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The Nexus Between Joint Tenancy Property and Bankruptcy

| Jul 24, 2020 | Landlord-Tenant |

The California Supreme Court grappled with the issue over joint tenancy property, when one of the spouses files for bankruptcy protection. As you likely are aware, California is a Community Property state and there is a presumption that property acquired during a marriage is part of the community. When one of the spouses filed for bankruptcy protection, the court needed to determine the characterization of the property, which was held as a joint tenancy asset.

The California Supreme Court held that the community property presumption is superior to title, when the two issues conflict; when community funds are used to purchase an asset, the presumption is that the asset is community property under the family code and a dispute between the couple and the bankruptcy trustee arises; and when community funds are used to purchase an asset, the title of the asset is not sufficient evidence to convert presumed community property into separate property.