Who keeps Valentine’s Day gifts when the relationship ends?
What are you gifting this Valentine’s Day? Chocolates? Jewelry? It always feels good to give, but what happens to those gifts when a couple separates? Most people don’t care about the little things, but what about those big-ticket items? Few consider the fate of these gifts until the relationship actually comes to an end. Then, these questions come up, a lot!
In family law, there exists a basic presumption: family property is to be equally divided upon separation. However, there are exceptions to this rule for certain types of property, as provided under section 85 of the BC Family Law Act (the “FLA”). So, before you proceed to checkout, take a moment to make sure you are fully informed about your legal entitlements. It could end up saving you a lot of money and frustration down the road.
Family Property in General
Generally speaking, an outright gift from one person to another is considered the recipient’s property which seems simple and straightforward enough. However, it gets more complicated when a gift for a spouse is bought with 'family funds.' In family law, 'family funds' are understood to be the collective financial resources shared by a family or household. Consequently, a gift acquired with these funds is considered part of the family's property and remains subject to equitable division between the parties upon separation.
For couples in a cohabitating spousal relationship—either through marriage or by living together for more than two years—any property acquired or purchased during their relationship is also deemed family property. This includes any income earned by either person in the relationship.
Therefore, the notion of using 'my own money from my paycheck to buy a gift for my spouse' is legally oversimplified in the context of a spousal relationship. Despite whose name appears on the paystub, that income is considered family funds and using those funds to purchase a gift implies that the gift may not be excluded from division under family law, challenging the assumption that it remains the sole property of the recipient.
The most straightforward method to determine the division of gifts, or whether a gift should be kept or returned, is to specify this in a cohabitation agreement, pre-nuptial agreement, or marriage agreement. This approach provides both clarity and protection. You and your partner can decide together how to handle gifts exchanged between you, as well as gifts received from third parties or family members.
Excluded Property Under the BC FLA
Grasping the nuances of how gifts are treated upon separation requires a clear understanding of 'excluded property' as defined under section 85 of the FLA. This section delineates certain types of property that are not considered family property and thus not subject to division upon separation. Below is an excerpt from the FLA on what qualifies as excluded property:
[85] (a) Property acquired by a spouse before the relationship between the spouses began.
(b) Inheritances to a spouse.
(b.1) Gifts to a spouse from a third-party.
(c) A settlement or an award of damages to a spouse as compensation for an injury or loss, unless that settlement or award represents compensation for:
(i) a loss to both spouses, or
(ii) a lost income of a spouse.
(d) Money paid or payable under an insurance policy, other than a policy respecting property, excerpt any portion that represents compensation for
(i) a loss to both spouses, or
(ii) a lost income of a spouse.
(e) Property referred to in any of the paragraphs (a) to (d) that is held in trust for the benefit of a spouse.
(f) A spouse’s beneficial interest in property held in a discretionary trust
(i) to which the spouse did not contribute, and
(ii) that is settled by a person other than the spouse.
(g) property derived from property or the disposition of property referred to in any of the paragraphs (a) to (f).
In 2023, the FLA was amended to include the following subsection, under section 85:
(3) If property is excluded from family property under subsection (1), the exclusion applies despite any transfer of legal or beneficial ownership of the property from a spouse to the other spouse.
This amendment clarifies that property remains exempt from division, even when its legal ownership is changed to joint names or mixed into shared assets. If the property was originally a gift from someone outside the relationship or an inheritance—both typically excluded from division under section 85—it keeps its exempt status despite being officially shared.
To help clarify this further, let’s look at an example.
Imagine that before getting married, a spouse (let’s call him Alex) receives a Tesla from his parents as a birthday gift. According to the law, this car is Alex's personal property because it was a gift specifically to him, not to Alex and his spouse together. Now, after getting married, Alex decides to add his spouse, Jordan's name to the ownership documents, making it a joint property in legal terms.
Despite this change, the amendment to the FLA states that the car remains exempt from division if Alex and Jordan were to separate. This means that even though Alex has shared ownership of the car with Jordan by putting it in both of their names, the car is still considered Alex's personal property because it was originally a gift from Alex's parents. Therefore, in a divorce or separation, the car would not be split between Alex and Jordan, it remains Alex's sole property.
How Gifts Are Divided: A Closer Look
Determining the fate of gifts upon separation can seem daunting. To simplify, we've broken down the potential outcomes into a few straightforward scenarios. This guide will help you understand whether a gift remains a personal token of affection or family property subject to division.
SCENARIO 1
Gift giving while dating and not in a spousal relationship – either through marriage or by living together for more than two years.
How the gift is divided: This gift would be considered property that is solely owned by the recipient and not subject to division upon separation.
SCENARIO 2
Gift giving while in a spousal relationship – either through marriage or by living together for more than two years.
How the gift is divided: It depends, were family funds used to purchase the gift?
- YES – Then this gift would be considered family property and subject to equal division. The exception to this rule would be if there is a family law agreement in place specifying otherwise
- NO – Then this gift can be deemed as excluded property in certain circumstances and depending on the gift. Similarly, the exception to this rule would be if a family law agreement is in place specifying otherwise.
SCENARIO 3
Gift giving while in a spousal relationship – either through marriage or by living together for more than two years.
How the gift is divided: Was an exclusion used to purchase this gift (like an inheritance or any other exclusion provided under section 85 of the FLA)?
- YES – Then this gift can be deemed as excluded property in certain circumstances and depending on the gift. Similarly, the exception to this rule would be if a family law agreement is in place specifying otherwise.
- NO – Then this gift would be considered family property and subject to equal division. The exception to this rule would be if there is a family law agreement in place specifying otherwise.
Valentine's Day gifts can carry unexpected legal implications upon separation. Whether you're contemplating the purchase of a significant gift or seeking clarity on how gifts are divided in the event of a separation, the expertise of a seasoned family lawyer can provide invaluable guidance.
The family lawyers at Crossroads Law understand the nuances of family property division and can help to ensure your rights are protected. Our team is dedicated to offering clear, compassionate advice tailored to your unique situation. We invite you to take advantage of our 20-minute free consultation, where we can discuss the best approach for managing gifts and safeguarding your interests. Schedule your session with us today and ensure your Valentine's Day generosity stands the test of time, regardless of what the future may hold.
The information contained in this blog is not legal advice and should not be construed as legal advice on any subject. The information provided in this blog is for informational purposes only.
