## Facts

- Margery M. MacDonald and Robert F. MacDonald married in 1973; each had children from prior marriages.
- Robert participated in a defined-benefit pension plan beginning in 1977.
- In 1984, after Margery learned she had terminal cancer, the spouses divided various assets to create separate estates, intending that Margery leave her assets to her children.
- Robert’s pension plan terminated in 1984; in March 1985 he received a lump-sum distribution of $266,557.90.
- It was undisputed that Margery had a community-property interest in the pension proceeds.
- Robert deposited the pension proceeds into three IRA accounts titled in his name alone and designated his children as beneficiaries.
- Margery signed the spousal-consent portions of the IRA beneficiary designation forms consenting to Robert’s beneficiary choices.
- After Margery’s death in 1985, her estate asserted a community-property interest in the IRA funds; Robert claimed Margery’s signatures transmuted her interest into his separate property.

## Issues

1. Whether Margery’s signatures on IRA spousal-consent beneficiary forms constituted an “express declaration” sufficient to transmute her community-property interest in pension proceeds into Robert’s separate property under former Civil Code § 5110.730(a).

## Decision

- The California Supreme Court affirmed the Court of Appeal, which had reversed the trial court.
- The court held that the spousal-consent beneficiary forms did not contain an “express declaration” effecting a transmutation.
- Margery’s community-property interest in the pension proceeds was not transmuted; the estate retained its community-property interest in the IRA assets.

## Legal Principles

- Under former Civil Code § 5110.730(a), a transmutation is invalid unless made in writing by an “express declaration” by the spouse whose interest is adversely affected.
- A writing satisfies the “express declaration” requirement only if it contains language that expressly states a change in the characterization or ownership of the property is being made.
- Courts may not rely on extrinsic evidence of intent or surrounding circumstances to supply the statutorily required express declaration.
- Documents that merely reflect consent to a beneficiary designation or a waiver of benefit rights, without expressly stating a change of property ownership or character, do not effect a transmutation.

## Conclusion

The court required that transmutations be proven by a clear written statement expressly changing ownership or character of the property, and ruled that standard IRA spousal-consent beneficiary forms, standing alone, do not convert community-property pension proceeds into the other spouse’s separate property.


Estate of MacDonald, 51 Cal. 3d 262, 794 P.2d 911, 272 Cal. Rptr. 153 (Cal. 1990)