## Facts

- Clifford and Anh Brace married in 1972.
- During marriage, they acquired two California real properties using community funds.
- They took record title to both properties as “husband and wife as joint tenants.”
- In 2011, Clifford filed for Chapter 7 bankruptcy.
- The Chapter 7 trustee sought a declaration that the properties were community property so the entire interests would enter the bankruptcy estate; the spouses contended joint tenancy title limited the estate to the debtor’s one-half interest.

## Issues

1. In a dispute between spouses and a bankruptcy trustee, does the Evidence Code § 662 form-of-title presumption apply when it conflicts with the Family Code § 760 community property presumption?
2. For property acquired during marriage with community funds but titled in joint tenancy, what presumptions govern characterization for acquisitions on or after January 1, 1975?
3. For property acquired on or after January 1, 1985, does joint tenancy title alone satisfy statutory transmutation requirements?

## Decision

- The court held Evidence Code § 662 does not apply when it conflicts with the Family Code § 760 community property presumption in such disputes.
- For property acquired on or after January 1, 1975 with community funds and titled in joint tenancy, the property is presumptively community property in a dispute with a bankruptcy trustee.
- For property acquired before January 1, 1975, joint tenancy title continues to support a presumption of separate property interests.
- For property acquired on or after January 1, 1985, joint tenancy titling by itself does not transmute community property into separate property because transmutation requires a statutory “express declaration” in writing.
- The court answered the certified state-law question; the bankruptcy outcome depended on applying these rules to the properties at issue.

## Legal Principles

- Family Code § 760 creates a broad presumption that property acquired during marriage while domiciled in California is community property, and it applies beyond dissolution contexts, including disputes affecting creditor and trustee rights.
- Evidence Code § 662 (title holder presumed beneficial owner; rebuttable only by clear and convincing evidence) yields when it conflicts with Family Code § 760 in characterizing marital property acquired with community funds in trustee-versus-spouses disputes.
- For acquisitions on or after January 1, 1975, community funds acquisition during marriage generally triggers the community property presumption even if title is held in joint tenancy.
- For acquisitions before January 1, 1975, California law preserves a separate-property inference arising from joint tenancy title.
- For acquisitions on or after January 1, 1985, a transmutation requires an “express declaration” in writing; a deed reflecting joint tenancy title alone is insufficient to change community property to separate property.

## Conclusion

The court clarified that, in disputes between spouses and a bankruptcy trustee, California’s community property presumption governs over the form-of-title presumption when they conflict; for post-1975 acquisitions with community funds, joint tenancy title generally does not prevent treatment as community property, and for post-1985 acquisitions it cannot, without an express written declaration, effect a transmutation to separate property.


In re Brace, 9 Cal. 5th 903 (Cal. 2020)