How are those gifts you received during the marriage handled in a property division? The thought comes to mind as more people are buying divorce gifts to be given during divorce parties. Many people are surprised to learn how their spouse’s gifts to them during the marriage are treated.
Florida Equitable Distribution
When people divorce, there is a property division which we call equitable distribution in Florida. I’ve written about property division in Florida many times before. Equitable distribution is governed by statute and case law.
Generally, courts set apart to each spouse their non-marital assets and debts, and then distribute the marital assets and debts between the parties. In dividing the marital assets and debts though, the court must begin with the premise that the distribution should be equal.
Equitable distribution is a court evolved concept in Florida. It is used to achieve as fair a division of marital assets as possible. Marital assets are those assets acquired by the parties during their marriage from their work efforts, services, and earnings.
In determining whether certain property is a marital asset, the question is not which party holds title to the asset.
Our statute defines assets and liabilities falling within each of these categories, and establishes certain presumptions to assist in categorizing each asset and liability during a property division. The court then divides the marital assets and liabilities between the spouses.
Dividing Gifts Between Spouses
Under well-established statutory and case law in Florida, is that a gift between spouses during the marriage is actually a marital asset. But proving something valuable was a gift can be tricky, as people don’t prepare paperwork when they are giving gifts.
A gift between spouses during the marriage is established by showing donative intent, delivery or possession of the gift, and surrender of dominion and control of the gift.
In other words, a gift is made when a donor, intending to make a gift, delivers the gift to the donee and relinquishes all possession and control of the gift.
Was it a Gift or a Loan?
Married couples receive some money from third parties – such as parents and other parents – during the marriage: sometimes the money is to carry them over during an emergency. Should that money be divided between them? It depends on whether it was a loan, and they should give the money back, or it was a gift to both of them, and the money is theirs.
Gifts to either spouse from a third party – such as a parent – are considered separate property and are not divided by the court. However, the caution against commingling still applies. If a spouse deposited the money from her parents in a joint account, it then probably became marital property, even if it was intended just for her.
In many divorces, one spouse claims money received from or given to a parent, sibling, etc. was a gift and the other claims it was a loan. Circumstances can be painted in a different light many years after the fact, and lawyers and judges must piece together what information they can to make a case and a decision.
If you receive or make a loan during your marriage, make sure its terms are fully documented in some sort of written and signed promissory note. If you receive or make a gift, draw up simple paperwork indicating specifically to whom the gift is being made, and that there is no expectation of repayment.