Deciding how to divide a lifetime of belongings is one of the most stressful parts of ending a marriage. In California, the distinction between community and separate property is vital, especially when it comes to presents and inheritances. Can I keep gifts during a divorce in California? The answer often depends on who gave the gift and its overall value. This blog explores the specific rules governing gift division in our state and how a Los Angeles asset division attorney can guide you through these challenging financial disputes.
How Are Gifts Handled During a Divorce?
The distribution of assets between spouses is often a highly contested issue, causing delays during the legal process. Generally speaking, California is one of the few community property states. As such, they consider any assets, property, and funds accrued during a marriage as marital property. When dividing these assets, the courts have decided to split all marital property evenly between spouses.
However, it’s crucial to understand whether or not gifts are viewed as separate property. In most instances, gifts are deemed separate property, remaining in the possession of the spouse who received this gift. For example, if you are gifted a motorcycle by a friend during your marriage, and your spouse does not use it, pay for maintenance, or pay for the insurance on the bike, you will likely be able to keep this asset as your own separate property.
Are There Any Exceptions to This?
There is a substantial caveat to this rule, however. If a spouse receives a gift from their spouse or another party and they comingle the present with marital property, it would no longer be considered separate property. For example, if one spouse’s father gifts them $10,000 and they place it in an individual account under their name only, they would likely keep the funds during the divorce. However, if they deposit the money in a joint bank account, it becomes marital property.
In some instances, what were once gifts may become “loans” from the gifting spouse during a divorce as a means to receive a portion of the process. However, an experienced attorney will be able to help determine what the truth is. This includes examining the nature of the gift and all factors that surround it. For example, if your spouse gifts you a check for $5,000 with the memo line reading “a gift for you,” it is unlikely they will be able to argue that they had intended to loan you those funds.
Handling property distribution can be tricky when you’re going through a divorce. As such, you must have a competent attorney to help protect the gifts you received during your marriage. At the Kramer & Zitser, LLP, our legal team has experience handling high-net-worth divorces that are often complicated by gifts and inheritances. Contact us today to learn how we can help you during this tricky situation.
California Asset Division Resources:
How Are Assets Divided in a Divorce?
How Are Investments and Stocks Divided in a Divorce in California?
