Brace v. Speier (In re Brace), 566 B.R. 13 (9th Cir. BAP 2017)
Brace v. Speier (In re Brace), 566 B.R. 13 (9th Cir. BAP 2017): Ninth Circuit Bankruptcy Appellate Panel (“BAP”) holds that California’s community property presumption prevails over the record title presumption in bankruptcy cases. BAP affirmed a ruling by the bankruptcy court holding that, where the avoidance of transfers of interests in real properties restored title to a married couple as joint tenants, California’s community property presumption (California Family Code § 760) (the “Community Property Presumption”) prevailed over California’s record title presumption (California Evidence Code § 662) (the “Record Title Presumption”). As a result, both the debtor’s and the non-debtor spouse’s interests in the recovered real properties were assets of the bankruptcy estate despite the couple’s arguments that either transmutation was not required with respect to a transfer from a third party, or that the taking of title as “joint tenants” was a sufficient transmutation of their interests in the real properties from community to separate property.