Jewelry: Gift or Marital Property?

When a couple gets divorced in California, their assets will be considered marital property and distributed equally. This will be the case for all the property they share unless that property was acquired before the marriage. In that case, the spouse who owned that property before or after the marriage was whole will be considered the sole owner of that property.

Some couples can negotiate the terms of their property division in a divorce with the counsel of Irvine high asset divorce attorneys and keep the matter out of court. Others, however, are unable to resolve their differences and proceed to litigate their issues in court. When a court intervenes, the question of who gets what becomes even more complex, and luxury goods like jewelry are often items of much debate. Jewelry, as it were, is an important exception to the notion that property that belonged to one spouse before the marriage will remain with that spouse after it’s over.

Jewelry and Gifts in a Divorce

Under California law, gifts are generally considered to be non-marital property that may remain with the spouse it was gifted to. However, this only works when the spouse who gave the gift did not commingle other assets with the gift. For example, if one spouse made a large cash gift to another and that cash was kept in a joint bank account they both had access to, then it could be argued that those assets were commingled and must be divided between the two spouses. 

Jewelry, however, is a different matter. Usually, gifts like an engagement ring won’t be considered marital property that must be divided between the spouses, but rather will be considered a gift that was made from one spouse to the other before the marriage occurred, and therefore their sole property. But things can get really tricky when sentimental value is tied to an object of extreme value: For example, what happens when a husband gifted his former wife a family heirloom that his mother now wants back?

These situations can be extremely complex and will generally be centered around whether your spouse’s intention in giving you the gift was quite clear. For example, if your spouse gifted you the heirloom jewelry with a card that said, “Take this gift for your eternal enjoyment,” that would be a pretty clear piece of evidence that your former spouse wanted you to keep the gift. In the absence of such a gesture, however, it will be up to you to prove that the object in question was transmuted to you by your former spouse and that it belongs to you and you alone. 

The Difference is in The Value

Gifts of extreme value will almost certainly be considered marital property under the law. That property will be worth money in the divorce, and you will likely have to go through the process of having these valuables appraised and then determine a fair and equitable way to divide the goods. Options can include selling off the objects and splitting the cash, or figuring out a fair way to split the objects between you both.

Contact Our Irvine High Asset Divorce Attorneys

If you’re considering a divorce in California and are concerned that your jewelry will be up for grabs, contact our Irvine high asset divorce attorneys today.

Frequently Asked Questions

Is jewelry a spouse received as a gift their separate property?

It depends on the value and the nature of the item. California treats gifts between spouses of clothing, wearing apparel, jewelry, or other tangible articles of a personal nature as the separate property of the recipient, provided the gift is not substantial in value taking into account the circumstances of the marriage. A modest piece is generally the recipient’s separate property. A gift of substantial value relative to the couple’s circumstances is generally treated as community property absent a written agreement, which is a result that surprises many people.

What makes a gift substantial in value?

There is no fixed dollar figure, because the test is relative to the circumstances of the particular marriage. A piece worth ten thousand dollars may be unremarkable in one household and plainly substantial in another. Courts look at the value of the item against the couple’s overall finances and spending patterns, so the same watch can be characterized differently in two cases. That relativity is why these disputes are argued from the household’s actual financial record rather than from the item’s price alone.

What about an engagement ring?

Its treatment differs from gifts made during marriage, because it was given before the marriage existed. A ring given in contemplation of marriage where the marriage takes place is ordinarily the recipient’s separate property, having been acquired before marriage. Heirloom pieces received by one spouse from their own family, whether before or during the marriage, are separate property as gifts or inheritance. Records establishing when and from whom a piece came are what settle these questions.

How is jewelry valued and divided?

By appraisal, at fair market value rather than insurance replacement value, which is often substantially higher. Resale markets for jewelry are notably unfavorable, so a piece insured at a high figure may realize far less if sold, and that gap is worth establishing before either spouse trades other assets against it. Pieces are ordinarily allocated between the spouses rather than sold, with an offsetting adjustment elsewhere. Documenting the collection with photographs and appraisals early avoids disputes later about what existed and what condition it was in.