The most important tax aspect of a transmutation agreement is the effect it has on the basis of steps (or step-down) to death. If the spouses had kept the property separately in a common rent with a right of reversion, the surviving spouse would automatically receive half of the property by the original common rent title and not by inheritance or any other type of estate after death. Therefore, its base would not be increased if the property estimated, but would remain on the initial cost basis. However, transmutation can change the character of the property acquired during the marriage. “Transmute” means separating or altering the characterization of community property. The Family Code, Section 850, allows married persons to encircle property and section 852 of the family code defines the terms of a valid transmutation. Since a party is disadvantaged by a conversion agreement by completely or partially renouncing its interest in the property, the agreement must be expressly signed in writing by the party concerned and concluded without undue influence. The Family Code contains a number of specific provisions designed to ensure that both parties are fully aware of the agreement they are reaching and that both parties freely enter into the agreement. Managing the distribution of real estate during divorce can be extremely difficult. Our lawyers have years of experience in divorce cases, and we are here to help. Call us today or email us to arrange your free consultation with one of our divorce lawyers in Irvine. Estate planning lawyers generally recommend that couples separate into condominiums. One of the advantages is that the surviving spouse benefits from a more advantageous tax base for condominiums.

When a spouse dies, his co-ownership is transferred to the surviving spouse and the property is estimated from the anniversary of the death of the deceased spouse. If the surviving spouse decides not to sell the marital home long after his widow or widower, he or she is unlikely to pay capital gains from the sale. Do you think you have a transmutation agreement during your marriage? Or aren`t you sure it`s valid? Here at Mello-Pickering, LLP, we can help you develop a strong case for your property rights acquired during the marriage and your separate property.