What other actions can you take if your spouse makes a gift of community property without your consent?
We've already discussed the possibility of having a gift of community property set aside if it was made without your consent; however, you may also be able to bring a claim against your spouse for "breach of spousal fiduciary duty." The relevant code section is California Family Code Section 1101, which states the following:
(a) A spouse has a claim against the other spouse for any breach of the fiduciary duty that results in impairment to the claimant spouse’s present undivided one-half interest in the community estate, including, but not limited to, a single transaction or a pattern or series of transactions, which transaction or transactions have caused or will cause a detrimental impact to the claimant spouse’s undivided one-half interest in the community estate.
(b) A court may order an accounting of the property and obligations of the parties to a marriage and may determine the rights of ownership in, the beneficial enjoyment of, or access to, community property, and the classification of all property of the parties to a marriage.
(c) A court may order that the name of a spouse shall be added to community property held in the name of the other spouse alone or that the title of community property held in some other title form shall be reformed to reflect its community character, except with respect to any of the following:
(1) A partnership interest held by the other spouse as a general partner.
(2) An interest in a professional corporation or professional association.
(3) An asset of an unincorporated business if the other spouse is the only spouse involved in operating and managing the business.
(4) Any other property, if the revision would adversely affect the rights of a third person.
(d) (1) Except as provided in paragraph (2), any action under subdivision (a) shall be commenced within three years of the date a petitioning spouse had actual knowledge that the transaction or event for which the remedy is being sought occurred.
(2) An action may be commenced under this section upon the death of a spouse or in conjunction with an action for legal separation, dissolution of marriage, or nullity without regard to the time limitations set forth in paragraph (1).
(3) The defense of laches may be raised in any action brought under this section.
(4) Except as to actions authorized by paragraph (2), remedies under subdivision (a) apply only to transactions or events occurring on or after July 1, 1987.
(e) In any transaction affecting community property in which the consent of both spouses is required, the court may, upon the motion of a spouse, dispense with the requirement of the other spouse’s consent if both of the following requirements are met:
(1) The proposed transaction is in the best interest of the community.
(2) Consent has been arbitrarily refused or cannot be obtained due to the physical incapacity, mental incapacity, or prolonged absence of the nonconsenting spouse.
(f) Any action may be brought under this section without filing an action for dissolution of marriage, legal separation, or nullity, or may be brought in conjunction with the action or upon the death of a spouse.
(g) Remedies for breach of the fiduciary duty by one spouse, including those set out in Sections 721 and 1100, shall include, but not be limited to, an award to the other spouse of 50 percent, or an amount equal to 50 percent, of any asset undisclosed or transferred in breach of the fiduciary duty plus attorney’s fees and court costs. The value of the asset shall be determined to be its highest value at the date of the breach of the fiduciary duty, the date of the sale or disposition of the asset, or the date of the award by the court.
(h) Remedies for the breach of the fiduciary duty by one spouse, as set forth in Sections 721 and 1100, when the breach falls within the ambit of Section 3294 of the Civil Code shall include, but not be limited to, an award to the other spouse of 100 percent, or an amount equal to 100 percent, of any asset undisclosed or transferred in breach of the fiduciary duty.
As a summary, the code section above provides a few different remedies in the event of a breach of spousal fiduciary duty.
The court could:
- Order an accounting of the property at issue,
- Determine ownership rights of the community property asset, or
- Determine the classification of all property in the marriage. See Family Code Section 1101(b), above.
Moreover, if your spouse makes a gift of community property without your consent, a court could award you 50% of the asset (or the value of the 50%) plus attorneys fees and court costs.
One caveat, however, is in Section 1101(e), which states: "In any transaction affecting community property in which the consent of both spouses is required, the court may, upon the motion of a spouse, dispense with the requirement of the other spouse’s consent if both of the following requirements are met: (1) The proposed transaction is in the best interest of the community. (2) Consent has been arbitrarily refused or cannot be obtained due to the physical incapacity, mental incapacity, or prolonged absence of the nonconsenting spouse." Therefore, if the transfer of community property was in you and your spouse's best interest and your consent wasn't refused arbitrarily or if you were unable to consent due to an above-mentioned condition, then the Court may not require consent.
Transfers of community property can be a thorny subject, and as a result, it is best if both spouses consent to the transfer.