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Gifts received by one spouse during the marriage remain the separate property of that spouse upon divorce. Bailey v. Bailey, 250 Ga. 15 (1982). One exception to this general rule is that if the value of the gift appreciates during the marriage as a result of the other spouse's efforts, that gift or the appreciated value may be deemed marital property subject to equitable division. Halpern v. Halpern, 256 Ga. 636 (1987).
A gift made by one spouse to the other, which consists of marital property, remains marital property subject to equitable division upon divorce. McArthur v. McArthur, 256 Ga. 762 (1987). However, if one spouse gives a gift to the other spouse which consists of the donating spouse's separate property that completed gift becomes the separate property of the recipient spouse. Bailey v. Bailey, 250 Ga. 15 (1992). The examples below may help to illustrate the distinction.
If husband uses marital funds, like funds from a joint bank account used by the couple to deposit their monthly income, to purchase a diamond bracelet for the wife, this gift will likely be deemed marital property and subject to equitable division upon divorce.
But, if husband uses money received from an inheritance (which is generally deemed separate property in Georgia) to purchase the diamond bracelet for wife, this gift will likely be deemed the wife's separate property upon divorce unless the husband can show that he intended otherwise.
If a gift is made by a third party to a married couple, that gift will be deemed marital property upon divorce absent some evidence proving that the donor of the gift intended the gift to be directed to one spouse only. Braly v. Braly, 244 Ga. 15 (1992). If there is a conflict regarding whether a gift given to a couple was meant for both spouses or only one, the court presiding over the divorce will make a determination based on the evidence presented by both parties. Hayes v. Hayes, 279 Ga. 741 (2005). See also Wilson v. Wilson, 277 Ga. 801 (2004).
Most common question regarding gifts and the division of marital property revolve around whether the wife's engagement or wedding ring is subject to equitable division in a Georgia divorce. See our Atlanta Divorce Attorney Blog for more information concerning this topic. Our posting entitled "Ownership of Engagement Ring Upon Divorce or Broken Engagement" provides a wealth of information on this topic.