Learn about the key factors the court will reference when dividing spouses’ gifts to one another.
Are you and your spouse in the habit of giving one another extravagant gifts on holidays, birthdays, and anniversaries? This sort of generosity can be a wonderful thing during the marriage, but if divorce looms you may begin to wonder how these gifts will be divided up. To help figure out your property rights in relation to gifts, your best course of action would be to contact a divorce attorney. However, you can get a basic idea of your rights by answering the following questions about the gift.
Who Uses the Gift?
Gifts that are intended primarily for the personal use of one spouse, such as clothing or jewelry, are generally considered that person’s separate property and do not have to be divided in a California divorce. Gifts that can be used and enjoyed by both spouses, like vehicles, furnishings, or art, need further investigation.
How Was It Paid For?
Under California law, anything purchased with community income becomes community property (with a few exceptions). Anything purchased with separate income, such as an inheritance or income from investments bought prior to the marriage, remains separate property.
How Valuable Is It?
A key exception to California’s community property doctrine is that gifts for the personal use of one spouse (like jewelry) can still be considered community property provided that the gift was “substantial in value taking into account the circumstances of the marriage” (CA Family Code 852).
For example, in one precedent-setting case, the husband gave the wife a $14,000 ring as an anniversary present. Though the couple had a combined income of around $370,000, the court still took the view that this ring was valuable enough to constitute an investment rather than a gift and determined that it should be split as community property.
Was There Any Written Agreement Pertaining to the Gift?
If things weren’t complicated enough already, the exception regarding gifts of “substantial” value can be overridden with a written agreement stating that the item is intended to become the sole property of the recipient. A card commemorating the gift is not sufficient—in the case mentioned previously the anniversary card was rejected as proof that the ring was intended as a gift. The agreement must be clear and specific.
Couples Can Reach Their Own Agreements
Just because a particular high-value gift was not designated as your sole property at the time it was given doesn’t necessarily mean you can’t keep it. Spouses who reach their own divorce agreements out of court may divide their assets however they see fit. However, is would be wise to understand the legal strength of any position you wish to take regarding keeping or splitting gifts before entering negotiations with your ex so that you can ensure you are seeking fair and reasonable terms.
