In certain cultures, it is common for the families of a future husband to give gifts of gold jewelry to the future wife, prior to the actual date of the marriage. Often these items of jewelry are family heirlooms that have been passed down through generations, and have sentimental value to the husband’s family.
While it is not uncommon for the husband’s family to make it known, informally, that the jewelry is a gift, but is truly intended to be held in trust to be passed on to the future couple’s children, difficulties can and do arise when the marriage breaks down before the jewelry has been passed on to the next generation. Often, upon the breakdown of the marriage, the informal agreements to hold the jewelry in trust are disputed, and the jewelry becomes to the subject of conflict and litigation.
The unfortunate reality is that in the absence of any written or provable agreements that jewelry gifted to the future wife prior to the marriage is not intended as an absolute gift, the provisions of the Matrimonial Property Act will typically govern. The Matrimonial Property Act is the legislation in Alberta that governs and sets out the law in relation to how property should be divided upon the divorce of two parties. Along with legislating how property should be divided, the legislation also defines what constitutes “Matrimonial Property” and what property held and owned by married persons might be exempt from division at the end of the marriage – effectively, what property is not considered property of the marriage.
More specifically, under section 7(2) of the Matrimonial Property Act, property that is exempt from being divided is defined as property that is:
- property acquired by a spouse by gift from a third party;
- property acquired by a spouse by inheritance;
- property acquired by a spouse before the marriage;
- an award or settlement for damages in tort in favour of a spouse, unless the award or settlement is compensation for a loss to both spouses; or
- the proceeds of an insurance policy that is not insurance in respect of property, unless the proceeds are compensation for a loss to both spouses.
Given that property acquired by a spouse before the marriage is considered to be outside of the category of “Matrimonial Property” that has very specific significance for gifts from one future spouse to another, or from the family of a future spouse to the fiancée. Literally, and legally speaking, this means that engagement rings, and any other jewelry that might be given to a fiancée from their future spouse or that future spouse’s family are exempted from distribution at a divorce, and can be retained outright and solely by the spouse that received the gifts prior to the marriage.
This can lead to unintended results by parties, or the families of divorcing parties. If there has been no specific agreements documenting the intentions in gifting family heirlooms to be held in trust for future children, then quite often their will not be enough evidence for a Court to conclusively determine that the gift of jewelry was intended as a contingent gift and not an absolute gift. In such a case, it is often the spouse who received the gift of the other spouse’s family heirlooms who gets to keep the jewelry.
The best way of ensuring that such inadvertent results do not occur is to enter into a proper written agreement between all parties documenting the items being gifted and any conditions upon the items as gifts, who they are intended to ultimately be provided to, and whether such circumstances, such as a divorce, require the return of the gifts, or the immediate transfer of the gifts to any offspring of the parties.
While it may seem less than romantic to require written agreements to accompany gifts to a future member of a family, the courts are often presented with the fallout from families and parties who do not specify their intentions on gifts and the decisions made by the courts often leave parties wishing that they had protected themselves.
If you are about to get married and looking to protect family heirlooms that may be gifted to your fiancée, Mincher Koeman LLP has the lawyers who are able to quickly, simply, and efficiently provide you the legal advice and the protection you need to ensure that your family’s traditions and heritage are protected. Give us a call at 403-910-3000 or email us at email@example.com.