For many couples, Valentine’s Day is a time to celebrate their love and spend quality time with one another, whether it is a quiet night in or an eventful night out. Valentine’s Day also often means exchanging lavish or heartfelt gifts to commemorate your relationship. In the unfortunate event of divorce or separation, however, gifts given over the course of the marriage can become sources of contention in determining who owns what, or if an item should be divided. Within the realm of family law, how gifts are purchased, who purchases them, the size of the gift, and even the accompanying card, play a part in determining who keeps the gift.
California is a community property state as reflected in Family Code Section 760, which provides in relevant part: “except as otherwise provided by statute, all property, real or personal, wherever situated, acquired by a married person during the marriage while domiciled in this state is community property.” This means assets acquired during the marriage are presumptively community property, belonging to both spouses. Therefore, generally speaking, in the event of divorce or legal separation, each spouse is entitled to 50% ownership of all community property items. This leads many to believe that the value of big-ticket gifts, such as a car, or personal gifts, such as jewelry, are automatically considered community property and should be divided as such. This, however, is not always the case. There are circumstances where items typically considered community property are actually the sole and separate property of one spouse.
This exception is found in Family Code Section 852(c) which states the community property rule “does not apply to a gift between the spouses of clothing, wearing apparel, jewelry, or other tangible articles of a personal nature that is used solely or principally by the spouse to whom the gift is made and that is not substantial in value taking into account the circumstances of the marriage.” So, in the event your former spouse gifts you a set of earrings, they can’t later claim a community interest in the item under Section 852, even if the gift was bought using community funds. The earrings belong to the recipient. However, this is not a clear rule for all gifts as items which are not easily defined as “tangible articles of a personal nature” or very expensive gifts related to the standard of living during the marriage often become litigated. Where the personal nature of a gift is questioned, for instance a car, additional factors are often considered to determine whether the asset is community or separate property.
One such factor is how the item was paid for. A spouse that purchases a gift that is expensive or of questionable personal nature with separate property, acquired before marriage or through other means, would have a right to reimbursement for their contributions to a community property asset, per Family Code Section 2640. In the event the gift was purchased using community property, we turn to Family Code Section 852(a), which states: “A transmutation of real or personal property is not valid unless made in writing by an express declaration that is made, joined in, consented to, or accepted by the spouse whose interest in the property is adversely affected.” Thus, to prove that a community property asset has transmuted or changed its character from community property to separate property, there must be an express statement in writing made by the spouse who is gifting the asset to the other spouse.
In this minefield of ownership and exceptions, what can be done to clarify who truly owns a gift during marriage? The clearest and most effective method is to have the intended ownership confirmed in writing. Although this is not always possible, having ownership in writing can save time, money and emotional frustration in the event spouses decide to part ways.
Regardless of the circumstances of how gifts are given during marriage, a thoughtful email or thank you card expressing gratitude for a gift received is always a great idea.
With 200 years of combined experience, the experts at Reape-Rickett Law Firm specialize in family law. Call 818.888.1144 or visit DivorceDigest.com to learn more.