How Can I Protect My Gifts in a Divorce?

By Michael DiFalco
Partner

If you’ve received gifts of cash, property, or heirlooms from family members or friends during your marriage, you may be worried about what could happen to those gifts if you decide to divorce. How do you protect your gifts from property division during a divorce?

Understanding Separate vs. Marital Property

During a divorce, a couple must divide their marital property equitably. A court must arrive at a fair property division, which does not necessarily mean an equal 50/50 property split. However, each spouse retains their separate property in a divorce.

Marital property usually includes all property acquired by the spouses during their marriage, including real estate, vehicles, investments, and growth in retirement account balances. Separate property includes any property each spouse owned before the marriage. However, some property acquired during marriage remains each spouse’s separate property and does not become marital property unless certain circumstances occur. 

When Gifts Become Separate Property

In some cases, gifts received during marriage qualify as separate property not subject to equitable division in divorce. A gift may qualify as separate property if it meets various criteria. First, the person making the gift, such as a family member or friend, must have intended for only one spouse to receive the gift to the exclusion of the other spouse. Gifts intended for both spouses, such as a financial contribution towards a down payment on a marital home, may become marital property.

In many cases, a spouse will need clear evidence or documentation of the donor’s intent to make the gift to only one spouse, such as a letter or card addressed to one spouse only. The nature of the gift can indicate a donor’s intent for a gift to belong only to one spouse, such as when a family member gifts family jewelry or heirlooms. 

When Can Gifts Become Marital Property?

However, gifts from family members and friends can become marital property under various circumstances. For example, the law may presume that wedding gifts constitute marital property. The nature of the gift may also indicate the donor’s intent for both spouses to benefit from the gift, such as a financial contribution toward the couple’s purchase of a home. 

A spouse who receives a separate gift can convert it into marital property through their actions by commingling the gift with marital property. For example, suppose a spouse receives a separate gift of cash from a family member, and the spouse uses that cash to contribute towards the couple’s down payment for a home purchase or to pay the mortgage or upkeep expenses for the marital home. In that case, a court may determine that the spouse’s separate gift has been converted into marital property subject to equitable division in divorce; the spouse may lose the right to demand a credit for contributing that gift to the purchase or upkeep of the marital home. 

Steps to Protect Gifts in Divorce

Here are some steps which spouses can take to protect their right to keep separate gifts as separate property in the event of a divorce:

  • A spouse should keep detailed records of their receipt of the gift, such as letters, gift cards, purchase receipts, or any other documentation of the gift’s origin and intent.
  • Spouses should avoid commingling separate gifts with marital property, including depositing cash gifts into joint accounts or using gifts to fund joint purchases. Instead, a spouse should consider opening a separate financial account or safety deposit box to store cash or valuables given as separate gifts. 
  • Couples may consider creating a pre- or post-nuptial agreement that identifies specific assets as separate gifts not subject to equitable division. This would eliminate any dispute or confusion should the couple later divorce. 

Contact a Divorce Attorney Today

If you’re going through a divorce, experienced legal counsel can help you protect any gifts you’ve received from family and friends from property division. Contact Aiello & DiFalco LLP today for a free, confidential consultation with a divorce attorney to learn more about your legal options for protecting family gifts in divorce.

About the Author
I am a partner at Aiello & DiFalco LLP, and my priority for my clients is to guide them through an arduous court case to provide them with the opportunity to write the next chapter in their life. I tailor my approach to each client’s priorities and positions, and to the extent that matters can be predicted, I will always provide a realistic perspective of how the law could be applied to the particular facts and circumstances of a case. Since I thrive on helping people and solving problems, I bring an optimistic and positive approach to practicing in a very difficult area of law. With more than a decade of experience handling hundreds of cases, I have the ability to get results on the issues my clients view as priorities. When cases or certain issues cannot be settled, I have a solid record of success at trials, hearings, and on appeals. Feel free to contact me for a free initial consultation, I am always available to help.