All in the name of LOVE (gifting to spouse)

Ah! Holidays are wonderful, especially when your spouse sends you a gift! While gifts of small values are more common, things may get more complicated when you receive a gift of larger value.  After all, you may not want half of that gift to belong to him at the time of divorce.

Normally, any gifts given from one spouse to another during the course of the marriage is considered the separate property of the receiving spouse. This is regardless of the fact that the gift may have been purchased with community funds.  In addition, a gift received from another spouse is unique in that any income generated from that gift is usually also considered the separate property of the receiving spouse.  This may not always be the case for other separate assets. 

However, it may not be as simple as saying that it is a gift.  After all, assets acquired during the marriage are usually considered to be community in nature unless otherwise proven.  The person making the claim (usually the receiving spouse) normally bears the burden of proof that it is separate in nature.  Given that most couples do not think about this when giving and receiving gifts, this is sometimes difficult to prove at the time of divorce when the parties do not agree. 

So, how do you show that your new diamond ring or brand new car (which was supposed to be a Christmas gift to you) is separate in nature? Here are some things that the Court may consider:

1. Written instruments.  Is there anything in writing that can show that the item was meant to be a gift to the receiving spouse? May it be a deed, a Christmas card, a text message, anything that can show that the giving spouse intended for the item to be a gift to the receiving spouse. 

2. Outward appearance.  Were there witnesses that saw a gifting gesture from the giving spouse? Did the spouse make a public statement showing intent that it was meant to be a gift to the receiving spouse? How did the giving spouse treat the property after giving it to the receiving spouse?

3. Elements of gifting.  Has the elements of gifting been satisfied? Typically, the court looks at three elements when considering the establishment of the existence of a gift: (1) intent to make a gift, (2) delivery of the property, and (3) acceptance of the property.

Therefore, when you have items of great value, or potentially great value, you may want to make sure that you have strong evidence of gifting.  Otherwise, the Court may find that the “gift” is actually still community property and subject to division.  Furthermore, the Court may find that any income generated by the “gift” will also be community assets. 

While it is important to preserve evidence of the gifting, one may still run the risks of the evidence being insufficient.  A better way to solve the problem is to enter into a post-nuptial agreement that clearly spells out the detail of the gifting and the parties’ intent.  Since this is a complex legal document, you may want to hire an attorney to help you with it.  

The content provided in this blog is for informational purposes only.  This is not legal advice, and your viewing of this blog does not form any attorney-client relationship. 

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