In the last blog post, we discussed how North Carolina law generally classifies inheritances in a divorce. Inheritances often fall into the same category as “gifts,” since a loved one essentially gifts assets to you as their final wish.
However, we give and receive many gifts throughout our lifetimes – and during a marriage. So, what should you know about how to handle gifts if you face a divorce?
Just like inheritances, gifts are often separate
North Carolina law specifically states that assets gifted to individuals are separate property. This is not just regarding inheritances either. Gifts you receive on your birthday or holidays, from friends or family, belong to you. They are separate property, whether you obtained these gifts before or during your marriage.
Remember: commingling or sharing these items with your spouse could change that.
What about gifts to and from your spouse?
Gifts from third parties outside your marriage might belong to you. However, the classification of gifts exchanged between spouses can get a bit murky.
You and your spouse may spend quite a bit of money on gifts for each other throughout your marriage. While you may not worry about the small trinkets you exchanged over the years, some gifts might be expensive. These could include a wide range of items, such as:
- Jewelry
- Gadgets
- Name-brand garments or accessories
- Personalized items
The law indicates it must be clear that a spouse means the gift to be separate property when they give it. That is how it remains separate property in the event of a divorce.
That can be a confusing caveat. One might think that giving a gift implies that the item belongs to the person who received it. Yet, without an explicit understanding, the classification of a gift from one spouse to another could fall into question.
You may not face disputes regarding gifts you exchanged throughout your marriage. However, it is important to be aware of what the law says – and your rights – especially when it comes to big-ticket items and property division. Then, whether or not disputes arise, you are prepared to protect your financial future.