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 Pennsylvania, which is an equitable distribution state rather than a community property state, property acquired during the marriage is generally considered marital property, subject to division upon divorce. However, gifts from one spouse to another during the marriage are typically regarded as 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. The presumption is that such gifts are intended to be separate and not subject to division during divorce proceedings. However, the characterization of property can be complex and may be influenced by factors such as the value of the gift in relation to the couple's overall assets and income. Additionally, spouses in Pennsylvania can change the nature of the property from marital to separate through a process known as transmutation, which usually requires a written agreement. For real property, recording the transmutation agreement in county records may be necessary to ensure its effectiveness. It's important to note that the specifics of property division can vary based on individual circumstances, and consulting with an attorney can provide guidance tailored to the situation at hand.