Gifts During the Marriage - How Gifts are Treated in a Georgia Divorce

It is not uncommon for significant funds or valuable property to be given to a spouse either from a third party (such as a parent or family member) or from one spouse to the other. And the rules are different in each situation.

Gifts from third parties during the marriage that are clearly to an individual spouse, and not to the marital union, are straightforward. If a family member (other than your spouse) or any third party gave only you property - stocks, bonds, cash or real estate, for example, or you inherited this - and you never co-mingled the funds in a joint marital account or transferred these funds to a joint marital account, or transferred the title of real property you received by gift or inheritance to your spouse, then this is separate property. However, if the property was co-mingled, or you put your spouse on title, you have likely made this asset marital. See, Lerch v. Lerch, 278 Ga. 885, 608 S.E.2d 223 (2005).

The rules on gifts between spouses during the marriage are less clear. As a general rule, in Georgia, gifts between spouses of property acquired with marital funds remain marital property. See, McArthur v. McArthur, 256 Ga. 762 (1987). This can be significant if, during the marriage, the spouses have purchased and exchanged expensive jewelry or vehicles or other expensive items such as electronics or artwork.

If one spouse is claiming specific property was a gift from the other during the marriage, the issue turns on “donative intent”. See, O.C.G.A. section 44-5-80. The property in question is the separate property of the receiving spouse (the donee) if there was a valid gift.

To constitute a valid gift (1) a donor must intend to make a gift, (2) the donee must accept the gift, and (3) there must be a delivery of the gift. The person claiming the gift has the burden to prove the all three elements. The issues of intent, acceptance, or adequate delivery are questions of fact. See, Rector v. Rector, 244 Ga. 315, 260 S.E.2nd 55 (1979).

For example, the engagement ring is generally considered the wife’s separate property as it is given before the marriage, and it is generally presumed the husband intended the ring to become the wife's separate property upon completion of the ceremony. (This presumption could be rebutted if the ring is a special family heirloom.) Personal gifts on Christmas or birthdays are generally presumed to be intended as valid gifts and outright transfers. But what about a jewelry or artwork expensive items exchanged on other occasions? Are these intended to be a gift to the spouse or the marital union?

Normally, a valid gift to one spouse becomes the separate property of the recipient spouse. However, when a gift is given to the marital couple, the property is marital, absent evidence of a contrary intent by the donor. This is commonly an issue when a family member provides funds to acquire a marital residence.

What about money that comes from parents – is this a gift to the individual spouse or a loan? If a gift, if it a gift to just one spouse or to the union? If its a loan, is it a loan to the separate spouse or to the union? The answer may not be so clear, and you will need to discuss with Atlanta Marital Property Lawyer Russell Hippe.