Benson v. Benson
36 Cal. 4th 1096 (2005)
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Rule of Law:
Under Family Code § 852(a), a transmutation of marital property is not valid unless made by an express declaration in writing, and this strict requirement is not subject to the equitable exception of part performance.
Facts:
- Douglas Benson (Husband) and Diane L. Benson (Wife) married in 1983.
- During the marriage, Husband accumulated community property interests in a stock ownership plan and a 401(k) retirement plan through his employer.
- Wife's father gifted the couple a 100% ownership interest in their Santa Barbara home, making it community property.
- For his own estate planning purposes, Wife's father later asked the couple to convey the house to an irrevocable trust of which Wife was the beneficiary.
- In late 1996 and early 1997, Husband and Wife both signed grant deeds transferring their community property interest in the house to Wife's trust.
- Husband alleged that in exchange for him signing the deeds, Wife orally agreed to transmute her community property interest in his retirement accounts, making them his separate property.
- Wife promised to execute a writing to this effect but never did.
Procedural Posture:
- Diane L. Benson (Wife) petitioned for dissolution of the marriage in the trial court.
- At trial, the court found that Douglas Benson's (Husband's) act of deeding the house to Wife's trust constituted part performance of the oral agreement, making it enforceable against Wife, and thus characterized the retirement accounts as Husband's separate property.
- Wife, as appellant, appealed the trial court's decision to the Court of Appeal.
- The Court of Appeal affirmed the judgment of the trial court.
- Wife sought review in the Supreme Court of California.
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Issue:
Does a spouse's part performance of an oral agreement to transmute community property into separate property satisfy the 'express declaration' in writing requirement of Family Code section 852(a)?
Opinions:
Majority - Baxter, J.
No. A spouse's part performance of an oral agreement does not satisfy the statutory requirement for an express written declaration to validate a transmutation of property. Family Code § 852(a) requires a writing that states on its face a change in the character or ownership of the property is being made, and this rule does not permit exceptions like those applied to the general statute of frauds. The legislature enacted this strict standard to abrogate prior 'easy transmutation' rules, increase certainty in marital property disputes, and reduce litigation and perjury. Allowing a part performance exception would resurrect the very problems the statute was designed to solve. Unlike premarital agreements, transmutations between spouses are subject to a higher formal standard due to the fiduciary relationship and the need to protect community property interests.
Concurring - Moreno, J.
No, part performance is not an adequate substitute for the express written declaration required by section 852(a). This case does not present an opportunity to decide what remedies, such as for unjust enrichment or breach of fiduciary duty, might be available when one spouse is unfairly disadvantaged by an illusory oral promise to transmute property. Because the husband settled all claims related to the house conveyance, the court's holding is properly limited to the narrow question of whether part performance validates a transmutation, which it does not.
Analysis:
This decision solidifies the strict formality required for marital property transmutations, cementing the precedent set by Estate of MacDonald. It explicitly rejects the application of equitable doctrines like part performance, which are common in general contract law, to the specific context of Family Code § 852(a). The ruling prioritizes the legislative goals of certainty and fraud prevention over enforcing parties' unwritten intentions. For future cases, this means that any claim of transmutation without a clear, express written declaration from the adversely affected spouse is almost certain to fail, regardless of the surrounding circumstances or conduct of the parties.
