This is yet another pop quiz that looks at how Washington courts apply our state’s community property laws to specific individuals and their unique stories. To recap: Washington is a community property state, which generally means that all property that a couple acquires during their marriage is presumed to be jointly owned by both spouses, while all property acquired before (or after) marriage is considered to be separate property. Although these rules seem pretty clear in black and white, in real life it can be quite difficult to determine which property is community and which is separate. The Borghi case provides one example of how the line between “separate” and “community” can be easily blurred.
In 1966, Jeanette Borghi purchased a piece of property under a real estate contract. About nine years later, she married Robert Borghi. Shortly after their marriage, a development company issued a special warranty deed for the property to “Robert G. & Jeanette L. Borghi, husband and wife.” Jeanette and Robert lived together on the property for 15 years, and at one point took out a mortgage on the property so that they could purchase a mobile home.
In June of 2005, Jeanette died without having executed a will stating her wishes for the distribution of her property. She had two heirs: Robert, and Arthur Gilroy, her son from a previous marriage. The estate went into probate with Robert acting as the personal representative. Robert asked the court to determine whether or not the property was community property. If the property was considered community, then it would pass to Robert. If not, Arthur was entitled to a one-half share in the property.
The probate court ruled that the property was community. Arthur appealed, arguing that the property was the separate property of his mother. The Court of Appeals “reluctantly” agreed with him. Robert (or rather, Robert’s estate as Robert passed away in 2006 before a final determination was made) then appealed that decision.
The issue before the Supreme Court of Washington on appeal was this: “whether the real property acquired by Jeanette Borghi prior to her marriage to Robert Borghi changed in character from her separate property to community property by the time of her death.” Specifically, the Supreme Court had to determine whether the 1975 deed that included both Robert’s and Jeanette’s names changed the character of the property from separate to community.
Robert argued that the inclusion of his name on the deed created a presumption that Jeanette intended to make a gift of her separate property to the community. Arthur argued that the deed was insufficient evidence of his mother’s intention to convert her separate property to community property.
A. The Supreme Court ruled that because Robert’s name was on the 1975 deed, the court had to presume that Jeanette made a gift of her separate property to the community, making Robert and her equal owners of the property. If Jeanette had intended to keep the property separate, the deed would have been in Jeanette’s name only.
B. The Supreme Court ruled that a deed in both parties’ names was not sufficient evidence that Jeanette intended to change the character of her separate property. Because there are many reasons why it would make good business sense for spouses to create joint title that have nothing to do with any intent to community property, the court could not presume that a change in title was evidence of intent to change the character of separate property. Thus, the property had to be presumed to be the separate property of Jeanette.
C. The Supreme Court ruled that a deed in both parties’ names was not sufficient evidence that Jeanette intended to change the character of her separate property. Additional evidence was required to show Jeanette’s intent. The court remanded the case to the Superior Court to evaluate whether there was other sufficient evidence of Jeanette’s intentions regarding the property.
The right of the spouses in their separate property is as sacred as is the right in their community property, and when it is once made to appear that property was once of a separate character, it will be presumed that it maintains that character until some direct and positive evidence to the contrary is made to appear. In re Estate of Borghi, 167 Wn2d 480 (2009).
The Supreme Court ruled that the deed was not sufficient evidence of an intention to change the character of Jeanette’s property from separate to community. The Court, stating that “courts will not be bound by the terms of the deed but will look beyond it and ascertain, if possible, the true intent and purpose of the parties.” Absent some other written and signed document indicating that Jeanette desired to transfer the property to community ownership, the Court had to presume that the property retained its separate character up until Jeanette’s death.
So what kind of writing could have satisfied the Court that Jeanette wanted to gift her separate property to the community? The Court pointed out that there are at least two ways that a spouse can convert separate property into community property. The first way is to execute a quit claim deed transferring property to the community. The second is to enter into a community property agreement which generally converts all existing and future property of both spouses into community property. And, the court noted that a spouse could “otherwise in writing evidence his or her intent” to make a gift of separate property to the community.
You can read the full Borghi opinion here.