The recent $11 million sale of a Winston Churchill painting made headlines not only for its price tag and renowned wartime leader creator, but because the seller, actress Angelina Jolie, was previously gifted the painting by husband, actor Brad Pitt, whom she is in the process of divorcing.
Beyond the public interest in the parties involved and the painting’s noteworthy historical value, the sale begs the question: Could such a transaction involving an interspousal gift be problematic in other divorce cases? The short answer is yes.
That’s not to say there’s anything dubious about the Churchill painting sale, but as our New Jersey divorce attorneys can explain, the general rule is any property acquired during marriage by either party is considered marital property. Thus, it would be subject to equitable distribution. There are some exceptions, but interspousal gifts (gifts given by one spouse to another) aren’t among them. Interspousal gifts are generally considered marital property, and thus subject to equitable distribution.
If an interspousal gift is sold prior to equitable distribution and without the other person’s consent, the judge may consider that in weighing division of other property/debts.
Equitable distribution doesn’t mean the item itself or even its value is split 50-50. Rather, the family law court will consider the value of the interspousal gift when balancing the scales of fair property division.
A gift given to one spouse by a third-party is generally considered separate property. Same goes for an inheritance. (Your spouse can challenge this by arguing the gift was meant for both of you, not just one or the other OR that he/she contributed to the gift’s increase in value.)
But interspousal gifts are different. In fact, they are specifically singled out in state statute. N.J.S.A. 2A:34-23(h) expressly holds, “interspousal gifts or gifts between partners in a civil union couple shall be subject to equitable distribution.”
Some examples of interspousal gifts that frequently become points of contention during divorce:
- Sporting goods/equipment.
- Luxury clothing, coats, shoes, purses, suits, etc.
Gifts between spouses during the marriage will probably be subject to equitable division - even if the title for the property is in the name of just one spouse.
Where New Jersey Courts Stand on Interspousal Gifts
It’s worth noting that family law judges in New Jersey are given broad discretion in allocating assets subject to equitable distribution, with the goal being the fairest apportionment of marital assets. Appellate courts will usually affirm equitable distribution awards so long as the family law judge could have reasonably reached the conclusion based on the evidence presented and there is no factual or legal mistake. That means it is important to get it right the first time around. Working with an experienced lawyer helps assure this.
Equitable distribution stems from the recognition of marriage as a joint undertaking, shared enterprise and partnership. Thus, property acquired during the marriage is usually marital property - regardless of whose name is on it. This is particularly true when it was acquired in the interest of the marriage. But if one spouse asserts that an asset is exempt from equitable distribution, they will bear the burden of proof.
The bottom line is that the gifts your spouse gave you during marriage (or visa versa) will probably be subject to equitable distribution. Therefore, tread very carefully before you think about selling them prior to the finalization of your divorce. Doing so could have unintended consequences for the equitable division of other assets.
Consult with a divorce lawyer before making any major decisions regarding interspousal gifts.
Call Rozin|Golinder Law, LLC today at (732) 810-0034 for a free and confidential consultation.