When it comes time for spouses to divide their property during a divorce, they sometimes find that some of their most valuable assets are gifts they’ve received from family, friends and others over the years. Unfortunately, they must determine which of their assets are separate property and which are marital property under Virginia law.
This process may not be as obvious as it might seem. A lot of divorce disputes arise over assets that were gifts – even gifts between spouses.
When is a gift considered separate property?
It’s important to agree on which assets are each spouse’s separate property. A gift is typically considered separate property if a spouse received it prior to the marriage or if it was given to one spouse by a third party during the marriage (for example, as a birthday present).
Sometimes, however, these gifts can become marital property if the gift is something both spouses use. For example, one spouse’s parents may give them a car. If the other spouse uses it regularly, puts gas in it and takes it in for regular maintenance, an argument can be made that the car has been commingled with marital property.
When is a gift marital property?
Besides instances of commingling, gifts are typically considered marital property when they’re given to both spouses together, as things like anniversary and housewarming gifts typically are. Christmas gifts are often intended for both spouses as well.
Gifts exchanged between spouses during the marriage, like jewelry and sports equipment, are also typically considered marital property. This can get tricky in divorce when one or both spouses want an expensive item back.
In Virginia, marital property is divided using the equitable distribution model. That means if a judge is making the decision (as opposed to a couple being able to work it out themselves), all marital property is to be divided fairly, which may or may not mean 50-50.
Having a legal agreement in place helps
A prenuptial or postnuptial agreement can spell out that gifts given to one spouse are to be retained by that spouse in divorce, even if they were given by the other spouse or commingled. Such agreements can help in the property division process.
Absent a prenup or postnup, determining who will keep valuable gifts (or at least receive comparable assets instead) can be a stressful and lengthy process. Seeking legal guidance can help protect the rights of a divorcing spouse.