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 Vermont, which is not a community property state but rather an 'equitable distribution' state, property acquired during the marriage is typically considered marital property, regardless of how it is titled. However, gifts from one spouse to another during the marriage are generally presumed to be the separate property of the receiving spouse. This includes any income or additional property derived from the gifted property, such as stock dividends or splits. Vermont law recognizes that such gifts are owned by the receiving spouse and the gifting spouse usually has no right to recover them in the event of a divorce. However, substantial gifts relative to the couple's financial situation may be scrutinized differently. Vermont does not have a statutory scheme for 'transmutation' of property, which is a concept more common in community property states where marital property can be transformed into separate property through a written agreement. In Vermont, the intent of the parties and the circumstances surrounding the acquisition and use of the property will be important factors in determining whether property is marital or separate in divorce proceedings.