“O Christmas Tree, O Christmas Tree”: How are gifts treated on divorce? The family law 12 days of Christmas – day 1
As we turn our calendars to December, and we can finally start getting into the Christmas spirit, our family law solicitors Alex Haworth and Gemma Nicholls-Webber share several of their favourite family law topics with a festive twist.
Over the first 12 working days of December, they’ll be giving their family law version of the 12 songs of Christmas, where they’ll cover a wide range of questions or issues that often arise when dealing with family law matters…
“O Christmas Tree, O Christmas Tree”: How are gifts treated on divorce?
Are gifts treated as matrimonial or non-matrimonial property? Will that diamond necklace your spouse placed underneath the Christmas tree all those years ago be taken back? When parties begin the divorce process, they should also consider how the matrimonial assets are to be divided, and the starting point for this is financial disclosure. As part of this disclosure the parties to the marriage should provide details of all personal belongings that exceed £500 in value.
However, what is included in full and frank disclosure is not always included as matrimonial assets. When considering how gifts are treated on divorce, the Courts approach depends on the origin of that gift.
1: Gifts from spouse – Usually, gifts between spouses count as matrimonial property and are therefore taken into account in the financial settlement. The statement of ‘what’s mine is yours’ really comes into play here!
2: Gifts from others – This is a complicated area as there are many factors to take into account. A gift to the couple would usually be treated as matrimonial assets, whereas a gift to one of the parties during the marriage is usually considered to be non-matrimonial property and would remain with that spouse after divorce and financial settlement. However, that being said, caution is needed to ensure that the gift that was non-matrimonial property is not converted into a matrimonial asset by mingling it with an asset of the marriage. For example, where one set of parents gift money to their daughter, who then pays off part of the mortgage on the family home.
3: Inherited assets – In most cases, assets that are inherited are ring-fenced and viewed by the Court as a non-matrimonial asset.
Every case will be decided on its own facts, and it is important to understand that whilst these are the general rules, there are often circumstances that can change the general rule. For example, the Court has the power to include non-matrimonial assets in the financial settlement if there are insufficient matrimonial assets to meet the parties needs.
The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.
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