What Happens to Gifts in a Divorce?

When you’re married, many people operate under the guiding principle of “what’s mine is yours and what’s yours is mine.” This idea of shared property is not, however, merely an ideal but a legal concept that governs how the state regards what it calls marital property. In a divorce, this means that the court must determine what is separate property and what is marital property in order to decide how to divide your marital property equitably.

Gifts, too, are subject to this determination, but it can be particularly tricky to determine whether a gift is rightly considered separate property or marital property.

Marital Property vs. Separate Property

According to Section 236 of New York Domestic Relations statutes, marital property is subject to equitable distribution between the two spouses. Marital property typically refers to property acquired by a couple during the duration of their marriage, regardless of title. This does not necessarily mean that your assets will be divided equally, however. Instead, a judge uses sixteen factors to determine how to divide your marital property equitably, that is, fairly.

Separate property, on the other hand, is not subject to equitable distribution and instead belongs totally to the spouse who owns that separate property. Typically, separate property refers to property acquired prior to the marriage, but there are cases in which property acquired after the commencement of the marriage will still be considered separate property, including:

  • Personal injury awards
  • Property acquired during the marriage but delineated as separate property by a legally valid prenuptial or postnuptial agreement
  • Gifts and inheritances from third parties

Determining if Gifts Are Separate or Marital Property

New York’s Domestic Relations statutes specifically name “property acquired by bequest, devise, or descent, or gift from a party other than the spouse” as separate property. As a general rule, this divides gifts into two categories – those given between spouses and those given by third parties.

Gifts given to you by your spouse (and vise-versa) during the course of your marriage are marital property and are subject to equitable distribution. This doesn’t necessarily mean that you will have to return gifts given to you by your spouse, but it might mean that you will need to determine the value of those gifts – often via an appraisal – and that their value may be factored into the value of the overall marital property that is subject to equitable distribution.

However, gifts given to either you or your spouse by another person remain separate property. So, in theory, if you were given a gift of property or cash by your parents during your marriage, for example, that would remain your separate property.

In practice, however, determining whether gifts are separate or marital property can be difficult and sometimes contentious for various reasons, including:

  • Gifts and inheritances may represent a significant portion of a couples’ assets, and spouses may be motivated to claim these third party gifts or inheritances as either separate or marital property, according to their opposing interests.
  • Often it is not totally clear if a gift was intended for a particular recipient or the couple together. Without proof that a gift was given as a separate gift for one spouse, the court might decide it was given to the couple together and is therefore marital property.
  • If a gift or inheritance was comingled with marital property, it may become marital property. For instance, if you purchased a marital home with an inheritance, then it may lose its status as separate property. Likewise, if you inherited a home as separate property but maintained it with shared marital funds, then it might become marital property.

As you can see, gifts and inheritances given by third parties – while technically considered separate property by default – can in practice be difficult to distinguish from marital property. For this reason, it is essential that you hire an experienced and knowledgeable divorce attorney to help advocate for you during the divorce settlement process.

The attorneys at Samuelson Hause PLLC are well versed in navigating these complex determinations to help you achieve a settlement that is fair and protects your long-term interests. Contact us today at (516) 584-4685 to schedule a consultation.