Posts tagged gift
What is the terminology associated with a Will?

One of the most challenging parts for people unfamiliar with the estate planning process is the specific vocabulary used to talk about each of the documents involved in an estate plan.

In this post, we'll cover some of the words associated with the creation of a Will to help you be more conversant with your estate planning lawyer.

  1. "Testator" - This is the person who makes a Will. 
  2. "Gift", "Bequest", or "Devise" - These words are used interchangeably, and they all refer to property that you would like to give away at the time of your death. Thus for example, you might tell your estate planning lawyer, "I would like to make a bequest of $1,000 to my niece, Sally, when I pass away."
  3. "Codicil" - From time to time, you may need to revise or amend your Will without rewriting the Will entirely. You can do this by creating a codicil to your Will.
  4. "Executor" - This is the person that you name in your Will to carry out the tasks of collecting your assets, paying off your debts, and distributing your property to your beneficiaries.

A Will is amendable and revocable up until the time of death. A "Will" also includes the original Will and all Codicils to it.

How do I protect gifts to children or others from attack?

It's not unusual for parents to make gifts to their children. Sometimes these gifts are made to custodial accounts under the California Uniform Transfers to Minors Act. Many times these gifts are made by one spouse or the other without much thought to the premise that the gifting spouse assumes the other spouse would consent (or the dollar amount isn't really worth fighting over).

While it is true that gifts made by both spouses mutually don't require consent, some might consider taking an extra precautionary step of documenting that consent when making a gift to to a minor child (or other third party for that matter) in order to prevent one spouse from claiming lack of consent to the gift.

How do you ensure you got consent?

Simple, just obtain a document which contains the other spouse's written agreement to make the gift to the third party. Having this in writing can not only make sure that you and your spouse are on the same page, but it will also ensure that the gift remains valid and not subject to later attack.

With statistics showing that disagreements about money is a leading cause of divorce, it may even even help to foster a healthier marital relationship.

When is your spouse's consent not required for gifts of community property?

There are some exceptions to the general rule that your spouse must provide consent when you make gifts of community property. 

Situations Where Spousal Consent Isn't Required

  1. Both spouses are mutually making a gift of community personal property to a third party.
  2. The third party pays for the community personal property at a fair and reasonable value.
  3. The gift of community personal property is to the other spouse.

Void vs. Voidable Gift

What about community property gifts that your spouse made in the past without your consent?

In general, a gift that your spouse makes without your consent is considered a "voidable" (not "void") gift. That means you could technically bring a legal action to set aside or have the gift declared void, but that the gift itself is not void without any further action. If you're spouse is still alive, you could void the gift in its entirety, whereas, once your spouse passes away, you may only void the gift up to your one-half community property interest.

Sometimes, people run afoul of this rule without thinking much about it because the item of community property being given away is of nominal value or because it's not worth the effort to enforce one's community property interest in a certain item.

However, the underlying principal generally applies to all gifts of community property, so it's important to keep these rules in mind when one spouse tries to gift assets that are valuable.

When does your spouse need consent to give gifts?

Generally, a person is free to give away property that he or she owns. However, in so-called "community property" states such as California, one cannot gift his or her community property without the consent of the other spouse.

Community Property

Let's first start with the definition of what "community property" is. For this, we turn to California Family Code Section 760, which states:

Except as otherwise provided by statute, all property, real or personal, wherever situated, acquired by a married person during the marriage while domiciled in this state is community property.

A married person's salary or wages is one of the most common examples of community property. After you get married, every dollar you earn, unless you have some sort of marital agreement, is considered community property, and community property is considered jointly owned between two spouses.


California Family Code Section 1100(b) and 1102(a) describe restrictions around the gifting of community personal property and community real property:

1100(b): A spouse may not make a gift of community personal property, or dispose of community personal property for less than fair and reasonable value, without the written consent of the other spouse. This subdivision does not apply to gifts mutually given by both spouses to third parties and to gifts given by one spouse to the other spouse.

1102(a): Except as provided in Sections 761 and 1103, either spouse has the management and control of the community real property, whether acquired prior to or on or after January 1, 1975, but both spouses, either personally or by a duly authorized agent, must join in executing any instrument by which that community real property or any interest therein is leased for a longer period than one year, or is sold, conveyed, or encumbered.

Living in a community property state such as California presents interesting challenges, as well as benefits when it comes to estate planning. As such it is important to explain the nature of the assets you own to your estate planning lawyer so that he or she may account for them appropriately.