Gifts and Property Settlement

The time of year when most of us are engaged in buying gifts for family and loved ones is just around the corner. Sometimes these gifts will be small such as a nice bottle of wine but sometimes they are generous gifts, like money for the deposit on a house, or a car.

Gifts between Spouses
Generally, gifts between spouses will form part of your personal effects for the purposes of formalising a property settlement. This is because the relevant value is the second-hand value, which is likely to be much less than what the item initially cost.

Most of the time these personal effects will be only of modest value and not worth arguing about in the court. When negotiating your property settlement, it is important to be clear about the personal effects you are retaining, where those items were given to you by your partner.

Intended Beneficiary of the Gift
A property settlement is about assessing contributions to the relationship; thus, an important question is who was intended as the beneficiary of the gift.

If one spouse in the relationship receives a substantial monetary gift, it must be determined whether the gift was meant for their sole benefit or for the benefit of the other spouse as well. Unless it is clear that the gift was meant for the equal benefit of both people in the relationship, the court will usually consider the gift as received by only one party. This will then affect the assessment of contributions as well as the adjustments made in the property settlement.

However, the question of who the gift belongs to holds less weight the longer the couple were married or in a relationship. When dividing the property and assets following the breakdown of a shorter marriage or de facto relationship, such as one lasting for five years, it is more likely that any monetary gift received by either party will be kept out of the divisible asset pool, remaining the property of the gift recipient. For longer relationships lasting at least ten or fifteen years, regarding gifts in property settlements, it is less relevant which side of the family the gift came from. The court is more likely to treat both spouses as equally entitled to the money.

Determining who receives gifts in property settlements or whether a gift is divided equally depends on the assessment of contributions and each party’s earning capacity.

If you would like to know more about your rights and option or to have a Binding Financial Agreement or Consent Orders drafted, Straits Lawyers are now offering online services at https://straits-lawyers.square.site/product/family-law-binding-financial-agreement-consultation-bfa-/5?cs=true.

Alternatively, you send us an email at info@straitslawyers.com or give us a call on 8410 9069 to arrange an appointment for an online interview.

Please note that this article does not constitute legal advice and Straits Lawyers will not be legally responsible for any actions you take based on this article.