A transmutation agreement is a written agreement between married persons that changes the character of property owned by one of the parties, or by the parties jointly, during marriage.
For example, if one party owns a home before marriage and wants to put it in both parties’ names after marriage, a written transmutation agreement ensures that the final result is what the parties actually intended. Does the transfer convey only the future appreciation of the property (the probable result without an agreement stating otherwise), or was the intent to transfer a present equitable interest?
Surprisingly, in California, what is commonly thought of as a gift between spouses, such as a car or a transfer of an interest in corporate stock, may not in fact transfer any equitable interest without a written transmutation agreement that complies with the complex rules imposed by statute and California case law.
Because the law in this area is complex and difficult, a transmutation agreement should be tailored to each party’s particular circumstances and prepared by an attorney with genuine expertise in California family law.