Splitting up the marital assets is part of a divorce. And, a frequent question is about gifts. This can be a gift from one spouse to another or a gift from a third party. For example, a gift from a parent to a husband/wife during the marriage. Asset splitting, with gifts and inheritance, is not necessarily straightforward.
GIFTS FROM ONE SPOUSE TO ANOTHER
Gifts between spouses are marital property. Understandably, the person who received the gift considers the property to be “theirs.” However, the court does not see it that way – a spouse still has an interest in the item. As such, it will be subject to the same State rules as any other property.
Washington State is a community property state. This means that all income earned, property, and debts acquired during the marriage are split evenly.
GIFTS FROM A PARENT (OR THIRD PARTY) TO ONE OF THE SPOUSES
On the other hand, gifts from a third party to one of the spouses belongs to only that spouse. Meaning that it is not subject to property division in a divorce. There is a caveat here that we’ll discuss in the “but… there is a catch” section. An affidavit from the third party that it was a gift to a specific spouse should be enough. Include a copy of the title if it is real property (ex. a house or land).
GIFTS FROM A PARENT (OR THIRD PARTY) TO BOTH SPOUSES
Gifts, or inheritance, to both parties is marital party and split evenly. This is true even if only one spouse’s name is on the deed.
INHERITANCE TO ONE OF THE SPOUSES
When only one spouse receives an inheritance, it belongs to that spouse alone, and no split occurs. That said, there is a catch to be aware of.
BUT… THERE IS A CATCH
Even if a spouse receives a gift to just them, or they inherit a property, some of the property could still be considered marital assets. This occurs when the property increases in value due to efforts from both spouses.
Consider a house where both spouses use their income, or labor, to improve the value of the house. The original amount of the house belongs to only the one spouse; however, the increase in value is subject to a split because both spouses contributed. For example, let’s say a house is worth $100,000 when received by only one spouse. During the marriage, remodeling happened and both spouses contributed. Now, let’s say this increased the house value to $150,000. The original $100,000 would belong to the one spouse who received the gift house, or inherited it, while the $50,000 increase in value is marital property and subject to splitting.
Contact Chad Foster to discuss your divorce case with a Washington family law attorney you can trust.