Don’t look a gift Porsche in the mouth…

Some states, such as California, are “community property” states where married couples share an equal and undivided interest in almost everything they acquire during the marriage, except for gifts. This led to an interesting divorce case over who owned a sports car that a wife had arguably given her husband as a gift.

While the couple was married, the husband bought a Porsche using $60,000 that the wife had received from the sale of her pre-marital home. The couples’ friends assumed that the car was a gift from the wife because it was purchased shortly before the husband’s birthday. When the couple divorced, the husband argued that the car was his separate property. But a California appeals court said the Porsche was “community property” because the wife never signed a document waiving her right to be reimbursed for her separate-property contribution to the purchase of the car.

Because the purchase of the Porsche could be traced entirely to the wife’s separate funds, the court said that she had a right to be reimbursed for that money.