Siberell’s transmutation reasoning was not
beyond reproach. The Siberell court evidently believed that
spouses could claim the chief benefit of a joint tenancy—the
right of survivorship at death—only if they also intended to
claim the property as separate during life. (Siberell, supra, 214
Cal. at p. 773.) So the court refused to treat the spouses’
property as community during life, lest it deprive them of the
right of survivorship at death. To hold otherwise, Siberell said,
would have been “manifestly inequitable and a subversion of the
rights of both husband and wife,” because “following the demise
of either,” community interests in the property would “bring[]
into operation the law of descent, administration, rights of
creditors and other complications which would defeat the right
of survivorship.” (Ibid.) This particular concern was misplaced,
for reasons the majority alludes to: A couple who takes property
in joint tenancy may secure the right of survivorship and other
incidents of separately held property at death, even if the
property belongs to the community during life. (Maj. opn., ante,
at pp. 36–37.)
       But whatever concerns underlay Siberell’s reasoning, the
critical point is that we instructed courts to presume that joint
tenancy property is separate property because the spouses
implicitly agreed to a transmutation—and not because the
statutory scheme required this result. That is not to say the
statutory scheme was entirely irrelevant to the outcome. The
transmutation rule in Siberell did have the happy effect of
equalizing the spouses’ interests in the property,
notwithstanding a set of statutory presumptions that sometimes

                                 5
                            In re BRACE
                 Kruger, J., concurring and dissenting

created a peculiar imbalance in the spouses’ relative interests.
But even though the statutory scheme may have partly
motivated the Siberell transmutation rule, it was not the basis
for the rule. In fact, Siberell expressly held that the statutes did
not control the question, noting that the statutory married
woman’s presumption does not apply “to a case where ‘a
different intention is expressed in the instrument,’ ” including
where the spouses agree to hold title in joint tenancy.2 (Siberell,
supra, 214 Cal. at p. 773, quoting Civ. Code, former § 164.)
      Over the next 50 years, both this court and the Courts of
Appeal repeatedly applied Siberell’s common law transmutation
rule in a variety of contexts to hold that joint tenancy property
was presumptively the separate property of the spouses. It is
worth noting that none of this case law describes Siberell as
rooted in any particular operation of the statutory
presumptions; the cases instead describe Siberell in the
language of transmutation.3 (See, e.g., Delanoy v. Delanoy,

2
       The same language was included in the presumption
added in 1935, which abrogated Dunn’s rule for tenancies in
common. (See Stats. 1935, ch. 707, § 1, p. 1912 [“[W]hen any of
such property is acquired by husband and wife by an instrument
in which they are described as husband and wife, unless a
different intention is expressed in the instrument, the
presumption is that such property is the community property of
said husband and wife.” (Italics added.)].) Because a joint
tenancy deed had been understood to express a different
intention—that is, an intention to hold the property as the
separate property of the spouses—the 1935 amendment had no
effect on the Siberell presumption. (Siberell, supra, 214 Cal. at
p. 773; but see maj. opn., ante, at pp. 20–21.)
3
       The Legislature, too, apparently considered Siberell’s rule
to be a common law transmutation rule. (See, e.g., Assem.

                                  6
                            In re BRACE
                 Kruger, J., concurring and dissenting

supra, 216 Cal. 23, 26 [citing Siberell for the proposition that
when spouses purchase joint tenancy property with community
funds, “the community interest must be deemed severed by
consent”]; Tomaier v. Tomaier, supra, 23 Cal. 2d 754, 757–758
[applying transmutation principles to hold that spouses could
rebut the Siberell presumption with evidence that they intended
to retain community interests in the property]; Socol v. King
(1950) 36 Cal. 2d 342, 345–346 [holding that, under established
transmutation principles, the Siberell presumption controls
unless both spouses intended to hold community interests in the
property]; Schindler v. Schindler (1954) 126 Cal. App. 2d 597,
602 [“ ‘The form of the conveyance is itself some evidence of the
intent to change it from community property, and creates a
rebuttable presumption to that effect.’ ”].)
      Nor was the Siberell transmutation rule confined to
actions between spouses, as the majority suggests. (See maj.
opn., ante, at pp. 16, 24, 38.) Siberell did say that it was dealing
with an interspousal action (Siberell, supra, 214 Cal. at p. 772),
but nothing in Siberell’s transmutation reasoning was limited to
that context.4 Unsurprisingly, then, none of the cases applying

Interim Com. on Judiciary, Final Rep. on Relating to Domestic
Relations (Jan. 11, 1965) p. 118 [“The result of Siberell, Delanoy
[v. Delanoy (1932) 216 Cal. 23] and Tomaier [v. Tomaier (1944)
23 Cal. 2d 754] has been to create in the joint tenancy deed a
presumption that the property has been changed from
community property to joint tenancy . . . .”].)
4
      The majority highlights Siberell’s reference to Hulse v.
Lawson (1931) 212 Cal. 614, but the Hulse citation is not
particularly telling. Although the majority understands Hulse
as using tracing, and not a form-of-title presumption, in the
context of a creditor suit to characterize the spouses’ joint

