In a divorce, one of the biggest and most contentious issues is the division of assets. Most states subscribe to the equitable distribution approach in determining how to divvy up property or assets during divorce. Under equitable distribution, marital property is divided fairly between the spouses. Marital property is all property acquired during the marriage. Any assets or property acquired before the marriage is considered separate property. However, many divorcees might wonder whether gifts are considered marital property, such as wedding and engagement rings.
What is Equitable Distribution?
When a court is tasked with determining equitable distribution, it evaluates factors relating to the financial well-being of both parties and tries to ensure one spouse is not detrimentally impacted. This is a fact-specific analysis that aims to find a balance. A number of factors are considered, such as the following:
- Relative wealth of each party, including the amount and value of separately owned property, as well as the value of the marital property
- Relative financial needs of each party
- Each party’s ability to earn a living
- Health and well-being
- Duration of the marriage
- Relative age
These determinations are very fact specific. They can get quite granular, and the evidence to support them can be personal. For example, a spouse might give up their career to stay at home and raise children. They would likely have a difficult time earning a living after a divorce. Similarly, one spouse may have a career and pay the bills while the other pursues a higher education or professional credentials. The differential in earning power from this effort might be significant.
In both cases, courts often divide the marital estate to benefit the spouse who gave up their own financial opportunities in favor of the other. Sometimes, courts consider issues, such as infidelity or domestic abuse, and award a smaller portion of the marital estate to the party whose actions caused the marriage to fail.
Are Gifts Considered Marital Property in Pennsylvania?
In Pennsylvania, gifts between spouses are considered marital property, except for a few specific items. If property is obtained during the marriage by gift or bequest, then it is considered to be property of the recipient. In contrast, according to Pennsylvania law, a gift given from one spouse to another during the marriage is considered marital property. Sometimes, lawyers and courts come to different conclusions and find a gift from one spouse to another to be the sole property of the recipient. However, gifts are typically considered marital property.
Who Gets the Wedding Rings?
When gifts are exchanged between spouses during the marriage, they become marital property belonging to both spouses because the money used to purchase the gift was most likely a marital asset. In these cases, gifts between spouses, both jewelry and otherwise, are considered marital property and subject to equitable distribution.
Wedding rings are different. Most of the time, the wedding rings are purchased before the official wedding ceremony. In this case, they are not necessarily part of the marital estate or considered to be marital property. If one spouse purchased both rings, then they might be able to keep their own ring and potentially lose the other ring to their ex-spouse. If both spouses contributed to purchasing the rings, then they may be determined to have been jointly owned before marriage and will be divided as part of the marital estate.
Is the Engagement Ring a Marital Asset?
The engagement ring is a symbolic representation of a promise to marry. Some courts found that engagement rings are conditional gifts. What does this mean as far as ownership and marital property? In this case, the completion of the act of giving the ring occurs after the marriage is established. This is often a conflicting matter in various courts. A knowledgeable lawyer will help determine if an engagement ring is considered a marital asset.
Even if an asset is owned by one spouse, they are not automatically able to retain ownership. While the value of the wedding and engagement rings may become parts of the marital estate, one party may be able to keep one or more of the actual rings by giving up another item to cover the value.
Negotiating Property Settlement Agreements
Many times, the issue of distributing tangible assets is something divorcing spouses can agree upon. It is unwise to attempt to do this without a lawyer. An attorney will help one understand how short-term and long-lasting issues impact a settlement. There can also be complex tax issues that can result in a settlement with hidden costs.
It is possible for a couple to come to a settlement agreement on portions of the marital estate. If this happens, a court can accept the settlement agreement and decide on the remainder of marital assets. It is important to approach settlement negotiations with confidence and with a reputable lawyer. Since Pennsylvania is an equitable distribution state, it is possible that the judge could reject the settlement or distribute the remaining assets to the other spouse. If one party would like to keep their wedding and engagement rings, a knowledgeable lawyer will be able to protect their rights.
Bucks County Divorce Lawyers at Freedman & Lorry, P.C. Help Clients Obtain Entitled Gifts During Divorce
Our experienced Bucks County divorce lawyers at Freedman & Lorry, P.C. help many clients with the distribution of assets during divorce. Wedding and engagement rings are often fought over, and we can help you obtain the gifts you are entitled. Call us at 888-999-1962 or complete our online form for a free consultation today. Located in Philadelphia, Cherry Hill, New Jersey, and Pinehurst, North Carolina, we serve clients throughout Pennsylvania.