BILL NUMBER: SB 1936	CHAPTERED  08/28/02

	CHAPTER  310
	FILED WITH SECRETARY OF STATE  AUGUST 28, 2002
	APPROVED BY GOVERNOR  AUGUST 28, 2002
	PASSED THE SENATE  AUGUST 14, 2002
	PASSED THE ASSEMBLY  AUGUST 12, 2002
	AMENDED IN ASSEMBLY  JULY 2, 2002

INTRODUCED BY   Senator Burton

                        FEBRUARY 22, 2002

   An act to amend Section 721 of the Family Code, relating to
community property.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1936, Burton.  Community property.
   Existing law provides that a husband or wife is permitted to enter
into any real property transaction with the other or any other
person, and in transactions between themselves are subject to the
general rules governing fiduciary relationships, except as specified,
which are the same rights and duties governing nonmarital business
partners.  Existing law requires that both spouses provide access to
books regarding transactions, render upon request information
regarding community property, and account to the spouse any benefit
or profit from any transaction made by one spouse without the consent
of the other regarding community property.
   This bill would subject a husband or wife that enters into any
real property transaction with the other to those general rules
governing fiduciary relationships where the transaction involves the
administering of a trust.  The bill would also make certain
conforming changes that correct erroneous references and a technical,
nonsubstantive change.  The bill would include a statement of
legislative intent regarding the fiduciary relationship between
spouses.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 721 of the Family Code is amended to read:
   721.  (a) Subject to subdivision (b), either husband or wife may
enter into any transaction with the other, or with any other person,
respecting property, which either might if unmarried.
   (b) Except as provided in Sections 143, 144, 146, 16040, and 16047
of the Probate Code, in transactions between themselves, a husband
and wife are subject to the general rules governing fiduciary
relationships which control the actions of persons occupying
confidential relations with each other.  This confidential
relationship imposes a duty of the highest good faith and fair
dealing on each spouse, and neither shall take any unfair advantage
of the other.  This confidential relationship is a fiduciary
relationship subject to the same rights and duties of nonmarital
business partners, as provided in Sections 16403, 16404, and 16503 of
the Corporations Code, including, but not limited to, the following:

   (1) Providing each spouse access at all times to any books kept
regarding a transaction for the purposes of inspection and copying.
   (2) Rendering upon request, true and full information of all
things affecting any transaction which concerns the community
property.  Nothing in this section is intended to impose a duty for
either spouse to keep detailed books and records of community
property transactions.
   (3) Accounting to the spouse, and holding as a trustee, any
benefit or profit derived from any transaction by one spouse without
the consent of the other spouse which concerns the community
property.
  SEC. 2.  It is the intent of the Legislature in enacting this act
to clarify that Section 721 of the Family Code provides that the
fiduciary relationship between spouses includes all of the same
rights and duties in the management of community property as the
rights and duties of unmarried business partners managing partnership
property, as provided in Sections 16403, 16404, and 16503 of the
Corporations Code, and to abrogate the ruling in In re Marriage of
Duffy (2001) 91 Cal.App.4th 923, to the extent that it is in conflict
with this clarification.