It is once again the season of giving, a time for which many Americans save all year so that their loved ones can receive a very special present. If you are really lucky, you may even have a new car waiting for you under the tree. Especially for luxury cars, sales rise each December as people plan the ultimate Christmas morning surprise – complete with that giant bow.
However, if you are one of the many couples working through a divorce this holiday season, that car may come with strings attached. A gift of that caliber can change your financial asset situation, just like other luxury gifts such as jewelry, home renovation projects or other big-ticket items.
While the majority of Christmas gifts would not come into play during the property division process, some high-worth presents given at Christmas or another time could create a conflict if your spouse considers the gift marital property. As Minnesota is an equitable distribution state, each spouse must receive a fair portion of all shared marital assets. In the event of a divorce, make sure that you understand how property division handles gifts.
Gifts made to one spouse
Gifts or other large financial amounts specifically given to one partner remain separate personal property during a divorce. The worth of the gift would not affect the fair distribution of marital assets, but instead, belong to the spouse who received the gift alone. This applies to:
- Large monetary gifts
- An inheritance in the name of one spouse
- A personal injury award amount on behalf of one spouse
However, the concept of personal property can get complicated. Money deposited in joint accounts or used to enhance a marital asset (like a shared home) can become marital property due to the difficulty of sorting back out the personal property from the other marital assets.
Gifts between spouses
The state of Minnesota always considers gifts given from one spouse to the other as marital property. That means that if your husband gave you a Christmas car last year, the worth of that car would come into the equitable distribution calculation.