What Happens If A Separate Property Was Given As A Gift?

Spouses often target gifts and inheritance during the divorce proceedings. Most of these are assets that they have a vested interested in. Gifts can be categorized differently, for instance, there are gifts given between spouses, and these are often treated as part of the couple’s marital estate.

In addition, when a spouse uses their own separate “property” to invest in the spouse’s marital property, that separate property now becomes another part of the spouse’s marital estate. To put that into more relatable terms, if a spouse were to use their inheritance (which is the separate property) to make an initial deposit on the marital home, that is considered as a “gift,” could be considered as marital property. This type of gift will make it perfectly reasonable for the non-inheritor to claim some entitlement.

Sometimes, the spouses, as a couple, can receive a gift, as in the more common way of using the word “gift.” In fact, without proper proof that a payment or gift was meant to be a separate gift to you, and is not for the couple, the court might decide that it is subject to division. Even so, separate property can still become marital property depending on how it is used, and what you refer to the property as during the marriage.

If you combine separate and marital assets together, it can become a joint asset, voiding the premise of separate property. Sometimes, if these assets become so muddled that it becomes difficult to distinguish what is separate and what is joint, a court might be so inclined as to call it all joint. There is a burden of proof on the party that is claiming separate property, and because of the pre-mentioned tendency of the court, it is important to keep separate property just that – separate.