                                  7
                           In re BRACE
                Kruger, J., concurring and dissenting

Siberell suggested the rule was limited to the context of
dissolution or other interspousal disputes. Indeed, the Siberell
rule was regularly applied outside the dissolution context,
including to claims made by third party creditors. (See, e.g.,
Hansford v. Lassar (1975) 53 Cal. App. 3d 364, 371–373 [third
party creditor claim]; Oak Knoll Broadcasting Corp. v. Hudgings
(1969) 275 Cal. App. 2d 563, 568–569 [same]; see also Socol v.
King, supra, 36 Cal.2d at pp. 345–346 [claim at death].) This
understanding of Siberell’s breadth was evidently shared by the
Legislature, which in 1965 effectively abrogated the Siberell
presumption for certain joint tenancy property, but solely for
purposes of dissolution—a limitation that would have been
meaningless if Siberell did not already apply outside the
dissolution context. (See Civ. Code, former § 164, amended by
Stats. 1965, ch. 1710, § 1, pp. 3843–3844 [“[W]hen a single
family residence of a husband and wife is acquired by them
during marriage as joint tenants, for the purpose of the division
of such property upon divorce or separate maintenance only, the
presumption is that such single family residence is the
community property of said husband and wife.”].)

tenancy property (maj. opn., ante, at p. 16), Hulse has generally
been understood as standing for the very different proposition
that a presumption based on how spouses take title can be
rebutted by other evidence of the spouses’ intent. (See Hulse, at
pp. 616, 619–620 [framing question as whether property
acquired in joint tenancy “had become” the community property
of the spouses and relying on fact that spouses made mortgage
payments with community property after the purchase];
Tomaier v. Tomaier, supra, 23 Cal.2d at p. 757 [citing Hulse for
proposition that “evidence is admissible to show that husband
and wife who took property as joint tenants actually intended it
to be community property”].)

                                 8
                           In re BRACE
                Kruger, J., concurring and dissenting

       This brings us to 1973, when the Legislature prospectively
eliminated the married woman’s presumption for property
acquired on or after January 1, 1975. This amendment changed
the legal background against which Siberell was decided. But
nothing in the 1973 amendments changed the Siberell rule
itself—that spouses who take title to property as joint tenants
are presumed to have intended to transmute their community
property to separate property. It was not until the precursor to
Family Code section 852 was passed in 1984 that the
Legislature changed the transmutation rules, and even then
only for transmutations occurring on or after January 1, 1985.
(See Civ. Code, former § 5110.730, added by Stats. 1984,
ch. 1733, § 3, p. 6302.)       Though the 1973 amendments
eliminated the statutory presumptions that would have created
unequal interests in joint tenancy property absent Siberell’s
rule, they did not speak to the core premise of the rule.5

5
      The majority claims that the Siberell rule could not have
survived the 1973 amendments because those amendments
eliminated the “carveout” to statutory presumptions for titles
that expressed “ ‘a different intention.’ ” (Maj. opn., ante, at
p. 21; see also id. at pp. 26–27.) But Siberell’s transmutation
rule did not depend on a statutory “carveout” any more than did
any other common law transmutation rules in effect before
1985—all of which, by their nature, operated to overcome the
statutory presumption that property acquired by spouses during
marriage is community property. There is no dispute that, as a
general matter, transmutation principles survived the 1973
amendments and were used to overcome the statutory
community property presumption until the Legislature
tightened the requirements for transmutations effected on or
after January 1, 1985. If common law transmutation rules in
general survived the 1973 amendments, it is hard to see why
Siberell’s rule alone would be an exception.

                                 9
                            In re BRACE
                 Kruger, J., concurring and dissenting

       It makes sense, then, that contemporary authorities
assumed Siberell’s transmutation rule survived the 1973
amendments. Lower courts continued to apply the Siberell rule
to property acquired after January 1, 1975. (See, e.g., Estate of
Levine (1981) 125 Cal. App. 3d 701, 705 [applying Siberell
presumption to joint tenancy property acquired after January 1,
1975]; cf. Estate of Blair (1988) 199 Cal. App. 3d 161, 167, quoting
Levine, at p. 705 [“Before January 1, 1985, the form of title
presumption”—i.e., Siberell’s presumption—“could be rebutted
by showing the character of the property had been changed by
oral or written ‘agreement or common understanding between
the spouses.’ ”]; maj. opn., ante, at pp. 22–23.) Legislative
history accompanying relevant statutory amendments in 1983
suggests the Legislature held the same understanding. (See
Assem. Com. on Judiciary, Analysis of Assem. Bill No. 26 (1983–
1984 Reg. Sess.) as amended Apr. 4, 1983, p. 2 [“The Siberell
[form-of-title] presumption still holds even though a general
presumption favoring community property was raised with the
1973 statutory change which gives a wife equal management
and control of the community assets.”]; Annual Rep. (Dec. 1983)
17 Cal. Law Revision Com. Rep. (1984) appen. VII, p. 864
[noting that Civ. Code, former § 4800.1, the precursor to Fam.
Code, § 2581, would “reverse[] the common law presumption”—
i.e., Siberell’s presumption—“that property acquired by the
spouses during marriage in joint tenancy form is joint tenancy
property”].)6

