David K. Wilkinson Family Law Blog on Lawyers.com

An automobile is not a gift under Family Code 852 because it is not a "tangible article of a personal nature."

Tuesday, March 23, 2010 by David K. Wilkinson

In Marriage of Buie
and Neighbors the 4^th District Court of Appeals ruled that an
automobile purchased with a spouse’s separate property funds is not a gift
because it is does not qualify as a “tangible article of a personal nature”
under Family Code §852.

California
applies a rebuttable presumption that any property acquired during marriage is
community. However, parties can alter the characterization of the property, or
transmute, if the agreement is in writing signed by the adversely affected
party. Section 852 does allow an exception to the writing requirement if the
item is a “tangible article[e] of personal nature that [is] used solely or
principally by the spouse to whom the gift is made and that is not substantial
in taking into account the circumstances of the marriage.”

In this case Husband bought a
Porsche using funds from the sale of Wife’s separate property residence. At
trial he argued that the Porsche was his separate property because it was a
gift from his wife. The trial court focused on the circumstances of the
marriage, and concluded that a writing was not required to transmute the
Porsche into Husband’s separate property because the car was not substantial in
relation to the assets of the marriage.

The appellate court reversed
because the trial court did not examine the “tangible article of a personal
nature” clause of the gift exception in Section 852. The Fourth District looked
to the Commission Report which stated that a car was not a gift of personal
nature under the Code. Accordingly, the Porsche was not a gift, and Wife should
be reimbursed for her separate property contributions to the purchase of a
community asset per Family Code §2640(b). Under this section, whether Wife intended
the Porsche as a gift is irrelevant. Because the purchase of the car could be
traced to her separate property, Husband was ordered to reimburse Wife for her
separate property contributions to the acquisition of the vehicle.

Wilkinson & Finkbeiner are
Orange County family lawyers helping those with divorce, child custody, child
support and all family law issues.

Posted at 14:47 PM

Topic: Family Law