Gifts Between Spouses In San Diego

In California family law, as a general presumption, all property acquired during marriage is considered community property. Upon divorce, all community property accumulated by the parties will typically be divided equally. However, many exceptions have been carved out of this well-known rule through the enactment of family code statues and California case law rulings. One common issue disputed in San Diego divorces is the issues of gifts between spouses.

During marriage, spouses often give each other gifts on holidays, anniversaries, birthdays or any other occasion. For example, many husbands buy nice jewelry for their wives and many wives buy toys such as a motorcycle for their husbands. The receiving spouse may come to think of the gift as his or her own separate property. The wife would never imagine she would have to return every gift she got from her husband to the “community pot” only to be sold with the proceeds divided upon divorce. Likewise, the husband would not think the motorcycle he often rides will be sold with wife receiving one-half of the proceeds.

Under California law, all property acquired by either spouse during marriage is community property unless the parties enter into a written transmutation agreement. A transmutation agreement changes the character of property from community to separate or separate to community depending on the circumstances. Generally parties enter into a transmutation agreement when they would like a disposition of property other than as stated under the California family code. However, all transmutation agreements must be in writing. The only exception to this rule is for gifts between spouses as long as the gift is not substantial in value taking into account the circumstances of the marriage. The court will consider the cost of the gift in light of the parties’ overall finances and wealth in order to determine if it was “substantial in value”.

In the property division examples described above, the wife would keep the jewelry gifted to her from her husband and the husband would keep the motorcycle gifted to him from his wife as long as those gifts were not substantial in value considering the income and assets of these parties. However, if the gifts are substantial in value they will be considered community property unless either party can present a written agreement to the contrary.

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