Are Christmas presents marital property?

In Illinois, Christmas presents are generally not marital property and, so, not subject to property division in a divorce. There are exceptions, of course.

First, if the gift is made to both spouses, the court may consider it marital property. Second, when a gift is commingled with marital assets, it may convert from non-marital to marital property.

State lawmakers have tried to address all possible scenarios in statute, but the court still has some discretion. For example, say, husband deposits the cash he received from his grandmother — a non-marital gift — into the couple’s joint savings account, and the money in that account has long been earmarked for a kitchen remodel (in the house owned by both spouses). The day after the deposit clears, the couple splits up. Is that money his or theirs?

The court could go either way. In Illinois, this scenario creates a rebuttable presumption that it is marital property, because he clearly intended it to be used to improve the couple’s home. Still, it was a gift to the husband, and not much time passed between the deposit and the breakup. Because it is a rebuttable presumption, the court will classify the property as marital unless someone challenges the classification and proves to the court that it is non-marital property.

The key here is that the remodel will increase the value of the home (they hope). If the money were used for repairs that did not affect the value of the home or did not reduce the mortgage principal in some way, it could remain the husband’s non-marital property.

Credit card bills can be marital property, too.

Remember that the statute applies to both assets and debts. Generally, a debt acquired by the couple as a unit is marital property, while debts acquired by one spouse is non-marital property.

Credit cards may be the most pressing issue in a post-holiday separation. The same rules hold true, but the rules are subject to the credit card agreement more than the General Assembly. So, if the card is in one spouse’s name, the debt is that spouse’s non-marital property. It makes no difference if the money was spent on something for the house or a gift for the in-laws.

Joint accounts are marital property, and the credit card company will hold both spouses responsible for the balance. Credit counselors frequently advise against holding joint accounts for that very reason. The credit card company does not care that the couple is divorced. It only cares that it has not been paid. So, if a balance remains on the account after the divorce is final, both spouses are still responsible. If one spouse does not pay his or her share, the other must pay the entire amount.

Research has shown that many couples wait until after the holidays to file for divorce. Waiting to file, however, does not mean all the planning has to happen after the holidays. Making decisions about gifts and purchases in advance could save time, money and aggravation later.

Source: 750 ILCS 5/503 Disposition of property (eff. 1/1/16)

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