When divorcing spouses divide assets, gifts often become a subject of dispute, especially if they are valuable ones. Under New York law, gifts to either spouse from a third party (e.g. a friend or family member) are the separate property of the recipient, but there are ways that they can become part of the marital estate and therefore subject to division during divorce.

Commingling marital assets

If separate and jointly held assets are combined, then the premise of separate property is voided and the asset becomes marital property. For example, if you receive money as a gift from your parents and you deposit it into a bank account held jointly with your spouse, then it could end up being divided along with the rest of the marital estate. As the party claiming separate property, the burden of proof is on you, and this can be challenging, especially long after the fact. To eliminate this type of confusion, the best rule of thumb is to deposit cash gifts into a separate bank account that is in your name only and not used to contain marital funds.

Investing in marital property

When you use your own, separate, resources to invest in marital property, those resources now become part of the marital estate. For example, if your parents give you money to spend as you choose and you opt to apply the funds to a deposit on a marital home, car, or another asset, that gift now could be considered marital property and your spouse could attempt to claim some entitlement to it.

New York is an equitable distribution state, which means that during divorce, each spouse is legally entitled to a fair share of all marital assets, no matter whose name is actually listed as the owner. It is important to note that unlike the standard in community property states, “fair and equitable” does not always mean a 50-50 split. The courts take several factors into account to decide what constitutes a fair and equitable distribution of marital property.

The recommended way to prevent this kind of contentious complication is to consistently maintain separate accounts and/or a clear division between gifts you perceive personally and as a couple. If someone gives you money or an expensive gift, then drawing up paperwork to document exactly to whom the gift is being made can take time and hassle later on.

If you are planning to file for divorce and have concerns about separate property being included in the marital estate, then contact a New York family law attorney today. Your attorney will advise you on how to properly prove ownership of assets you brought into the marriage as well as gifts given to you alone afterward. Jayson Lutzky is a Bronx divorce and family court lawyer. He prepares both prenuptial agreements (pre-nups) and postnuptial agreements (post-nups). If you have questions about marital property, then set up a free in-office consultation with Mr. Lutzky by calling 718-514-6619 or visiting www.MyNewYorkCityLawyer.com.