In today’s world of technological advances and a craze to post photos on various social media platforms, it will be difficult to deny the existence of the jewellery altogether. It would also be difficult to come away from there being photos and videos of the occasions during which the jewellery was gifted…writes Sonal Parekh
With wedding session around the corner, many South Asian families will be purchasing gifts and in particular gold jewellery for the bride or groom, it’s a cultural tradition, both for sentiment and investment.
However, with the uptick in divorces in the British Asian community in recent years, I have more clients, and their families concerned about gifted jewellery. Questions that tend to arise are how the gifted jewellery is factored into the division of assets on divorce and whether or not this will be returned to them/their families.
English laws will apply to divorce and financial settlements, the Courts are not guided by customs and traditions. The Court (which is our yardstick in the first instance) will consider that where jewellery is gifted, it belongs to the person it has been gifted to. That being said however, it is likely to be considered as being part of the “matrimonial pot” and just with other matrimonial assets, the jewellery will be taken as being an available asset to one or other party. This is irrespective of the duration of the marriage.
It is only in rare circumstances where the Court will return a marital gift to a family, and the decision lies on clear intention. I.e. if an item was given to the recipient, but it was unclear if it was given as a gift or the intention was for it to be loaned. Therefore, it is wise for the recipient and their spouse to record the intention, upon receiving the item.
Often there is an expectation of a gift being returned upon divorce. It can be especially difficult when the gift is a family heirloom, and this can make negotiations over the split of the financial pot particularly fractious.
If there is limited finances and assets in the matrimonial pot, the Court could look at how the value of the jewellery (factoring in the costs of keeping it insured and safe) could be offset against other assets, to ensure the other spouse receives a fair financial settlement.
How and where do I list the jewellery during the financial settlement process?
Alongside the divorce, parties will need to resolve their financial matters and the division of matrimonial assets. This is through the financial disclosure process, where the couple will be asked to provide details of their assets, bank accounts, and their possessions worth over £500. This is to help the parties or Court decide how the matrimonial pot can be split fairly and ensure each party’s financial needs are being met moving forward.
That is why these items will still be factored into the matrimonial pot, even if one spouse was the recipient. For the gold item/s, the party who was gifted it will need to declare it and obtain a valuation (which is usually based on an item’s weight and price of gold at the time of the divorce).
What are my options if my spouse denies the existence/ possession of jewellery?
I have come across circumstances where a recipient will deny they have the jewellery, so it isn’t factored into the financial settlement, at the detriment to the other party, especially when it is of substantial value. I’ve also seen situations where the recipient does not possess the gold item/s, and their spouse retains it – who then deny they have it. In these circumstances the Court places the onus on the recipient to prove they do not have the item/s, which can be challenging.
In today’s world of technological advances and a craze to post photos on various social media platforms, it will be difficult to deny the existence of the jewellery altogether. It would also be difficult to come away from there being photos and videos of the occasions during which the jewellery was gifted.
If the Court believes the item/s are in the possession of the other spouse, despite their denials, they can order for it to be returned, and for it to be factored into the financial settlement, or order the other spouse to make a lump sum payment.
Once the financial settlement is agreed, a Consent Order is drafted by solicitors, which is sealed and approved by the Court. If the agreement is for a clean break, neither party will be able to make any further financial claims against the other in the future, it is in full and final settlement.
Can my family make a claim for the jewellery to be returned?
There is a chance the family who gave the gift might launch separate legal proceedings through the Civil Courts to obtain the gold item/s. If so, the recipient should seek indemnity from their ex-spouse to ensure it doesn’t cost them.
How do I protect the gift I am gifting my spouse?
1.Hold on to purchase receipts: evidence of purchase is important. Ask the jeweller to write a short description of the jewellery, the weight, the length of a chain, the carat, if it has precious gems.
2.Keep Photos: keep photos of each item, attaching these to the receipts would be useful as well. Photos are a great way of keeping a record of what was given and when.
3.Consider Pre or Post Nuptial Agreements: it is worth parties considering entering into one of these. It protects both in respect of the division of matrimonial assets and can give particular consideration to jewellery, its ownership and what happens on divorce.
4.Seek Early Advice: see your solicitor as soon as you can to understand where you stand on legal costs. I see clients arguing over sentiment and principle and this escalates costs disproportionally.
Sonal Parekh, Associate Solicitor in the Family Law team at SA Law
