Guest author James P. Ryan writes today:
Divorce clients frequently ask questions about their jewelry, such as: "Is the jewelry I inherited from my family my separate property?" or "Is my jewelry given to me by my husband my separate property?"
There is no special statute that discusses jewelry, or any other type of property. So it can be said that jewelry is subject to the same “rules” as everything else. That means the court (or the parties, before the issue gets to court) must “classify” all property as either marital or separate. Most property is acquired by the parties during the marriage, using income earned during the marriage. Thus, most property is marital. And marital property is usually divided between the parties “congruently” (meaning, roughly 50-50).
But the courts look differently on inherited assets, and on gifted assets like jewelry that are meant to be used and enjoyed by only one of the parties.
The answer to the first question is fairly certain. Inherited items are not acquired through the use of marital funds. Instead, they are the result of someone else’s benevolence: a gift. Jewelry, which has no “title”, and which is intended to be used and enjoyed by only one of the parties, is almost always held to be separate property, and is not subject to division. In other words, if your mother wanted you to have her diamonds, she gave them to you for your express and exclusive use. But if you sold them and used the money to improve your jointly titled marital dwelling, then you've commingled this asset with the marital estate and it becomes joint marital property subject to division. See, for example, Charlton v Charlton, 397 Mich 84, 94; 243 NW2d 261 (1976), holding that if one party during a marriage acquires a gift or inheritance, it is within the trial court's discretion whether to include it in the marital estate. If the gift or inheritance was commingled with the marital property or used for joint purposes, the trial court may, in its discretion, include it in the property distribution. Id.
The second question can be a little more difficult to answer. One can take the position that a gift from one spouse to the other of a personal item meant for the sole and exclusive use of the recipient is separate property. For example, if a husband bought his wife a diamond ring as a birthday or anniversary gift, this jewelry, under prevailing Michigan case law, is the wife's separate property. She is to keep it and doesn't have to compensate her husband for half of the value of the jewelry. This is especially so if the husband used his separate property (like premarital savings) to buy the jewelry, because he has “converted” his separate property into her separate property. But it can also be true even if marital funds were used - in which case the wife has in effect already “paid” half the cost.
When considering the issue, a trial court may consider itself to be bound by Michigan case law. The cases most often cited are:
Bloss v Bloss, 187 Mich 425; 153 NW 666 (1915) where items of small value (such as a spittoon) given to the husband by his relatives were restored to him by the Court. Download Bloss_v._Bloss
The same result occurred in Darwish v Darwish, 100 Mich App 758; 300 NW2d 399 (1980). In that case, argument over what was separate property was mostly concerned with household items and wedding gifts. The Court of Appeals did, however, exclude items of personal use and adornment. Download Darwish_v._Darwish
Since the above cases were decided, many unpublished opinions have been released by the Court of Appeals. A trial court may, if it finds that an unpublished case is "instructive" because of the similarity of its facts, adopt its results. See, e.g., Brown v. Loveman, 260 Mich App. 576, 680 N.W.2d 432 (2004) at footnote 9, where the Court of Appeals stated: “We view this case as persuasive, because of the limited case law, but note that unpublished opinions are not binding under the rule of stare decisis. MCR 7.215(C)(1).” Download Brown v Loveman
Some of the clearer unpublished decisions of the Michigan Court of Appeals (COA) dealing with the question of whether jewelry is the separate property of one of the parties or is joint marital property to be distributed, are these:
Deyarmond v Deyarmond: (Unpublished, COA Docket #248929, January 13, 2005) The COA found "no clear error in the trial court treating each party's jewelry as separate property." Download Deyarmond_v._Deyarmond
Tuinstra v Tuinstra: (Unpublished, COA Docket #258091, March 14, 2006). This lengthy decision includes a section concerning jewelry, where it is noted that "if one party during a marriage acquires a gift or inheritance, it is within the trial court's discretion whether to include it in the marital estate." And, if it is commingled, it may be included in the marital estate. In this case, the wife testified that she received the items as gifts from the husband. The husband's testimony that marital funds were used to buy them was insufficient to make them marital property, and thus it was not error for the trial court to award them to the wife as her separate property. Download Tuinstra_v._Tuinstra
See also Hackert v Hackert, unpublished opinion per curiam of the Court of Appeals, (May 5, 1995) (Docket No. 153308), which cites Bloss and Darwish (jewelry and part of a doll collection given to the wife by the husband during the course of the marriage were items of personal use or adornment, and therefore separate property of the recipient spouse). Download Hackert v Hackert
Francis v Francis, unpublished opinion per curiam of the Court of Appeals, issued June 13, 1995 (Docket No. 150780) (husband’s gift to wife of a diamond engagement ring was wife’s separate property).
Guest Author James P. Ryan is a Michigan lawyer whose primary practice is in Family Law. His contact information is: James P. Ryan (P27956), 905 West Ann Arbor Trail, Plymouth, MI 48170, Ph: (734) 459-9300, Fx: (734) 459-1780, jim@jamespryan.com, http://www.jamespryan.com
