Is that community property or did they intend the gift as separate property? The gifts have been exchanged and the presents are open, but who does it belong to? You may ask yourself “Is that piece of jewelry in the little blue box or the Lexus with the bow on it really yours? Is that what my kid’s friend’s lawyer dad keeps calling community property?”
Gifts that you and your spouse exchanged to each other may be treated as gifts, and thus separate property, if the intent that it was indeed a gift is clear. Maintaining a gift as separate property is necessary to maintain the intent of the gift. Intent of the gift giving can be evidenced by the fact that the present was received as a birthday, Christmas, or anniversary gift, or was titled in your name.
Gifts that are received from others during the marriage, such as from a parent, will need to be determined by the court whether the gift was made to one party or to both. This is often a factual question, involving intent. Intent is shown by either words or acts. Is there a card to both of you, or were separate gifts provided to each? The problem is that most people do not keep the cards and gift tags verifying gifts. This leads to people having to rely on the testimony of others.
Inheritances or bequests received during the marriage will be your separate property. Personal property, such as furniture or family heirlooms, is fairly easy to distinguish. Issues sometimes arise with respect to cash received if it has been commingled with community or marital funds. For example, Jane gets a $10,000 inheritance but puts it in same account as paychecks deposited and bills are paid.
The following tips help to increase the probability that expensive gifts and inherited funds will be easily traced and awarded to you as your separate property in the event of a divorce:
- Keep liquid funds separate from the community/marital assets, such as in a separate account.
- Make sure if title is involved, such as a vehicle, title is in your name alone.
- Determine a clear way to identify the gift and the timing (such as a photo of the gift and card).
- For jewelry and other insured gifts, keep the insurance in your name.
- Try to avoid any claim that your spouse contributed to the care, operation, or improvement to the increase in the value of the value of the gift or inheritance.
The above are a few ways to insure that you keep your Christmas gift as separate property and does not become a joint asset next year.