Just In Time for The Holidays: When Is That Porsche With The Big Red Bow NOT A Gift?

Ms. Buie was married to Mr. Neighbors. Ms. Buie had previously sold a piece of real estate, and had some money in the bank, so shortly before Mr. Neighbors' birthday, she allowed him to take $60,000 of that money and buy himself a Porsche. . . . . . or so he thought.

As a California court has already observed, ". . . divorce unsettles many of the parties' significant plans and assumptions, no matter how carefully crafted. . ."*

There was, you see, apparently no writing from Buie to Neighbors saying something like "Here is my gift to you!", or if there was, nobody could find it by the time Buie and Neighbors got to court.

California law requires that there be a writing for such a "transmutation" of community property to separate property, except as to a

". . . gift between the spouses of clothing, wearing apparel, jewelry, or other tangible articles of a personal nature that is used solely or principally by the spouse to whom the gift is made and that is not substantial in value taking into account the circumstances of the marriage." **

The trial court said "Gift!", perhaps reasoning that a Porsche was, for a middle-aged husband in Southern California, of a "personal nature", the way clothing or wearing apparel or jewelry is for a middle-aged wife. He would, after all, no more expect her to drive his Porsche than he'd expect her to let him wear her fur coat and diamond earrings.

Not so fast, said the Court of Appeal. The legislative comments to the 1984 enactment of F.C. 852 were fairly explicit that an automobile isn't "a tangible article of a personal nature". In the absence of a writing, there's no gift transmutation of the car from community to Mr. Neighbor's separate property. Even more dismaying for him, since the money used was traceable to Ms. Buie's separate property house proceeds, and she also had never made a written waiver of her right of reimbursement, she was entitled to be reimbursed for her contribution, up to the remaining equity in the car. The car was in essence, all hers, not all his.

If you find a car in your driveway this month, with a card from your spouse on it, save, treasure and keep that card!


* Marriage of Destein (2001)
**California Family Code Sec. 852

Divorce and Social Security

A quick explanation, from the Wall Street Journal, of divorce and Social Security benefits.

McCourts: Minding (And Dividing) The Family Store

Jamie McCourt has now filed her action for dissolution, along with a request for somewhere between $300,000 and $500,000 per month in spousal support (depending on whether she immediately gets back all her perks of being a Dodgers co-owner) and about two and a half million dollars in attorney fees and litigation costs.

What's interesting about this case, beyond the usual tabloid stuff, is that it involves almost all of the issues any married couple in business together faces when the marriage goes bad.

The questions aren't that different from those which have to be answered if the McCourts together had purchased and operated, let's say, a sandwich franchise, except that there's a much longer string of zeros after all the numbers, which makes it worthwhile to take a long hard look at the issues, rather than just sort of "washing them out". If either of them wants to air the dirt, as it appears that both may be in the process of doing, their employees, and their business competitors, are of course watching from the sidelines.

To the extent that either airs dirt, and the business suffers, there then will arise the equally interesting question of who it is (to mix metaphors) who killed the golden-egg-laying goose. Since California spouses have an ongoing fiduciary duty to their spouses, and to the community, NOT to kill the golden goose, if each takes a drumstick and pulls hard, it'll take a lot of sorting out to find the cause of goosey's death.

Kim Kardashian Agrees With Me: Get a Pre-marital Agreement!

I just couldn't resist writing the headline. Here's the story.