What is your question?
If you want the watch, hire a lawyer and dispute the claim.
Also, your divorce decree may provide that you are awarded all personal property (which would include the watch) that is currently in your possession.
The personal comment about her lawyer or what she does with money are irrelevant and not appropriate for here (or anywhere)
Her lawyer is right to the extent that if you want to prove it was a gift to you and not divisible community property then it is your burden to prove that. Otherwise, your option is to work out a division of property that results in your keeping the watch.
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