CA Divorce: Gift Money From Parents Put Towards A House

[Zigner]

On the other hand don't be misled to believe - as someone has mistakenly proposed - that if the investment in the family home was her sole and separate property that because community property has also been invested and that the home is titled in both names that some sort of "commingling" occurred such as to transmute or convert the investment into community property.

That point was already made and acknowledged above.

 

[LdiJ]

Why are you now saying that the money was "specifically" given to your wife? In your first post you only mention that her parents made a contribution to the purchase by way of gift.

So how was the money transferred from the parents? In what form was it transferred and to whom or where? Is there any writing wherein the intention of the parents to gift it to their daughter is expressed? What evidence is there to refute that it was given not to her alone, but to both of you?

The laws distinguishing separate from marital or community property as well as those relating to gifts of personal property are very clear. Just don't rush to some unsupportable conclusion that merely because money invested in the home came from her parents that the investment is her sole and separate property.

On the other hand don't be misled to believe - as someone has mistakenly proposed - that if the investment in the family home was her sole and separate property that because community property has also been invested and that the home is titled in both names that some sort of "commingling" occurred such as to transmute or convert the investment into community property.

The commingling or the blending of separate and marital property becomes significant in this context only when the identity of one cannot be reasonably traced and distinguished from the other.

The best example of the bolded is a bank account that contained premarital funds, and continues to receive marital funds...with money coming back out again on a regular basis. While not impossible to trace back the actual usage of marital vs premarital, it would be extraordinarily difficult, time consuming and expensive to do.

 

[tangentcity]

Murky area of law, especially in California

I don't think it's a clear area of law. There's no telling which way the judge will rule next week in my very similar case. (Actually since he's biased against me I'm virtually certain he'll side with my ex-in-laws' testimony against my own.)
My former lawyer said: since the checks given to you both for the downpayment on your house had her name alone on it, the gifts were to her alone, and she gets the Family Code 2640 credit for them. I asked him for specific law on that point, and he (John Gilligan, in Long Beach) pointed me to Evidence Code 662. Now as it happens ten seconds worth of googling on that will turn up the California Supreme Court's recent (2014 I think) ruling in Re Marriage of Valli, which established that in disputes over property during divorce, Evidence Code 662 does not hold sway over the California Family Code. Evidence Code has to do with Title creating a strong presumption of ownership. Since the name on a check, whom it's made out to, is a form of title, it would seem that you can't look to title alone to decide, in a divorce, who the gift was made out to. That's our case: my ex's parents gave us tons of gifts, and only since the date of separation have they started claiming that all the gifts were to their daughter alone, not to both of us.

Fine. So what does the Family Code say? Gifts to "a" spouse are that spouse's separate property. And how do you determine that gifts were to "a" spouse rather than the married couple? According to Wendy Burgower in her article "A New Spin on an Old Topic": " If the donor fails to clearly communicate, whether orally or in writing, at the time of the gift, that his/her intent is to gift the cash/property to only his/her relative spouse, the trier of fact may likely find the gift was intended to be for both spouses. In the case In Re Royal, 107 S.W.3d 846, Tex. App. – Amarillo 2003, no pet.), the Amarillo Court of Appeals upheld the trial court’s ruling that enough evidence was presented rebutting the grandparent’s testimony that the gift was solely for the grandson/husband. This case involved a cash gift as well as forgiveness of debt. The court’s opinion includes interesting analysis on the elements of proving a gift – intent, delivery, and acceptance. Id. at 852. Ultimately, the court found that wife presented sufficient evidence to support the trial court’s finding that the gift (forgiveness of debt) in the amount of $40,000.00 was a gift to both parties, rather than solely to the grandson."

In DivorceSource.com, "Gifts from Third Parties", there's this:
"I. Was the Gift to Both Spouses?

Even if a disputed conveyance is a "gift," the question remains whether that gift was intended for both spouses or for one spouse alone.

A gift to both spouses could in theory be construed as one-half the separate property of one spouse and one-half the separate property of the other spouse, because arguably each spouse's interest in the property was acquired by gift within the meaning of the gift exclusion. Courts have not so held, however. Instead, a gift to both spouses is viewed as marital property, while a gift to one spouse alone is separate property. B. Turner, Equitable Distribution of Property 5.17 at 203 n.234 (2d ed. 1994).

Suppose that the parents of one spouse gave the couple money to make a down payment on a home. Should the money be characterized as a gift to the son or daughter, and hence separate property, or as a gift to the marital partnership, and thus marital property? The answer depends upon all of the relevant evidence, such as the testimony of the donor and the parties, the titling of the property, the spouses' relationship with the donor, the nature and history of the property, previous gifts, and how the spouses treated the property.

The burden of proof lies on the spouse who claims that the gift was individual. See O'Neal v. O'Neal, 703 S.W.2d 535 (Mo. Ct. App. 1986). Ohio's equitable distribution statute provides a standard clear and convincing evidence for proving that a gift was meant for only one spouse. Ohio Rev. Code Ann. 3105.171(A)(6)(vii) (Anderson Supp. 1995). Testimony of Donor and Spouses. The donor's testimony on the issue cannot be excluded. In re Marriage of Cecil, 202 Ill. App. 3d 202, 560 N.E.2d 374 (1990). Often the donor's testimony is given substantial weight. For example, in In re Marriage of Vanderpol, supra, stock which the husband received from his mother was held to be a gift to him alone, where the mother testified that she did not intend to make a gift to the wife and that she and the husband's father wanted him to have the company after she died. See also Tubbs v. Tubbs, supra; Dotsko v. Dotsko, 244 N.J. Super. 668, 583 A.2d 395 (App. Div. 1990); Maher v. Maher, 144 A.D.2d 343, 533 N.Y.S.2d 961 (1988); Stainback v. Stainback, 11 Va. App. 13, 396 S.E.2d 686 (1990).

The courts also take into account the spouses' testimony on the issue. E.g., Nolden v. Nolden, 448 N.W.2d 892 (Minn. Ct. App. 1989) (not error to accept wife's testimony that donor intended a gift to her alone). In the face of conflicting or ambiguous testimony, a trial court's decision to disbelieve the donor or one of the spouses will usually be affirmed on appeal. See, e.g., Veilleux v. Veilleux, supra."

There are two take-home messages from that. In a just world, the testimony of the spouse and the spouse's parents who are claiming the gift was to their biological relative alone, and the testimony of the spouse who is claiming the gift was to the married couple, should cancel each other out, since both have self-interested reasons to claim as much. In a just world, the judge would have to weigh ALL the relevant evidence, i.e. "the testimony of the donor and the parties, the titling of the property, the spouses' relationship with the donor, the nature and history of the property, previous gifts, and how the spouses treated the property. Since this is not a just world, however, and doing the former demands too much work, what will happen is that the judge will go with his gut. "[A] trial court's decision to disbelieve the donor or one of the spouses will usually be affirmed on appeal." California divorce rulings are all but unappealable, because judges are accorded immense discretion to make decisions on the fly without being open to challenge. So it's a crap shoot.