Equitable Distribution – Was That Gift Separate?

Vonhall v. Vonhall, (No. COA20-466) (unpublished)

In equitable distribution, clients often ask whether gifts to one spouse during the marriage is going to be subject to division. Below, we see a simple case example of how the law treats these gifts and the evidence that supports the legal conclusion:

• Facts: Plaintiff and Defendant separated, and equitable distribution was heard in 2019. Part of the hearing was spent presenting evidence on a camper that Plaintiff claimed was a gift from her mother and therefore separate property not subject to equitable distribution. Defendant argued that it was marital property because when the gift was made, it was jointly titled to both Plaintiff and Defendant. Plaintiff’s evidence also included testimony from said mother, that the camper was bought for Plaintiff and her children (mother’s grandkids). The joint title arose because the salesperson had stated that it would be easier to put Defendant’s name on the title at the time of sale and was only added in case something happened to Plaintiff, such as a coma or death, which could lead to denial of access to Defendant. Additionally, both parties used the camper, paid for the insurance, maintenance, and taxes. The trial court found that this camper was marital. Plaintiff appealed.

 

• Issue: Did the trial court err in classifying the camper as marital?

 

• Holding:

 

• Rationale: A gift to only one spouse from their parents is presumed to be a gift to only that spouse, thus separate property. However, the presumption is rebuttable with evidence that it was meant to be a gift to the marriage. Conversely, a gift with joint title creates the presumption that it was a gift to both spouses, thus marital property. Again, the presumption may be rebutted by a party that presents clear, cogent, and convincing evidence that the property and gift were separate. Since the camper was jointly titled when it was gifted, it was presumed to be marital property. Then Plaintiff bore the burden to prove that it was meant to be separate. She failed to do so, and mother’s testimony was not credible enough to overcome the presumption. Seeing as the mother was present when the camper was jointly titled, and she gave no objection to the titling, the trial court made a proper finding based on competent evidence that will not be reversed on appeal.

 

• Lessons and Observations:

 

1. This is a very straightforward application of the law and the legal presumptions when property is gifted to a spouse. In this case, it was a tangible object, a camper, that was jointly titled at the time of acquisition. It set forth a presumption, and no credible evidence rebutted the presumption—not even the mother’s testimony that it was not her intent to gift the camper to the couple. This signals a clear rule for parents meaning to gift: Do not gift an item jointly titled if the intent is to gift separate property.