What happens when one spouse in a marriage receives a gift or inheritance? Does it automatically become jointly-owned? During the marriage it may not seem to matter, particularly when the inheritance or gift is being enjoyed by both parties. But unlike other marital property, inheritances and gifts are subject to a different standard for division. While there is a “presumption of equal contribution” applied to other marital assets, inheritances and gifts are not subject to that presumption. Instead, the court must analyze the circumstances to determine a just and proper division.

The question of how a court should treat an inheritance or a gift was recently before the Oregon Court of Appeals, in Schwindt v. Schwindt (290 Or App 357 (2018)). Jill Brittle was the trial lawyer and represented Wife. At trial, Husband took the position that his stock in the family business was gifted to him, and thus the presumption of equal contribution did not apply. He argued he should receive 100% of the business assets without any offset to Wife. At trial, Wife put on strong evidence to support her claim that the stock was not a gift at all, but rather was purchased by the parties during the marriage. The trial court found Wife to be credible, and ruled that the stock was not a gift, but rather a purchased asset of the marriage. Furthermore, the trial judge did not stop there. She went on to rule that even if the stock had been a gift, it would still be just and proper to treat the business as a joint asset and award a portion of the business value to Wife.

Like in all family law cases, the devil is in the details. In this particular case, the trial judge noted that the parties treated the business bank account as if it were their personal bank account, paying their normal living expenses directly from the business. Additionally, Wife worked for the business and the evidence reflected that she relied on the business as a joint asset. Thus, “commingling” was a key factor.

After trial, Husband appealed the trial court’s decision. Jill Brittle and former partner Adam Brittle appeared before the Oregon Court of Appeals and argued on behalf of Wife. The Court of Appeals upheld the trial court’s decision on behalf of Wife, and clearly stated that “[E]ven when property has been gifted to one spouse, a trial court nonetheless retains the discretion to divide that asset equally based on a consideration of what is just and proper under all the circumstances.” Schwindt at 369.

How might the Schwindt ruling apply to your case? Is there evidence of commingling of an inheritance or gift? Or has the asset been kept wholly separate? Are there other good reasons to divide the asset? In every family law case, the court is ordered to divide assets in a just and proper manner. What that means varies dramatically from case to case and is very fact specific. Do not assume that your inheritance or gift will be solely yours, even if there has been no commingling. Contact one of our family law attorneys today to set up a consultation to learn more.