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 New Mexico, property acquired during marriage is typically considered community property, meaning both spouses have an equal interest. However, if one spouse gifts real or personal property to the other, it is presumed to be separate property of the receiving spouse. This includes any income or additional property derived from the gifted asset, such as stock dividends or splits. Despite this presumption, the characterization of property as separate can be complex and may depend on factors such as the value of the gift relative to the couple's assets and income. New Mexico law also recognizes the concept of transmutation, where spouses can agree to change the nature of the property from community to separate through a written agreement. For real property, recording this agreement in county records may be necessary to effectuate the transmutation. These rules are generally found in New Mexico's statutes, particularly within the family or domestic relations code.