Divorce proceedings can be a challenging and emotional process, particularly when it involves the division of luxury assets. High-value properties, expensive cars, fine art collections, jewellery, and additional luxury items can complicate the process. This blog will guide you through the essential steps and considerations when dividing luxury assets on separation.
Marital vs. non-marital assets
The initial step in dividing luxury assets is to distinguish between marital and non-marital assets. Marital assets are generally those assets acquired during the marriage. On the contrary, non-matrimonial assets tend to have been acquired before the marriage or received as gifts or inheritances. It’s very important to identify which assets fall into each category, as this will significantly impact the division process.
What must be disclosed in divorce proceedings?
During divorce proceedings, couples must declare all personal belongings worth over £500. This includes items such as handbags, watches, jewellery, clothing, and shoes. With many designer goods exceeding this threshold and more people investing in luxury items, the phenomenon of ‘Handbag Divorces’ is becoming more prevalent.
If the value of these assets is disputed, professional valuations may be necessary to determine their true worth, similar to how property and other traditional assets are appraised.
Due to the emotional attachment to these items, people can often lose sight of the bigger picture, making assets like houses, pensions, and capital seem less important. Divorces of this nature present significant challenges, such as:
- They are more likely to fill a substantial amount of Court time
- Couples are less likely to reach an amicable agreement early in the divorce process
- The dealings can become more argumentative, leading to interim applications for expert evidence and valuations
Prenuptial agreements
Prenuptial agreements can be a good idea for couples who already have high-value possessions or are likely to acquire such items during their marriage. These agreements can also specify what should happen to any belongings gifted between spouses.
Although prenuptial agreements are not currently legally binding in England and Wales, it’s important to note they are persuasive and likely to be upheld if specific criteria are met.
As a general rule, any assets that are acquired during the course of the marriage are added to the overall matrimonial pot (including designer items).
How can we help?
Naomi Bond is an Associate & Solicitor in our expert Family Law Team.
If you need advice on any divorce-related matter or have any other family law-related queries, please contact Naomi or another member of the team in Derby, Nottingham, or Leicester on 0800 024 1976 or via our online form.
Naomi or the team will be happy to discuss your circumstances in more detail and give you more information about the services that our Family Law team can provide along with details of our hourly rates and fixed fee services.
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