Gibson v. Gibson
301 Ga. 622
Ga.2017Background
- Husband (Stewart) created two irrevocable trusts (GF Trust in 2008, SLG Trust in 2012) naming his mother as trustee and wife/daughter among beneficiaries; Husband was neither trustee nor beneficiary.
- Between 2010–2013 Husband transferred about $3.2 million (bank and brokerage accounts, life insurance, LLC interest) into the Trusts.
- Wife filed for divorce in July 2014 and alleged conversion and fraudulent transfer, seeking inclusion of the Trust assets in equitable distribution.
- Trial court found $2.2 million marital and dismissed Wife’s fraudulent-transfer and conversion claims, concluding transfers were not fraudulent and trustee had dominion and control; two Schwab accounts, however, listed Husband as trustee due to alleged administrative error.
- On appeal, Supreme Court affirms most rulings but holds transfers of two Charles Schwab brokerage accounts were ineffective under OCGA § 53-12-25(a) because accounts listed Husband (not the trustee) as legal titleholder, and remands for redistribution including those accounts.
Issues
| Issue | Wife's Argument | Husband's Argument | Held |
|---|---|---|---|
| Whether property placed in trusts by one spouse during marriage is marital property per se | Trust corpus placed during marriage without Wife's knowledge/consent remains marital property | Property conveyed to a third party (non-beneficiary settlor) is exempt from equitable division absent fraud | Property in these trusts is not marital property unless transfers were fraudulent (affirmed) |
| Whether Husband's transfers were fraudulent transfers under Georgia UFTA | Transfers were made with actual intent to hinder/delay/defraud Wife; spousal confidential relationship makes omissions fraudulent as a matter of law | No actual intent to defraud; badges of fraud (concealment, insolvency, retention of control, absconding) do not exist here | Trial court’s factual finding of no fraudulent intent is supported by evidence and affirmed |
| Whether transfers to the Trusts were ineffective for failure of delivery/acceptance or lack of trustee approval | Trustee’s testimony of unawareness means transfers were incomplete under trust terms, delivery law, and Georgia gift law | Trial court credited attorney and other evidence that trustee approved/accepted transfers; lack of trustee recollection was discredited | Trial court’s credibility-based acceptance of evidence showing trustee’s approval was not clearly erroneous (affirmed) |
| Whether accounts titled in Husband’s name as trustee satisfied OCGA § 53-12-25(a) (legal title to trustee required) | Titling accounts in Husband’s name as trustee made transfers ineffective; statute requires legal title in trustee | Husband’s intent and tax ID on account show trust ownership; statutory requirement should not defeat intent | Statute’s plain language requires legal title to be in trustee; transfers of the two Schwab accounts were ineffective and those assets must be included in equitable division (reversed on this point; remanded) |
Key Cases Cited
- Armour v. Holcombe, 288 Ga. 50 (property conveyed to third party exempt from equitable division absent fraudulent transfer)
- McGinn v. McGinn, 273 Ga. 292 (trust corpus not subject to spouse’s distribution claim when settlor is not sole beneficiary)
- Speed v. Speed, 263 Ga. 166 (self-settled trusts where settlor is sole beneficiary may be treated differently)
- Highsmith v. Highsmith, 289 Ga. 841 (distinguishing legal vs. factual questions in marital vs. non-marital classification)
- McDonald v. McDonald, 289 Ga. 387 (appellate review deference to trial court credibility and factual findings)
- Murray v. Murray, 299 Ga. 703 (confidential spousal relationship and duty of candor regarding divorce-related agreements)
- Beller v. Tilbrook, 275 Ga. 762 (spousal confidential relationship can support fraud findings in certain contexts)
- Adair v. Adair, 220 Ga. 852 (obligations of candor in divorce-related documents/transactions)
- SRB Inv. Svcs., LLLP v. Branch Banking & Trust Co., 289 Ga. 1 (existence of actual intent to defraud is a question for the factfinder)
- Lewis v. Lewis, 210 Ga. 330 (transfers made to defeat spouse’s alimony claim present jury question on intent)
- Rose v. Waldrip, 316 Ga. App. 812 (construction and temporal application of OCGA § 53-12-25 and impact on self-settled trusts)
- Ford v. Reddick, 319 Ga. App. 482 (OCGA § 53-12-25 requires trustee be designated as grantee for conveyance of legal title)
- Pina v. Pina, 290 Ga. 878 (not dispositive here — addressed equitable distribution of home and increase in value, not trust corpus inclusion)