What happens to jewellery after divorce or separation?
The BBC have recently reported that High Court judge, Mr Justice Holman, has offered a £10,000 incentive to a London man, involved in divorce proceedings, to help his ex-wife locate four missing pieces of jewellery. The jewellery is said to be worth around £15,000 and consists of three rings and a bracelet. The husband claims his former wife has lost the jewellery, whereas she claims he has concealed the items.
Holman J had already decided the wife should receive 80% of the sale proceeds relating to the couple’s former matrimonial home said to be worth £350,000 and has given the husband until 16 December 2013 to find the jewellery, by whatever means, otherwise the wife will receive an extra £10,000 from the sale of the property.
As a family lawyer, clients will often ask me what will happen to jewellery, particularly their engagement and wedding rings, after divorce. In fact, jewellery can often present a barrier to settlement in divorce proceedings, especially if the value is significant in comparison to the size of the overall assets to be divided. The higher the value of the jewellery in comparison to the other assets, the greater the difference it may make to the overall financial settlement achieved. Whilst many couples may be able to divide their primary assets by way of agreement or court order, including a sale or transfer of their family home and sharing pensions and investments, the question of how to deal with jewellery can often be a thorny issue.
So how does the law deal with jewellery on divorce? Well, generally in divorce settlements unless it can be demonstrated that it was expressly intended to be returned to the giver in the event of the relationship breaking down, a woman’s jewellery is hers to keep regardless of whether it was bought or gifted to her. However, this has not always been the case and in the late 19th century wives had to return all of their jewellery, including engagement and wedding rings, in the event of their marriage ending. As such, the Married Women’s Property Act 1870 provided that if a husband gave his wife jewellery, then it was not to be owned by the wife but was purely for her personal decoration. The Act was repealed in 1882 by the Married Women’s Property Act 1882 and since then the law has treated women more favourably in relation to their jewellery following divorce.
With regards to engagement rings the law states that they are presumed to be an absolute gift to the receiver, unless it is proven that the ring was given on condition (express or implied) that it should be returned if the marriage did not take place for any reason – see section 3(2) of the Law Reform (Miscellaneous Provisions) Act 1970. For example, if an engagement ring is a family heirloom then it is an implied condition that it is not an absolute gift but conditional upon the marriage taking place. This means the engagement ring would have to be returned to the man if the wedding was called off and he can prove the ring was his family heirloom.
The law deals with gifts between engaged couples in a similar way so that if either of them make a gift to the other on condition (express or implied) that it should be returned if the marriage does not take place then they will not be prevented from seeking the return of the gift if the engagement is terminated – see section 3(1) of the Law Reform (Miscellaneous Provisions) Act 1970. This may apply in cases where a couple give token gifts to one another on their engagement, such as a watch or brooche.
If a couple wish to avoid a future dispute over jewellery in the event of their relationship breaking down then they should consider entering into a pre-nuptial or pre-civil partnership agreement, especially if there are certain family heirlooms or sentimental items which one spouse wants to retain in the event of the relationship breaking down.
If there is no pre-nuptial or pre-civil partnership agreement in place and a couple cannot amicably agree their financial arrangements on divorce or dissolution, then court proceedings may become necessary as in the above case reported in the BBC. In family court proceedings where an application for a financial order is made following the relationship breakdown (often referred to as ancillary relief), both parties will be required to make full and frank disclosure of their respective financial affairs. In the first instance, this disclosure is dealt with by completing a sworn Form E financial statement which sets out, with supporting documents, full details in relation to property, personal assets, investments, savings, liabilities, business assets, directorships, pensions and income.
The Form E deals expressly with personal belongings individually worth more than £500, including jewellery. The belongings must be itemised with details of their current value. Current value is usually interpreted as the reasonable re-sale value of the item as opposed to an insurance valuation.
As the above case reported in the BBC shows, the court will then look at the value of all the assets to be divided between the couple in order to achieve a fair division. The greater the value of the jewellery as compared to the total overall value of the other assets, the more likely it is to be taken into account. Similarly, if the court has reason to believe that missing jewellery has the potential to be re-discovered, incentives may be made to help locate the items otherwise the other party may be financially compensated with a greater share of the assets.
If you are unable to reach an agreement with your partner or former partner in relation to financial arrangements, including issues covered above, our experienced family law team can assist you in trying to resolve these issues through mediation, collaborative law, solicitor negotiations or court proceedings.
This article was written by Shelley Cumbers. If you require advice please email Kim Beatson or call 020 7940 4060.