What happens to my jewellery in a divorce? A simple guide on how valuable personal items are distributed during a divorce proceeding15Mar2023
In divorce, what will happen to my personal valuables such as my jewellery, watches, bags?
Spouses are often concerned with whether they can keep their personal valuables upon divorce. Will I keep my engagement ring? Will I have to sell my watches, jewelleries or luxury handbags? These valuables may be of significant financial value but may also have a profound emotional attachment, such as in the case of family heirlooms.
In the absence of mutual agreement between the spouses, the issue will come before the Court in the divorce proceedings. The proceedings dealing with financial matters are called Ancillary Relief. In Hong Kong, the governing principles for Ancillary Relief claims have been well established.
The Court is required by section 7(1) Matrimonial Proceedings and Property Ordinance (Cap 192) to have regard to the conduct and all the circumstances of the case including the following matters:
- the income, earning capacity, property and other financial resources which each of the parties has or is likely to have in the foreseeable future;
- the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;
- the standard of living enjoyed by the family before the breakdown of the marriage;
- the age of each party to the marriage and the duration of the marriage;
- any physical or mental disability of either of the parties to the marriage;
- the contributions made by each of the parties to the welfare of the family, including any contribution made by looking after the home or caring for the family;
- in the case of proceedings for divorce or nullity of marriage, the value to either of the parties to the marriage of any benefits (for example, a pension) which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.
In the case of LKW v DD  13 HKCFAR 537, the Court of Final Appeal has laid down 5 steps in determining Ancillary Relief applications:
- identification of the assets and to ascertain the financial resources of each of the parties calculated as at the date of the hearing;
- assessment of the parties’ financial needs;
- if surplus assets would remain after the parties’ needs have been catered for, the next step in the exercise should generally be for the court to apply the sharing principle to the parties’ total assets, leaving the “needs” question previously considered to be dealt with under that principle;
- considering whether there are good reasons to depart from equal division; and
- when deciding the outcome, the court is not bound to depart from equality in the division of the parties’ assets even if one or more of the factors considered are engaged on the facts. The weight to be given to such considerations is a matter of discretion for the court.
To identify the asset pool of assets, spouses are required to make full and frank disclosure of their financial situation. Jewellery, bags, and watches will be disclosed as valuable items and their estimated values will have to be provided. Where parties disagree on the estimated value of an item or items, one way to resolve this is to obtain a valuation from a professional valuer or to appoint and conduct a joint valuation.
The Court will then decide within the proceedings how the matrimonial pool of assets should be distributed. There is no set of principles specifically guiding the split of jewellery or other valuable items. It will be determined on a case-by-case basis.
The Court will consider a variety of factors including, inter alia, the parties’ financial needs, each spouse’s earning capacity, the duration of the marriage, the timing of when the jewellery was acquired, and the source of acquisition. Where the jewellery was acquired during the marriage by one of the parties from a source wholly external to the marriage, such as by gift or inheritance, there may be arguments that the item should be excluded from the pool of matrimonial assets. There is no hard and fast rule as to whether such item should be excluded, it remains within the judge’s discretion, taking into account the variety of factors as stated above.
Where it is a short marriage, the court may well be inclined to regard gifted or inherited jewellery as excludable non-matrimonial property, and therefore should be kept by the spouse who it was gifted to or who inherited it. See the case of KB v MS (FCMC173/2015) where a piece of golden jewellery, valued HK$44,112.6, was a wedding gift from the Husband’s mother to the Wife. This is a short marriage that only lasted for 4 years before parties separated. Parties were both in their thirties and had sufficient earning capacities. The Court held that the gold belongs to the Wife.
In short, the Court will consider a variety of factors when deciding how jewellery should be dealt with during ancillary relief proceedings and each case differs based on its own facts. All items of significant value must however be disclosed and considered and must not be specifically excluded from disclosure. The ultimate concern of the Courts, however, is to reach a fair decision.
Joanne Brown and Joanne Lam
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Disclaimer: This publication is general in nature and is not intended to constitute legal advice. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.