Estate of John Kenly, Deceased, Betty B. Kenly, Personal Representative - Page 16

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                  domiciled at the time the property so exchanged was                                     

                  Decedent was domiciled in Arizona at all times here                                     
            relevant, so that we must look to Arizona law to determine the                                
            applicable community property law.  If the Bard property was                                  
            community property under the laws of Arizona, or was acquired in                              
            exchange for property that was community property under the laws                              
            of Arizona, then it is community property under the laws of                                   
            California.  We must ascertain the law of Arizona as the highest                              
            court of the State would apply it.  Commissioner v. Estate of                                 
            Bosch, 387 U.S. 456, 465 (1967).                                                              
                  Under Arizona law, property acquires its character as                                   
            community or separate property at the time of its acquisition.                                
            Potthoff v. Potthoff, 627 P.2d 708, 712 (Ariz. Ct. App. 1981);                                
            Bender v. Bender, 597 P.2d 993, 995 (Ariz. Ct. App. 1979);                                    
            Myrland v. Myrland, 508 P.2d 757, 762 (Ariz. Ct. App. 1973).                                  
            Property received by one spouse as a gift is the separate                                     
            property of that spouse.  Ariz. Rev. Stat. Ann. sec. 25-211                                   
            (1991).  That ownership does not change except by operation of                                
            law or through an agreement between husband and wife.  Potthoff                               
            v. Potthoff, 627 P.2d at 712.  In certain cases, the character of                             
            a spouse's separate property may be changed to community property                             
            "if the circumstances clearly demonstrate that [that] * * *                                   
            spouse intended to effect a change in the status of his separate                              
            property."  Moser v. Moser, 572 P.2d 446, 448 (Ariz. Ct. App.                                 

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