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Top Things to Know About Gifts and Marital Property

by | Jul 25, 2020 | Uncategorized |

When you are in the early stages of a Michigan divorce, or you are considering a divorce, it is important to understand how a divorce will affect your property. As you may already know, according to Michigan divorce law, property is divided according to the theory of equitable distribution. What does this mean for you? Both you and your spouse will be required to provide information to the court about all property you currently own, including all assets and debts. The court will determine which property should be classified as separate property (and not divided in the divorce), and which property should be classified as marital property (and divided as part of the divorce process). Once the court identifies all marital assets and debts, it will distribute them between the two spouses in a way that it decides is equitable or fair based on a variety of different factors.

There are various types of property that can pose complications in the process of property distribution, from commingled property to inheritances. One type of property that often gives rise to questions is the “gift.” If you received a gift prior to your marriage or during it, it is essential to understand how that gift will likely be classified. The following are some top things to know about gifts and marital property in your divorce. 

Most Property Acquired Prior to the Date of Marriage is Separate Property

Most property, including gifts acquired prior to the date of the marriage, will be classified as separate property. Accordingly, any gifts you received prior to the date of marriage likely will not be subject to division. However, it is important to speak with a divorce lawyer in Michigan about gifts to the married couple that may have been received by only one of the spouses prior to the date of marriage. Such gifts could be classified as marital property and subject to division. 

But what about gifts acquired during the marriage? 

Gifts from Other People During the Marriage Will Not Usually be Classified as Marital Property

In general, gifts from a third-party (i.e., not one of the spouses) to one of the spouses during the marriage will almost always be classified as separate property and will not be subject to division. However, if a third-party gives a gift that seems like a gift to both spouses, then that gift ultimately could be classified as marital property. You should discuss the specific attributes of the gift with your divorce lawyer.

Gifts Given to One Spouse by the Other During the Marriage Will Likely be Marital Property 

While third-party gifts are typically separate property, gifts purchased by one of the spouses during the marriage and given to the other spouse during the marriage will usually be classified as marital property. In most situations like these, the gift would have been purchased with funds that otherwise would have been classified as marital property. As such, the resulting gift will also likely be classified as marital property and subject to division. 

Gifts can be Explicitly Excluded in a Valid Premarital or Postnuptial Agreement 

You can also explicitly exclude gifts from the marital property through a valid premarital or postnuptial agreement. If you want to enter into this kind of contract with your spouse, you should seek advice from a family lawyer. 

Contact a Michigan Divorce Attorney for Help

If you have questions or concerns about how a particular asset will be classified in your divorce, an experienced Michigan divorce attorney at our firm can assist you. Contact the Law Offices of Michael A. Robbins for more information.

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