Dear Cassie: Are gifts that I receive from my parents during my marriage going to be subject to division between my spouse and me if we divorce?

Dear T.B.:

As with most topics in family law–it depends!

The general rule of thumb is that gifts received from a third party by either spouse during the marriage are exempt from equitable distribution. What that means is that the gift remains the sole property of the spouse who received it, and the gift is not divided between the parties. However, what the receiver of the gift does with the gift thereafter could change that outcome.

For example, if a spouse receives a gift of money from a third party, but subsequently deposits the gift into a jointly-titled account, the gift will be “commingled” and will lose its exempt status. Similarly, if a gift of money is used to acquire property that is titled in joint names, such as a house, the gift will be “transmuted,” and will similarly lose its exempt status. Conversely, if the gift of money is maintained in a separate account, titled only in the name of the spouse who received the gift, and not commingled with any marital funds, it will remain exempt from equitable distribution.

Also relevant to your question is whether it is clear to whom the gift was made. It is not unusual for family members to make gifts to both spouses, together, during the marriage. In that case, the gifts are the property of both spouses, not just the spouse who is related to the family members making the gifts.

If you are dealing with the issue of exempt property in your matter, you should seek the advice of matrimonial counsel.

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Cassie Murphy is a divorce and family law Partner with the Law Offices of Paone, Zaleski & Murphy, with offices in Red Bank and Woodbridge.