9. What happens if my spouse transfers or gifts assets to our children prior to separation?
A transfer or gift to children before separation may be scrutinized carefully, particularly if it
appears designed to reduce the spouse’s net family property.
The analysis may include:
whether the gift was genuine;
whether both spouses agreed to it;
whether it was consistent with past family practice;
whether the spouse retained control over the asset;
whether the children actually received the benefit;
whether the transfer was made close to separation;
whether the transfer was intended to defeat equalization; and
whether the value should be notionally added back or addressed through an unequal
division claim.
If the transfer was legitimate and irrevocable, it may be more difficult to recover. If it was
artificial, concealed, or made in bad faith, remedies may include tracing, disclosure, forensic
accounting, preservation orders, and a claim that equal sharing would be unconscionable because
of intentional depletion of property.
