## Facts

- Frank and Barbara Holtemann married in 2003 and separated in 2006; they had no children together.
- Frank entered the marriage with substantial separate property; Barbara had comparatively few assets.
- The spouses jointly retained an estate-planning attorney to prepare documents aimed at probate avoidance and tax reduction.
- In 2005, they executed (1) a spousal property transmutation agreement and (2) a community property trust as part of a unified estate plan.
- In dissolution proceedings, Frank claimed his premarital assets remained separate property, arguing the estate-planning documents did not accomplish a present transmutation.
- Barbara asserted the documents converted Frank’s separate property into community property.
- The trial court bifurcated the legal effect of the transmutation agreement and ruled for Barbara, finding an “express declaration” sufficient under California Family Code § 852(a).
- Frank pursued interlocutory review of the bifurcated order.

## Issues

1. Whether the spouses’ transmutation agreement, read with the related trust, contained an “express declaration” under California Family Code § 852(a) sufficient to effect a present transmutation of Frank’s separate property into community property.
2. Whether estate-planning language referencing consequences at death prevents the documents from operating as a present transmutation during marriage.

## Decision

- The Court of Appeal affirmed the bifurcated order.
- The transmutation agreement, considered together with the trust, satisfied § 852(a)’s writing and signature requirements and contained an express declaration changing the character of property.
- The documents effected a present transmutation of Frank’s separate property to community property despite language describing death-related consequences.

## Legal Principles

- A valid spousal transmutation under California Family Code § 852(a) requires a writing containing an “express declaration,” made or accepted by the adversely affected spouse, that clearly states the characterization or ownership of the property is being changed.
- No specific “magic words” are required, but the writing must unambiguously communicate an intent to change property character or ownership.
- Mere labeling of property as “community” in estate-planning instruments, without express language changing ownership, is insufficient.
- Estate-planning purpose and death-referenced provisions do not negate a present transmutation when the written instruments otherwise clearly accomplish an immediate change in property character.

## Conclusion

The court held that the spouses’ signed transmutation agreement, read with their community property trust, met § 852(a)’s “express declaration” requirement and converted the husband’s separate property into community property effective during the marriage, notwithstanding estate-planning and death-related wording.


In re Marriage of Holtemann, 166 Cal. App. 4th 1166, 83 Cal. Rptr. 3d 385 (Cal. Ct. App. 2008)