How Are Gifts Handled In A Divorce?

In any divorce one of the largest issues attorneys must resolve is determining how to divide the couple’s assets. This can obviously be a sticky issue and can be made even more complicated when gifts are involved. Generally, a gift by a third party to one spouse is considered non-marital property and is not subject to be divided by the Court. If one spouse receives such a gift, it must be clear that the gift giver intended to make the gift to that spouse individually. Usually, this is done in some form of writing and states the purpose of the gift and that the gift is meant to be the sole property of the recipient.

However, (as is the case with most laws) there are a number of exceptions to the general rule. First, if the recipient of a gift later “co-mingles” the gift with other marital assets, it can become marital property and will therefore be subject to distribution by the Court upon divorce. For example, if Wife receives a gift of $5,000 from her Aunt and deposits it into an investment account that is solely in her name, the $5,000 will be hers and hers alone. However, if she were to take that same $5,000 gift and deposit it into a joint checking account to which both spouses have access and use of that account, it will likely be considered marital property by the Court and therefore subject to distribution.

The other significant exception to the rule is that any gift between spouses is marital property and will be divided during equitable distribution. Therefore, regardless of the intent of the gift at the time it was made, a birthday, Christmas, or anniversary present will be considered by the Court to be marital property and each spouse will have an equal right and interest in it.

If you are anticipating receiving a gift from a third party and would like to make sure that the gift is given and received properly so as to avoid any possible future confusion, contact an experienced family law attorney prior to accepting the gift. Additionally, if you are moving toward divorce and would like an attorney to review your case and make a determination as to how an asset will likely be treated by the Court, please contact our firm, Gusty A. E. Sunseri & Associates, at your convenience.