Originally Posted by
bloodyeyeballs
Perhaps you should look at it a different way. The seat belongs to the airline. They are offering it to you as an elite and if you cannot use it, they would prefer to offer it to the next elite. You have possession of the seat and certainly can give it to whomever you choose, but this does violate the spirit of the gift.
The only problem is that once you are upgraded, your Y seat next to your spouse has already been taken. In cases where it is still open, I ask to be moved back. If that seat happens to be in the bulkhead or exit row, the odds are that the person who takes your seat has status.