Opinion ID: 2587569
Heading Depth: 3
Heading Rank: 1

Heading: Interspousal Gifts

Text: At issue in this case is whether gifts made from one spouse to the other during the course of the marriage necessarily constitute marital property. We conclude that they do not. The Act expressly lists among its exceptions to marital property any property received by gift during the marriage. § 14-10-113(2)(a). The Act does not, however, specify whether interspousal gifts, or only those received from third parties, are excluded from the definition of marital property. Although we have not previously addressed this issue, the court of appeals has held that when one spouse causes title to be placed jointly with the other spouse, a gift to the marriage is presumed, and such property constitutes marital property. In re Marriage of Moncrief, 36 Colo.App. 140, 141, 535 P.2d 1137, 1138 (1975) (holding a family residence placed in joint tenancy but purchased with funds the husband had accumulated solely through his own efforts prior to the marriage was presumed be a gift to the marriage and thus, marital property). The court of appeals reiterated this principle in In re Marriage of Stumpf, 932 P.2d 845, 848 (Colo.App.1996). In Stumpf, the court of appeals joined the majority of jurisdictions that have concluded that transfers between spouses which create joint tenancies are not excepted as gifts from property otherwise deemed to be marital, rather than separate in nature. Id.; see, e.g., Turpin v. Turpin, 403 A.2d 1144, 1146 (D.C.App.1979); Conrad v. Bowers, 533 S.W.2d 614, 623 (Mo. App.1975); Pascarella v. Pascarella, 165 N.J.Super. 558, 398 A.2d 921, 924 (1979); McLean v. McLean, 323 N.C. 543, 374 S.E.2d 376, 382 (1988). The Stumpf court reasoned that such a conclusion comports with the fundamental concept underlying the Act that marriage is a partnership or shared enterprise, and that the division of property should be based, in part, upon the relative contributions of the parties. 932 P.2d at 848. Later, however, the court of appeals clarified that not all interspousal gifts should be deemed marital property. In re Marriage of Bartolo, 971 P.2d 699, 701 (Colo.App.1998). The property at issue in Bartolo was transferred to the husband and the wife by the wife's mother, and placed in joint tenancy. Id. at 699. When the couple began experiencing difficulties, however, they executed a quitclaim deed conveying the property to the wife. Id. at 700. The Bartolo court distinguished between property that has been placed in joint tenancy during the marriage by one spouse, such as the property in question in Stumpf, from property that once was titled in joint tenancy but was later transferred by the couple to only one spouse. Id. The court held that while the former type of property was a gift by one spouse to the marital estate, and thus presumed to be marital property, the latter type was not necessarily marital property. Id. In doing so, the court reasoned that the Act's presumption that all property acquired during the marriage constitutes marital property can be overcome by clear and convincing evidence that an interspousal transfer was intended to be a gift. Id. We are persuaded by the court of appeals' reasoning in Bartolo. Because the Act does not specify whether interspousal gifts are excepted from its definition of marital property, and because such gifts are often purchased with marital funds, [2] we conclude that an interspousal transfer cannot be presumed to be a gift that is exempted from the definition of marital property. Conversely, not all interspousal gifts can be presumed to be marital property. Property that is placed in joint tenancy by a spouse during the marriage reflects an intent by the donor spouse to make a gift to the marriage. Stumpf, 932 P.2d at 848; Moncrief, 36 Colo.App. at 141, 535 P.2d at 1138. Thus, such property may be presumed to be marital property absent clear and convincing evidence to the contrary. In contrast, when determining whether transfers of property from one spouse to the other, such as that of the jewelry and furs at issue in this case, constitute marital property, a court must first determine whether the transfer was a gift to the other spouse, and therefore excluded from the definition of marital property under the Act. In order to qualify as a gift, a transfer of property must involve a simultaneous intention to make a gift, delivery of the gift, and acceptance of the gift. J. Thomas Oldham, Divorce, Separation and the Distribution of Property § 6.02[3][a] (2001); see Moseley v. Moseley, 795 S.W.2d 464, 467 (Mo.App.1990); Grimsley v. Grimsley, 632 S.W.2d 174, 178 (Tex.Civ.App.1982). Having concluded that a transfer of property from one spouse to the other that is not placed in joint tenancy may constitute a gift and thus be excluded from the definition of marital property, we agree with the court of appeals' determination in this case that the trial court erred in concluding that all interspousal gifts constitute marital property. See Balanson, 996 P.2d at 223. We disagree, however, with the court of appeals' holding that such error was harmless. The court of appeals determined that the trial court's error was harmless because of the trial court's alternative finding that even as separate property, the gifts constituted an economic circumstance of Wife that was relevant in determining an equitable property division. See id. As discussed above, the disposition of marital property requires (1) a determination as to whether an interest constitutes property; (2) if so, a classification of such property as marital or separate; and lastly (3) an equitable distribution of the marital property after considering a variety of factors, including the economic circumstances of each spouse. The value and income-generating potential of a spouse's separate property may constitute an economic circumstance in determining an equitable distribution of marital property. However, a determination that separate property constitutes an economic circumstance, without further findings as to how consideration of that economic circumstance leads to an outcome identical to that resulting from a determination that such property is marital, fails to comply with the Act's requirement that an equitable division of martial property follow a preliminary determination as to whether such property is marital or separate. We thus find that the trial court's error, when viewed in light of other errors in making its property division, was not harmless. Because the trial court did not make any specific findings as to its alternative conclusion that even as separate property, the gifts had been considered as an economic circumstance, this conclusion does not mitigate the harm of its error. In the absence of such findings, we are unable to ascertain how the trial court's consideration of the gifts as merely an economic circumstance would result in a division of marital property that is identical to one in which such property were considered to be marital property. The trial court had valued the interspousal gifts of jewelry and fur at $60,000, or less than two percent of the overall marital estate as valued by the trial court. When viewed, however, along with other property division errors discussed below, over twenty percent of the value of the overall marital estate was affected by the trial court's errors. See infra p. 42. Thus, we find that the trial court's error with regard to Husband's interspousal gifts to Wife, when viewed in light of its other errors, is not harmless, but reversible.