Disclaimer Deed rebuts community property presumption

by Annette Burns on November 16, 2007

The Court of Appeals found that a properly-executed Disclaimer Deed rebuts the presumption that property acquired during marriage is community and overturns a trial court’s finding that property acquired in Wife’s name during the marriage was community. Bell-Kilbourn v. Bell-Kilbourn, 1-CA-CV-07-0068    Download BellKilbourn.pdf

In order to purchase a home during the marriage, the parties applied for credit solely in Wife’s name to maximize their chances of getting a mortgage loan. The down payment for the purchase was provided by the seller, which was repaid to the seller from the loan proceeds. The house was acquired in Wife’s name as her separate property, and Husband executed a disclaimer deed renouncing his interest in the property. The property mortgage was then paid from community funds until the dissolution action was filed.

Note that in the Bell-Kilbourn facts, it’s made clear that no community funds were used to purchase the property.  The down payment funds were advanced by the seller, and the seller was repaid when the loan (solely in Wife’s name) was funded. Would this decision have been different if the down payment funds came from community property?  If that were the case, would additional evidence showing "contemporaneous conduct indicating an intent" to convey a community property interest  (as required by In re Sims’ Estate) be required?

Citing Bender, the Court of Appeals concluded that the disclaimer deed was valid and governed the agreement between the parties. As the parties agreed that community funds were used to pay the mortgage on the home, an analysis pursuant to Honnas and Drahos to determine the community lien on the residence was appropriate. The case was remanded for that determination.

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