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Husband’s Porsche Was Not a Gift to Himself

Posted By Azemika   |   Comments (0)
Community & Separate Property,

 

 

A California Appellate Court has ruled that a Trial Court was wrong in ruling that a Porsche vehicle purchased during the parties’ marriage with Wife’s separate property funds (but treated by Husband as gift to him) was Husband’s separate property. In re Marriage of Buie and Neighbors, Husband and Wife were married in 1999. Sometime thereafter, Husband paid $60,000 for a 2001 Porsche 996 using funds from Wife’s separate property checking account. Husband considered the Porsche to be a gift from Wife, apparently because the purchase took place shortly before his birthday. Husband and Wife subsequently divorced.

After trial on reserved issues, Trial Court found that the Porsche had been transmuted to Husband’s separate property under California Family Code Section 852(c) [written transmutation unnecessary for gifts of "‘tangible articles of a personal nature’ that are ‘not substantial in value’" relative to marital circumstances].

Claiming that the Porsche was not Husband’s separate property and seeking California Family Code Section 2460(b) reimbursement, Wife appealed, and California Appellate Court has now reversed the Trial Court’s decision and has remanded the cases back to Trial Court. The Appellate Court has ruled that (1) the Porsche should be characterized as community property unless California Family Code Section 852(c) applies; (2) the language of Section 852(c) is ambiguous as to whether automobiles qualify as "tangible articles of a personal nature;" (3) per legislative history of Section 852(c) and report of California Law Revision Commission, gift of automobile does not give rise to presumption of separate property because automobiles do not qualify as articles of personal nature under that statute; and (4) Wife did not execute either a written transmutation of the Porsche from community property to Husband’s separate property or written waiver of reimbursement right under California Family Code Section 2640(b). The Appellate Court has thus ruled that Trial Court erred by characterizing the Porsche as Husband’s separate property because automobiles do not qualify as tangible articles of personal nature under Section 852(c), and the Porsche could not be transmuted to Husband’s separate property absent written transmutation. The Appellate Court has concluded that Wife is entitled to reimbursement of her separate property contribution to acquisition of the Porsche under California Family Code Section 2640(b).

 

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