When you are considering divorce or are in the early stages of the Michigan divorce process, you are probably thinking a lot about the division of marital property. As you likely know, under Michigan law, in a divorce case, the court will classify property as either marital property or separate property. Any property that is classified as marital property is subject to division. When courts divide marital property, they use a theory known as equitable distribution to divide the property in a way that is fair to both spouses. In some cases, property has characteristics of both marital and separate property. In such scenarios, the court will usually try to determine what portion of the property is marital (and thus divisible) and what portion is separate (and not divisible). We often hear the question: How do courts classify gifts to one spouse?
How do Courts Classify Gifts Made During the Marriage?
The answer to that question depends on a number of different factors. For instance, did one spouse receive the gift from a third party outside the marriage, or did the gift come from the other spouse? Naturally, spouses exchange gifts with one another on a variety of occasions throughout a marriage, from anniversaries to birthdays and other holidays. Was the gift intended for only one spouse, or was it a gift to the marriage?
Who Gave the Gift, and to Whom?
The first question you will want to ask is: Who gave the gift? For now, we want to talk about gifts given by third parties to one of the spouses. For example, maybe a friend of Spouse A gave her a gift for her birthday, or Spouse B’s parents gave him a gift of $10,000 for Christmas one year. In general, gifts from third parties may be considered separate or non-marital property, and those gifts would not be subject to distribution in the divorce.
However, the next question you need to consider is: To who was the gift given? If the gift was given by a third party to only one of the spouses, it could be classified as non-marital property. Yet if the gift was an anniversary present from a third party to the couple-even if it was presented to only one of the spouses-there is a good chance that it may be classified as marital property and divided in the divorce. The court will look at the specific facts and circumstances surrounding the giving of the gift.