Real property (real estate) or personal property (money, jewelry, art, stocks, bonds, etc.) given by one spouse to the other spouse during marriage is generally presumed to be a gift, and is the receiving spouse’s separate property. Such a gift includes all income and property from the gifted property—such as stock splits resulting in new shares of stock, and stock dividends paid. Because such transfers of property are separate property owned by the receiving spouse, the spouse who gave or gifted the property during the marriage generally cannot recover it or seek a credit or offset for it against the marital or community property.

But laws on spousal gifts during marriage vary from state to state, and especially with gifts that are substantial in value in relation to the income and assets of the spouses. And in some states the character of property as (1) separate property or (2) community or marital property can be permanently changed if there was a transmutation of the property by written agreement of the parties—an agreement in which the property was transmuted from community property to separate property, for example. A transmutation of real property may have to be recorded in the county records to be effective.

Laws regarding the characterization of property given by one spouse to the other spouse during marriage, and any transmutation of the property, are generally located in a state’s statutes, and often in the family or domestic relations code.

In Indiana, property acquired during a marriage is generally considered marital property, which is subject to division upon divorce. However, gifts from one spouse to another during the marriage are typically considered the separate property of the receiving spouse. This includes any income or additional property derived from the gifted property, such as stock splits or dividends. Indiana does not follow community property laws, which are only applicable in some states, but rather follows equitable distribution principles. This means that during a divorce, the court will divide property in a manner that it deems fair, which may not necessarily be equal. While Indiana law allows for the transmutation of property, where the character of the property is changed from separate to marital or vice versa, this typically requires a clear and convincing evidence of the spouses' intention to change the nature of the property. Such agreements should be in writing to avoid disputes about the property's character. It is important to note that substantial gifts might be scrutinized differently, and the context of the gift and the relative financial situations of the spouses may be considered. For specific guidance on how these principles apply to individual circumstances, consulting with an attorney is advisable.