Ex-wife of former Clippers owner can recoup gifts to his mistress

This week, the unfortunate drama continued in the divorce of former LA Clippers owner Donald Sterling. You may recall Sterling from last April, when a damaging recording of him making racist statements was released to the public. On the now-infamous recording, Sterling is heard berating his female friend, V. Stiviano, for associating with African-Americans and exhorting her not to invite minority guests to games. As a result, the NBA banned Sterling from owning a league franchise for life, forcing him to sell the Clippers. He had owned the franchise for 33 years.

The events apparently also prompted Shelly Sterling to file for divorce. She characterizes Stiviano as "a conniving mistress" who manipulated Donald Sterling into lavishing her with gifts before setting him up for his downfall by releasing the recording. Stiviano asserts that the recording was leaked to the media by a friend and that she was merely the friend, confidant and personal assistant of an extremely wealthy and generous man.

Whatever the truth of that relationship, the gifts Stiviano received were substantial: a $1.8-million house, three luxury cars, and more than a million dollars in cash for living expenses and miscellaneous purchases.

How are sizable gifts to third parties handled during property division?

When a couple divorces, each spouse is entitled to a fair share of the marital estate. In California, each spouse's share is presumed to be equal. Here in Maryland, a court would determine each spouse's share on the basis of "equity," but the issue remains the same.

To put it simply, the marital estate is the property that belongs to both spouses, as opposed to separate property, which clearly belongs to only one. Property that could be considered separate, for example, might be an inheritance that was clearly intended for only one of the spouses. A business might be considered separate if it were founded by one spouse before the marriage (which is not the case here), but some of the income from that business, along with any increase in value, is likely to be considered part of the marital estate.

Once divorce is on the table, each spouse has a duty to preserve the marital estate, which includes refraining from making significant gifts to third parties.

A judge in Los Angeles ruled Tuesday that Shelly Sterling is entitled to an additional $2.6 million -- including title to the house Donald Sterling gave to Stiviano.

Source: Yahoo News, "Judge rules wife of former L.A. Clippers owner owed $2.6 million: lawyer," Reuters, April 15, 2015