6
      Academic commentary from the time is also in accord.
(See, e.g., Reppy, Debt Collection from Married Californians:
Problems     Caused    by    Transmutations,   Single-Spouse
Management, and Invalid Marriage (1981) 18 San Diego L.Rev.

                                  10
                            In re BRACE
                 Kruger, J., concurring and dissenting

       These authorities demonstrate that, while the “history of
the law of joint tenancies” may have been “convoluted” (maj.
opn., ante, at p. 24), the governing rule was clearly understood:
Notwithstanding the 1973 amendments, property acquired by
spouses as joint tenants before 1985 was generally presumed to
be their jointly held, separate property. This understanding
should come as no surprise, since this rule was not based on the
statutory married woman’s presumption, or any other element
of the statutory scheme. Before today’s opinion, few would have
ventured the view that Siberell’s transmutation rule had been
effectively overruled by a set of property law reforms that had
nothing to do with transmutation.
      Again, the underpinnings of Siberell’s transmutation
reasoning were open to question, for reasons the majority
correctly identifies and now clarifies. (Maj. opn., ante, at pp. 36–
37.) But this clarification comes too late for those who, like the
Braces, acquired property in joint tenancy between 1975 and
1985 with the reasonable expectation that the property would

143, 164 [“Case law has firmly established, however, that the
mere recital of joint tenancy raises a presumption that [the
spouses] by agreement transmuted the community
consideration to joint tenancy property.” (Citing Siberell.)];
Sterling, Joint Tenancy and Community Property in California
(1983) 14 Pacific L.J. 927, 960 [“Title in joint tenancy creates a
rebuttable presumption that the property is in fact owned in
joint tenancy rather than as community property.”]; Bruch, The
Definition and Division of Marital Property in California:
Towards Parity and Simplicity (1982) 33 Hastings L.J. 769, 830,
fn. 238 [noting that Siberell “still controls” and that the
Legislature that enacted the 1973 amendments “signaled its
understanding that Siberell’s presumption of equal separate
property interests remains”].)

                                  11
                           In re BRACE
                Kruger, J., concurring and dissenting

be presumed separate under Siberell’s longstanding rule.7
Because the Braces were entitled to rely on the law as it then
stood, I would hold that, in a suit against a bankruptcy trustee,
property acquired by spouses in joint tenancy on or before
December 31, 1984, is presumptively the spouses’ separate
property, while property acquired since then is presumptively
the property of the community.
                                                        KRUGER, J.

7
      Though some of those couples might have been
“confus[ed]” about the effects of their decision to take title as
joint tenants (maj. opn., ante, at p. 24), surely it is safe to
presume that others were aware of the state of the law at the
time and took title expecting its protections.

                                 12
See next page for addresses and telephone numbers for counsel who argued in Supreme Court.

Name of Opinion In re Brace
__________________________________________________________________________________

Unpublished Opinion
Original Appeal
Original Proceeding XXX on request pursuant to rule 8.548, Cal. Rules of Court
Review Granted
Rehearing Granted

__________________________________________________________________________________

Opinion No. S252473
Date Filed: July 23, 2020
__________________________________________________________________________________

Court:
County:
Judge:

__________________________________________________________________________________

Counsel:

Law Offices of Stephen R. Wade, Stephen R. Wade; Law Office of W. Derek May and W. Derek May for
Defendants and Appellants.

Grace Ganz Blumberg as Amicus Curiae on behalf of Defendants and Appellants.

Tara Twomey for National Association of Consumer Bankruptcy Attorneys and National Consumer
Bankruptcy Rights Center as Amici Curiae on behalf of Defendants and Appellants.

Marshack Hays, D. Edward Hays, Matthew W. Grimshaw and Judith E. Marshack for Plaintiff and
Respondent.

Walzer Melcher and Christopher C. Melcher as Amicus Curiae on behalf of Plaintiff and Respondent.
Counsel who argued in Supreme Court (not intended for publication with opinion):

Stephen R. Wade
Law Offices of Stephen R. Wade
405 N. Indian Hill Blvd.
Claremont, CA 91711
(909) 985-6500

D. Edward Hays
Marshack Hays LLP
870 Roosevelt
Irvine, CA 92620
(949) 333-777

Christopher C. Melcher
Walzer Melcher LLP
5941 Variel Avenue
Woodland Hills, CA 91367
(818) 591-3700