Gibson (Wife) appeals from the trial court's order
granting her requested divorce from Stewart Gibson (Husband).
She argues that the trial court erred by excluding from the
marital estate approximately $3.2 million in assets that
Husband previously had placed into two trusts. Wife argues
that exclusion of the trust assets was erroneous because (1)
property placed in trust by one spouse without the
other's knowledge and consent remains marital property;
(2) Husband's transfer of assets into the trusts was
fraudulent; and (3) Husband failed to transfer properly the
assets in question into the trusts. Contrary to Wife's
argument, trusts like those here are exempt from equitable
division absent a finding of fraud. Because the trial
court's finding that Husband's transfers of assets
into the trusts were not fraudulent is supported by evidence
in the record, we affirm the trial court's rejection of
Wife's fraudulent transfer claim. Wife's other claims
are unavailing, as well, with one exception: we agree with
her that transfers of the contents of two brokerage accounts
into the trusts were ineffective under OCGA § 53-12-25
(a) because the accounts erroneously listed Husband as
trustee. We therefore remand for the trial court to
redistribute the marital assets, including the assets in
those two accounts.
and Wife were married in 1993 and had one child, born in
2004. Husband and Wife had a rocky marriage and began
sleeping separately following their daughter's birth.
Husband testified that, although Wife threatened to divorce
him many times, he never took her threats seriously and did
not consider them to be separated until she actually filed
for divorce in 2014.
litigation concerns two trusts created by Husband. In March
2008, Husband created an irrevocable trust, the Gibson Family
Trust (the "GF Trust"), naming his mother, Julia
Gibson, as trustee and Wife, their daughter, and their
daughter's descendants as beneficiaries. The terms of the
trust gave the trustee the discretion to distribute income
and principal to Wife and their daughter during Husband's
life and in the event of his death, and stripped Wife of her
rights and interests in the trust if Husband and Wife
divorced or legally separated. The trust also provided
certain rights of withdrawal to the Gibsons' child or her
legal guardian. In July 2012, Husband created a second
irrevocable trust, the SLG Trust, again naming his mother as
trustee, and naming multiple beneficiaries, including his
spouse and his descendants. The trust gave all beneficiaries
a right of withdrawal subject to certain limits. Between 2010
and 2013, Husband purported to place approximately $3.2
million worth of assets, including bank and brokerage
accounts, life insurance policies, and an ownership interest
in a certain entity, S. Gibson Properties LLC, into the GF
Trust and SLG Trust ("the Trusts") collectively.
Husband was neither a trustee nor a beneficiary of either
filed for divorce in July 2014. In her petition, as amended,
Wife raised a conversion claim against Husband and fraudulent
transfer claims against Husband and the trustee of the
Trusts. Wife claimed that the conveyances to the
Trusts were fraudulent because they were made with the intent
to hinder, delay, or defraud Wife in the event of divorce. At
the six-day bench trial, Husband testified that the GF Trust
was set up for liability protection purposes and for the
benefit of his daughter. Husband testified that he and Wife
never discussed financial matters. The undisputed trial
testimony was that Wife did not know about the Trusts or her
beneficiary status under them until she filed for divorce,
save for an envelope bearing the name of the GF Trust that
she saw earlier in 2014; Husband told her it was "for
the trial, the trial court found that $2.2 million in assets
was marital property subject to equitable distribution. The
court involuntarily dismissed Wife's fraudulent transfer
and conversion claims, denying her request that the
additional $3.2 million in assets placed in the two Trusts be
subjected to equitable division. The trial court found that
Husband and Wife did not have a confidential relationship
because they did not maintain joint financial accounts or
share financial information. The court found that Husband did
not form or fund the Trusts at a time when he knew Wife was
contemplating divorce or with actual intent to defraud her,
that he did not actively conceal the transfers from Wife, and
he delivered dominion and control of the assets to the
trustee before Wife filed for divorce. The court also found
that, although two Charles Schwab accounts purportedly in the
Trusts listed Husband as trustee, this was due to the
brokerage firm's administrative error, and Husband
demonstrated his intention to convey the assets to the Trusts
because he listed the Trusts' federal tax identification
numbers on the accounts. Wife filed an application for
discretionary appeal, which we granted.
reviewing a bench trial, we view the evidence in the light
most favorable to the trial court's rulings, defer to the
trial court's credibility judgments, and will not set
aside the trial court's factual findings unless they are
clearly erroneous. McDonald v. McDonald, 289 Ga.
