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How does the court divide gifts in a divorce?

On Behalf of | Mar 5, 2020 | divorce

In general, when the court divides property in a divorce, it looks to do so in a fair and equal way. While you may not get the exact same amount of property, the goal is to give you the same value of property. To do this, the court must separate marital and separate property. Marital property is anything you and your spouse obtained during the marriage. Separate property is anything you had before the marriage or after your separation. However, there are exceptions. 

One such exception, according to Her Money, is gifts you or your spouse received. A gift you receive from someone other than your spouse is separate property. The key, though, is that you cannot commingle your gift with your marital assets or else it becomes a marital asset. 

For example, if someone gifts you $100 and you put that money in your joint checking account, then it becomes part of your marital assets because the joint account is a marital asset. So, if you want to ensure gifts stay exempt, then you must keep it separate. 

You may also need to prove it is a gift. Sometimes this is not clear cut, especially when it comes to gifts of money. If someone gave you money as a loan that you need to pay back, then it is not a gift and is a debt not an asset. However, you and your spouse may not agree on whether a sum was a gift or a loan. Unless you have documentation, it may be difficult to prove something is a gift.