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Are diamonds forever?

heart, flower background, crown-2945406.jpg

…diamonds may well be forever, but the question in family law financial matters, is whom gets to keep jewellery:

  • if couples were engaged, and the engagement is broken off, or
  • the couples were married, enter into civil partnership and divorce proceedings, dissolution, or separation ensues

Should the parties really be thinking to each keep one cufflink? Split the pearls in a pearl necklace?

It is trite law that what is purchased or attained during the time of the marriage, is considered part of the matrimonial estate. Is that the case with jewellery?

Jewellery is given with emotion. One hopes it is gifted out of love and affection. Sometimes it is a guilt offering. We can speculate forever and a day on the whys and wherefores. Holding on to such items becomes hugely personal and is often the subject of much dispute between divorcing couples.

Financial disclosure and re-sale value of jewellery (not value for insurance purposes), in a financial divorce:

Whatever the reason or intention behind ownership of jewellery, they must be disclosed during financial statements in Form E.

Belongings worth more than £500 must be itemised with details of current values: The re-sale value of each item, as opposed to valuations for insurance purposes.

Historically, in the jurisdiction of England and Wales, the Married Women’s Property Act 1870 provided that a woman owning jewellery provided by her husband remained his, because all he was doing was decorating his wife, akin to baubles on a Christmas tree…Such an Act of Parliament was thankfully short-lived and was repealed by the Married Women’s Property Act 1882.

The court has jurisdiction and power to settle disputes between married couples about property. This is generally set out at Section 25 of the Matrimonial Causes Act 1973.

The Law Reform (Miscellaneous Provisions) Act 1970 (‘the 1970 Act’) provides greater insight as to treatment of jewellery in a contemplated marriage:

Where the couple was engaged, but did not marry and claim beneficial interest in property:

Section 2 of the 1970 Act permits the court to decide upon property between two people who were engaged to be married and claim beneficial interests in property. In such circumstances, the court will treat property of engaged couples, as if they were married, but be aware that any such claims need to be made within three years of termination of the engagement. Such a dispute would be brought under Section 17 of the Married Women’s Property Act 1882, (‘MWPA’) and section 7 of the Matrimonial Causes (Property and Maintenance) Act 1958.

Family heirlooms are presumed to be a conditional gift:

In many cultures, items of jewellery are passed down from one generation to the next. There is a presumption that in those circumstances, it is a conditional gift to be returned back to the family upon termination of an engagement or marriage. [See section 3 (1) of the 1970 Act].

Engagement rings is presumed to be an absolute gift:

The gift of an engagement ring is presumed to be an absolute gift, unless it can be shown 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 1970 Act].

Ownership and interest:

Section 17 MWPA provides a procedural route to determine rights of couples in marriage, civil partnership, and those couples engaged, where the engagement has been broken off. The procedural route is open irrespective of a claim for divorce, dissolution, or separation, which are not available in any event to those who were engaged, and did not marry, but have disputes of property interest between them.

Overall fairness: What is the value of jewellery in context to the overall value of the matrimonial estate?

The courts will look at the overall fairness of the value of the matrimonial estate to be divided using Section 25 factors set out in the Matrimonial Causes Act 1973.

If for example, the couple’s fortune and assets are in watches and jewellery, more weight will be placed upon a division of those watches and jewellery, than if such watches and jewellery were but a small proportion of the matrimonial estate.

How best to broach, (not brooch) the subject of jewellery:

It is best to have in place a pre-nuptial agreement which sets out who owns what, and what happens in the event of a breakdown of marriage, so as best to avoid such thorny questions, when anger and frustration often take over logical emotional intelligence between the parties.  

Professor David Rosen is solicitor-advocate and principal of David Rosen & Co. He is a member of Resolution, as well as the Society of Legal Scholars. He continues to lecture at Brunel University as a full academic Professor of Professional Practice at Brunel Law School.