387, 387 (1) (711 S.E.2d 679) (2011); Bloomfield v.
Bloomfield, 282 Ga. 108, 108 (646 S.E.2d 207) (2007).
"It is a question of law for the court whether a
particular category of property may legally constitute a
marital or non-marital asset, but whether a particular item
of property actually is a marital or non-marital asset may be
a question of fact for the trier of fact." Highsmith
v. Highsmith, 289 Ga. 841, 842 (1) (716 S.E.2d 146)
(2011) (citation and punctuation omitted); see also
Bloomfeld, 282 Ga. at 108 (1) (factual finding as to
whether a particular item is marital or non-marital property
must be upheld if supported by any evidence).
trial court's involuntary dismissal of Wife's
fraudulent transfer and conversion claims pursuant to OCGA
§ 9-11-41(b) may be reversed only if "the evidence
demands a contrary finding." Smith v. Ga. Kaolin
Co., 269 Ga. 475, 476 (1) (498 S.E.2d 266) (1998)
(citation and punctuation omitted).
argues that the trial court erred in failing to classify the
trust assets as marital assets, contending that the assets
are subject to equitable distribution irrespective of any
fraud on the part of Husband. She also argues that
Husband's actions amounted to fraud as a matter of law.
As an alternative basis for reversal, Wife argues that for a
host of reasons Husband did not legally deliver the assets to
the trustee before Wife filed for divorce.
Property in the Trusts is subject to equitable division
only if Wife can show that the transfers into the
Trusts were fraudulent.
first argues that, irrespective of Husband's motives, the
property in the Trusts are marital property because he placed
the property in trust during the marriage without her
knowledge and consent. Saying the matter is an issue of first
impression for this Court, Wife cites decisions from other
states for the proposition that other jurisdictions routinely
construe marital assets placed in trust as marital property
subject to equitable division in a divorce proceeding.
is not an issue of first impression for our Court, which has
permitted property placed in certain types of trusts to be
exempt from equitable division. "The law of contracts
and titles is respected in divorce cases." Armour v.
Holcombe, 288 Ga. 50, 52 (701 S.E.2d 169) (2010).
Therefore, property that has been conveyed to a third party
is not subject to equitable division absent a showing of
fraudulent transfer. See id. If a spouse places property in a
trust of which he is the sole beneficiary, that property may
be subject to equitable division. See Speed v.
Speed, 263 Ga. 166 (430 S.E.2d 348) (1993). But if a
spouse is not the sole beneficiary of a trust, the corpus of
the trust is not subject to the other spouse's claim of
distribution. See McGinn v. McGinn, 273 Ga. 292, 292
(540 S.E.2d 604) (2001).
Husband is not a beneficiary of the Trusts at all. He is not
a trustee of the Trusts. Therefore, for equitable division
purposes, the transfers of property to the Trusts were the
equivalent of transfers to a third party, such that the
property is subject to equitable division only if Wife can
show that the transfers were fraudulent.
The trial court's rejection of Wife's fraudulent
transfer claim is supported by evidence in the
end, Wife argues that Husband's actions in placing the
assets in question in trust amounted to fraud. She relies on
our case law emphasizing the "confidential
relationship" between spouses, saying this means that
Husband's failure to tell her about the transfers made
those transfers fraudulent as a matter of law. See Murray
v. Murray, 299 Ga. 703, 705 (791 S.E.2d 816) (2016);
Beller v. Tilbrook, 275 Ga. 762, 762-763
(3) (571 S.E.2d 735) (2002); Adair v. Adair, 220 Ga.
852, 855 (1) (142 S.E.2d 251) (1965). In finding that there
is generally a confidential relationship between spouses, we
have relied in part on OCGA § 23-2-58, which provides
Any relationship shall be deemed confidential, whether
arising from nature, created by law, or resulting from
contracts, where one party is so situated as to exercise a
controlling influence over the will, conduct, and interest of
another or where, from a similar relationship of mutual
confidence, the law requires the utmost ...