THE ATTORNEY'S CORNER: MAKING GIFTS OF COMMUNITY PROPERTY

By Stephen C. Ross, Esq.

Gifts of real and/or personal property may be used to achieve estate planning goals and minimize death taxes. However, in California, a married person cannot make a gift of community personal property, or dispose of such property for less than fair and reasonable value, without obtaining the written consent of the other spouse. Community real property, with the exception of short-term leases, cannot be transferred or encumbered by a spouse unless the other spouse joins in the deal. Written spousal consent should be obtained for gifts made to children and others under the California Uniform Transfer to Minors Act.

One exception to the spousal consent rule is that neither written consent nor joinder is necessary if both spouses make a mutual gift to a third party, or one spouse makes a gift of community personal property to the other.

A gift made by a married person without obtaining the express consent of the other spouse is a voidable gift. In other words, a unilateral gift transaction by a married person may be set aside or declared void by a legal action brought by the non-consenting spouse or that spouse’s successors. In addition, a non-consenting spouse may seek remedies for breach of spousal fiduciary duties against the spouse making the unilateral gift.

California recognizes domestic partnerships. The California Family Code provides, except as otherwise provided by statute, real and personal property acquired by a person in a domestic partnership during the domestic partnership and while domiciled in California is community property. Because domestic partners can acquire community property in California, the rules concerning community property gifts apply to domestic partners.

Stephen represents estate planning, trust, will, probate, trust administration, business formation, stepparent adoption and family law matters. He conducts estate planning and probate seminars throughout San Diego County. For more information or to schedule a seminar contact Stephen at (619) 795-8524, stephen@stephenrosslaw.com or visit www.stephenrosslaw.com.

Disclaimer: Information contained in this article is believed to be accurate. However, you should seek professional legal advice before relying on the information. Stephen is not licensed to practice law in any state other than California and “The Attorney’s Corner” is not intended as an advertisement.

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