It’s that time of year again when everyone is focused on giving (and getting) presents. These words of advice may leave you feeling a bit chilly, but here are some caveats to remember about gift giving at the holidays:
If an engagement ends without a resulting marriage—regardless of who called the whole thing off—the giver of the ring is entitled to have it back in New Jersey, and in a majority of other States, because the ring was a “conditional gift” given on the condition a marriage would result. Keep in mind that after you get down on one knee to propose, you may end up on both knees begging for the ring back if you propose on Christmas or Hanukkah, for example. If the receiver wants to keep the ring, he or she could allege that the engagement ring was intended as an unconditional gift—no “I do” required. So, if you give an engagement ring on a traditional gift-giving holiday, it might be harder to refute that it was actually a conditional gift.
What happens to gifts given during the marriage in the event of a divorce? The important thing to remember in this instance is: what’s yours is ours. Marital gifts between spouses are subject to equitable distribution, regardless of who bought the gift and regardless of what was done with the gift. So, it matters not that the soon to be ex-spouse never drove the sports car she bought for her husband; it is still an asset subject to equitable distribution in the event of a divorce.
The moral of this holiday story is—gift wisely.