If you are going through a divorce in New Jersey, you may be wondering whether gifts from family members, friends, or even your spouse will be divided during property distribution. New Jersey follows an equitable distribution system, but not all property is treated the same. The way that gifts are classified and treated can significantly affect your financial future, so understanding your legal rights and options is crucial. Continue reading for more information and work with a knowledgeable Bergen County property division lawyer for skilled legal counsel today.
What is Considered a Gift?
While the definition of a gift may seem simple enough, it’s important to understand that property division in a divorce follows strict laws. A gift refers to a voluntary transfer of an asset without the need for compensation or some sort of obligation in return. To legally qualify as a gift, three elements must be met. Consider the following.
- The donor must have intended to give the item permanently
- The item must have been delivered to the recipient, meaning it was actually transferred
- The recipient must have accepted the gift
If someone clearly intended to give you something permanently and handed the item, title, keys, or deed over to you, it is likely considered a gift. Having documentation in the form of a card, check, email, or other communication can help prove intent.
What is Equitable Distribution?
Equitable distribution is New Jersey’s process of dividing property between spouses in a divorce. It is based on a fair and equitable split of assets, not a 50/50 division. Equitable distribution will not always be equal, but will instead take into consideration the specific financial circumstances of each spouse as well as contributions made to the marriage.
During equitable distribution, only marital property is divided. This includes almost all property acquired during the marriage or through marital funds or efforts. Property owned before the marriage or by only one spouse through a gift or inheritance can be considered separate.
Do Gifts Get Divided in an NJ Divorce?
As established, New Jersey courts only divide marital property during a divorce. If property was gifted to one spouse from a third party, it is generally considered separate, meaning it is exempt from the distribution process.
If the gift was received before marriage, it is almost always considered separate property. Gifts received during marriage from a third party may still be exempt as long as it is clear the gift was intended for only one spouse, and the item maintains its distinct character.
Gifts exchanged between spouses, however, are often considered marital property as property acquired during the marriage is generally presumed to be jointly owned. Wedding gifts are also typically divided during a divorce, as they were given to both spouses.
It’s also important to note that gifts can lose their separate status if they are commingled with marital assets. For example, a monetary gift to one spouse could become marital property if it is deposited into a joint bank account. For more information and legal advice, contact an experienced attorney today.
