The Law of Engagement Rings

It doesn't matter who you are, $24,000.00 is a good chunk of change. That kind of money can buy a lot of things: cars, boats, motorcycles – oh, and an engagement ring. A really…nice…engagement ring - just like the one purchased by a former client, who was shocked to learn how the law would treat it.

Minnesota law provides that an engagement ring is a conditional gift. The condition of the gift is marriage.

If the marriage does not occur, the condition of the gift is not satisfied. The ring must be returned to the giver. If the recipient refuses to return the ring, the giver may file a civil action against the recipient.

If the marriage occurs, the condition of the gift is satisfied, and the ring becomes the exclusive property of the recipient. Consequently, the value of the ring will not show up on the property allocation as part of a divorce among the parties – even if the ring has a substantial value.

If the parties to the marriage decide to upgrade the diamond, as many do, it's a mixed bag. The initial value of the ring remains the exclusive property of the recipient, as part of a divorce. The value of the upgrade, however, is considered a marital "investment" and, therefore, is subject to (usually) equal division among the parties.

Back to the basis for this post – what could my former client have done to ensure that the value of the engagement ring landed on the marital balance sheet?

There are two answers – one practical, and one destined to land you in the dog house.

The practical, transparent, option involves the execution of a prenuptial agreement that treats the engagement ring as marital property in the event of a divorce.

And, for the creative risk-taker, you could purchase a $25.00 Cubic Zirconia. After the wedding, you reveal the true character of the ring, and select a Saturday afternoon to head over to the jewelry store and "upgrade." Cue the trombone.