Handbags and divorce: dividing luxury assets
With ownership of luxury goods becoming more commonplace, division of prize possessions during divorce is no longer an exclusive problem for the ultra-wealthy.
During divorce couples must declare all personal belongings which have a value of £500 or more, including handbags, watches, jewellery, clothing, and shoes. With the cost of many designer goods sitting comfortably above the £500 threshold, and more people investing in luxury items, so called ‘Handbag Divorces’ are on the rise.
Stowe Partner, Amanda Phillips-Wylds tells us more:
In divorce cases where individuals own a valuable collection of items, or a single item worth anywhere from £500 to many thousands of pounds and above, these items must be considered part of the asset base during financial disclosure.
If the value of these assets is disputed, professional valuations may be needed to establish their true worth, just as it would with property and other more traditional assets.
However, in my experience, couples that become fixated on personal belongings such as handbags and watches, or other possessions with sentimental value, almost certainly find that their divorce becomes more acrimonious, lengthy, and expensive.
Given the emotional connection to these types of belongings, some people can lose sight of the bigger picture very quickly and the typical big-ticket items such as house(s), pension(s), and capital, seem to cease to matter. Divorces of this nature can become very challenging to deal with:
- They are far more likely to take up a significant amount of court time
- Couples are far less likely to reach an agreement in the early stages of the divorce
- It can make the proceedings more litigious, spurring interim applications for expert evidence and valuations.
Prenuptial agreements can be helpful in cases where the couple already owns, or is likely to acquire during marriage, a significant number of high-value possessions. Prenuptial agreements can also specify what should happen to any belongings that are gifted between spouses.
Although prenuptial agreements are not currently legally binding in England and Wales, they are persuasive and likely to be upheld if specific criteria are met.
One ‘Handbag Divorce’ case that I worked on, involved a dispute over a Mulberry handbag retailing at around £1,300. The couple eventually agreed to auction it for charity, to resolve the matter. Whether it ever made it to the auction house, or not, I don’t know!
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