Dividing assets during divorce proceedings can be complicated.
In the UK, we have specific guidelines concerning gifts which are usually treated differently from other assets. It is crucial to seek advice from an expert divorce solicitor to understand how these rules apply to your individual situation.
Gifts
Gifts exchanged during a marriage can be significant, especially those of high value such as jewellery, designer items, and vehicles. The law distinguishes between gifts given between spouses and those given by third parties. Understanding these differences is very important when parties begin the divorce process.
- Gifts between spouses: Gifts between spouses, including engagement rings, tend to be classed as matrimonial property. The Courts are therefore likely to take such gifts into account when considering the financial settlement.
- Gifts from third parties: What happens to gifts from third parties is less clear-cut. In most cases, a gift to both spouses would be treated as a matrimonial asset and therefore taken into account in the financial settlement. The Court’s approach is different however to gifts from third parties to one spouse. Usually, these types of gifts are considered to be non-matrimonial assets and are excluded from the matrimonial pot available for division between the parties.
Comments
It is important to understand that whilst these are the general rules, the Court has a wide discretion when it comes to considering gifts during divorce proceedings. For instance, the Court has the authority to include non-matrimonial assets in the financial settlement if the matrimonial assets are insufficient to meet the parties’ needs.
In addition, caution is needed to ensure that assets that are gifted are not converted into matrimonial assets by mingling it with an asset of the marriage. For example, where one set of grandparents gifts money to their granddaughter, who then pays off the mortgage on the family home. In this case, the gift may be taken into account and included in the financial settlement as it has been mingled with matrimonial assets
How can we help?
Naomi Bond is an Associate & Solicitor in our expert Family Law Team.
If you need advice on any divorce-related matter or have any other family law-related queries, please contact Naomi or another member of the team in Derby, Nottingham, or Leicester on 0800 024 1976 or via our online form.
Naomi or the team will be happy to discuss your circumstances in more detail and give you more information about the services that our Family Law team can provide along with details of our hourly rates and fixed fee services.
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