Be careful who you gift to: case shows unique legal issue

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Unless you’re a huge basketball fan, chances are you were like a lot of Americans who had no idea who Donald Sterling was until quite recently when tapes were leaked to the press containing audio of Sterling making racist comments. The scandal turned into what could only be called a media circus, ultimately costing Sterling his ownership of the Los Angeles Clippers as well as a lifetime ban from the NBA.

The reason we’re bringing up Sterling in today’s blog post is because the 80-year-old man’s name is once again in the news but for different reasons. This time it’s because of a lawsuit his wife Shelly Sterling has filed against her husband’s assistant who Shelly claims received gifts that were purchased using marital assets. According to Shelly’s lawsuit, this was done so in violation of a section of the California Family Code. Shelly is now holding the assistant liable for the price of the gifts.

But according to the assistant’s attorney, the section of the family code Shelly is citing does not apply to third parties. Furthermore, the assistant claims that even though she had no formal written employment contract with Sterling, he had promised to “compensate [her] for her time in other ways.” Although it’s possible that the gifts Shelly is requesting in her lawsuit were intended to be compensation for employment, it will ultimately be up to the California Superior Court Judge Richard Fruin to decide.

Although the description of the case found on the Courthouse News Services website does not cite the specific section of the family code the Sterling is said to have violated, it’s possible that Shelly could be referring to Section 1100 which prohibits a spouse from making a gift of community personal property to a third party without the consent of the other spouse.

This case is significant to our San Francisco readers because it highlights an area of family law that most people are not familiar with. Because large gifts to other people can greatly reduce marital assets and therefore affect property division in the event of divorce, this section of the family code may be something some of our readers might want to consider. But even though we’ve pointed it out today, it’s still something worth discussing with an attorney as it can lead to complicated legal disputes as you can see exemplified by the Sterling case.

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