Designer Divorces – who gets the handbags?

As the price of luxury goods soars, high-end accessories are becoming some of the most fought-over assets when couples split. Handbags are selling for hundreds of thousands of pounds, which can make them one of the most substantial assets a couple has, alongside pensions and larger assets. The battle over these hotly contested items has even been given its own name, the very media-friendly ‘handbag divorces.’ As family lawyers, we are noticing that it is increasingly common for high-end items to become the cause of much contestation during divorce proceedings. With the value of designer goods increasing substantially, they are sometimes becoming a key feature of a settlement.

Part of the process to obtain a financial settlement in a divorce is full disclosure of all the assets and debts of a marriage. Within this, you must declare all belongings which have a value of £500 or more. Many designer handbags, watches and shoes fall comfortably within that bracket and, in some cases, significantly exceed it.

In some situations, there may be a valuable collection of items or a single item worth tens or hundreds of thousands of pounds, and these must also be considered. If disputed, professional valuations may be needed to establish their true worth, just as you would a house or a pension.

People can sometimes become preoccupied with personal belongings when they have some form of sentimental value attached to them, for example, if it was a gift or marked a milestone. Sadly, this situation can frequently result in divorces becoming more acrimonious, lengthy and expensive.

The law regarding gifts given between spouses during the marriage is clear; they count as matrimonial property and will be added to the pot. The position is different if you receive a gift from a third party during the marriage.  These do not count as matrimonial property.

People can sometimes lose sight of the bigger picture very quickly during a divorce, especially when large assets are involved like house/s, pension/s, and capital. Those situations can often become very challenging and can often take up a significant amount of court time, especially if alternative dispute resolution methods like Mediation or the Collaborative process are not being used and couples can’t find a way forward other than through the courts. It’s always better from an emotional and financial perspective to try and reach agreements regarding the distribution of assets in an amicable way and not involve going through the courts, where possible.

In order to minimise disputes occurring if a divorce were to occur it’s always advisable to put in place a prenuptial agreement prior to the marriage taking place, or a postnuptial agreement after the marriage, especially when there are larger assets or items that have sentimental value. A prenuptial agreement is a document made by a couple before their marriage (or Civil Partnership) which sets out how their assets will be dealt with upon divorce/dissolution, basically they establish who comes out with what if a divorce were to occur.

Prenuptial agreements (prenups)

Once the preserve of the super-wealthy, prenups are on the rise and can be helpful in cases where the couple has or will acquire a significant number of high-value items during the marriage. They can specify what should happen to these items if they are gifted between spouses.

A prenuptial agreement is not legally binding in England and Wales. However, if the following criteria are met, they are likely to be upheld by the court:

• Both parties received independent legal advice.
• Full and frank financial disclosure of both parties’ assets was made.
• Neither party was under pressure to sign the agreement against their will.
• There has been no significant change that would make the agreement inappropriate (for example, the birth of children)
• The agreement should be prepared and signed in good time before the wedding/civil partnership.
• The agreement is fair and realistic.

Whilst a prenup may not be the first thing on a couple’s mind as they plan their wedding, a well-prepared agreement by a family lawyer can secure both parties’ position for the future and avoids uncertainty. Having one in place can also help to avoid protracted and costly litigation should they choose to divorce. The risk of giving up assets that you feel are rightfully yours can be mitigated with the right legal advice in place.

If you would like to discuss your own individual situation, please contact our specialist legal team.

Amanda Phillips-Wylds is a Director, Solicitor and Mediator and heads up our Ascot office.