The issue of whether a car given to the parties' child during the marriage was properly included in the marital estate was recently addressed by the Mississippi Appellate Court in Terrell v. Terrell, 133 So. 3d 833 (Miss. Ct. App. 2013), cert denied, 133 So. 3d 818 (Miss. 2014).
In the Terrell case, the parties purchased an automobile during their marriage with marital funds for their daughter. Upon purchase, the vehicle was titled in their daughter’s name, remained in her possession and used by her while in college. Yet, during the parties’ divorce proceedings, the husband contended that since marital funds were used to purchase the car, it should be deemed marital property and included in the marital estate for division purposes. The trial court agreed with the husband and included the value of the vehicle in the wife’s share of assets subject to division. The appellate court reversed, holding that the vehicle should not have been deemed a marital asset since it was clear that the parties did not retain ownership and control over it. In reaching its’ conclusion, the Mississippi Appellate Court focused on title to the vehicle being placed in the daughter’s name with the daughter maintaining sole use and control over the vehicle—finding it was not a shared family vehicle with the daughter simply permitted use of same.
While not dispositive of how a New Jersey family court might handle this issue, the takeaway from this decision is that parents need to be clear as to whether they intend to make a “gift” of an automobile to their child and if so, be clear as to whether they are relinquishing control of it to their child or whether the intent is only to allow the child to have use of a “family vehicle”. According to the Mississippi Appellate Court, those elements are relevant in determining whether the value of the vehicle should be included in the marital pot or not for division purposes.