How Long After an Interspousal Transfer Agreement Can the Property Be Deeded Back to the other Spous
Full Question:
Answer:
If she signed a interspousal transfer agreement for this property, therefore she, according to California Code 2580 transmuted community property to separate property. An interspousal transfer grant deed is used to transfer real property between spouses so the property is not reassessed for tax purposes, and may be used to convert community property into separate property. It is sometimes used when one spouse suffers credit problems that adversely impact the other spouse when trying to obtain financing. Retransfering the property may raise the issue of a fraudulent conveyance, as well as subject the property to reappraisal. I suggest contacting a local real estate attorney who can review al lthe facts and documents involved.
The elements of a fraudulent conveyance transfer are defined as follows by the Uniform Fraudulent Transfer Act:
(a) A transfer made or obligation incurred by a debtor is fraudulent as to a creditor, whether the creditor's claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation:
(1) with actual intent to hinder, delay, or defraud any creditor of the debtor; or
(2) without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor:
(i) was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction; or
(ii) intended to incur, or believed or reasonably should have believed that he [or she] would incur, debts beyond his [or her] ability to pay as they became due.
We suggest reading the terms of the loan carefully, as it may contain a due-on-sale clause, in which case a transfer may accelerate the full balance of the loan being due.
Please see the following CA statutes:
§ 850 Fam.
Subject to Sections 851 to
853, inclusive, married persons may by
agreement or transfer, with or without consideration, do any of the
following:
(a) Transmute community property to separate property of either
spouse.
(b) Transmute separate property of either spouse to community
property.
(c) Transmute separate property of one spouse to separate property
of the other spouse.
§ 851 Fam.
A transmutation is subject to the laws governing fraudulent
transfers.
§ 852 Fam.
(a) A transmutation of real or personal property is not valid
unless made in writing by an express declaration that is made, joined
in, consented to, or accepted by the spouse whose interest in the
property is adversely affected.
(b) A transmutation of real property is not effective as to third
parties without notice thereof unless recorded.
(c) This section does not apply to a gift between the spouses
of clothing, wearing apparel, jewelry, or other tangible articles of a
personal nature that is used solely or principally by the spouse to
whom the gift is made and that is not substantial in value taking
into account the circumstances of the marriage.
(d) Nothing in this section affects the law governing
characterization of property in which separate property and community
property are commingled or otherwise combined.
(e) This section does not apply to or affect a transmutation
of property made before January 1, 1985, and the law that would
otherwise be applicable to that transmutation shall continue to
apply.
