Engagement Rings: To Have and To Hold – and To Keep?
The Matrimonial Property Act (the “Act”) sets out how property is to be distributed between married spouses in Alberta upon their separation or divorce. The Act provides that property is to be distributed equally between spouses unless the property is enumerated as being (1) exempt or (2) distributable in a just and equitable manner.
Property acquired by a spouse before marriage is exempt from distribution and any property acquired by a spouse as a gift from the other spouse is to be distributed in a just and equitable manner. Engagement rings fall into both of these categories as being acquired by the wife prior to marriage and as a gift from the husband to the wife. As such, the ring remains property of the wife upon dissolution of the marriage and is not distributable as between spouses.
In keeping with the distribution scheme set out by the Act, it is a well-established principle in Case Law that engagement rings gifted from husband to wife prior to marriage are exempt from distribution.
A recent Alberta Court of King’s Bench decision clarifies further that both engagement rings and wedding rings are gifts from the husband to the wife prior the marriage and so are exempt from distribution as being property of the wife acquired prior to the marriage.
As always, there are exceptions to the rule:
Given the unusual circumstances set out in McManus v McCarthy, the Court felt a decision would have to be made considering the evidence presented and not using the normal rule under which engagement rings are not subject to distribution between the parties upon marriage breakdown.
The parties had been engaged four times over 18 months and as a result the husband had purchased three rings. Upon the fourth proposal, and on three occasions in total, the husband made it clear to the wife that the ring was conditional on them remaining engaged and married and that the ring was to be returned to him in the event that their relationship ended. The parties were married, but separated just nine days later.
The Court made a finding that the ring was a gift by the husband to the wife conditional on the relationship continuing. The ring was returned to the husband.
What if the parties separate before marriage?
Engagement rings are viewed to be gifts conditional upon marriage. The Family Law Act sets out that fault as to why a marriage failed to occur is a relevant consideration in determining how an engagement ring is to be treated:
- 102 If a person makes a gift to another person in contemplation of or conditional on their marriage to each other and the marriage fails to occur, the question of whether the failure was the fault of the person making the gift shall not be considered in determining the right of that person to recover the gift.
In addition to fault, Courts have also considered whether a gifted ring is in fact conditional upon marriage, that being whether or not it is truly an “engagement” ring.