With rising divorce rates in the British Asian community, questions around gold jewellery, often gifted or inherited, are becoming increasingly common. Family lawyer Sonal Parekh, Associate Solicitor in the Family Law team at SA Law, regularly advises clients on how such assets are treated in UK courts, from financial disclosure to disputes over ownership or demands for return by in-laws. Here’s her exclusive interview with Asian Voice.
How do UK courts typically treat gold jewellery, especially culturally significant gifts, in financial settlements during a divorce?
The Courts in England and Wales typically treat gifts, whether gold, jewellery or other significantly valued items as part of the entire matrimonial pot. Once a gift has been given, it is deemed as belonging to and in possession of the receiver. But depending on the value of the gift, it is an asset available to the parties to use in the future to meet their needs.
There has been a recent case where the Court ruled that where there was no clear intention on the part of the person providing the item as to whether or not it was a gift, then it could be concluded that the item belonged to the family providing it. However, such outcomes are rare. The key is being able to show the clear intention behind the giving of a gift, and usually this is where most parties struggle.
The giving of gold when couples are marrying is a happy occasion, the intention behind it is to pass family heirlooms down through generations, help the couple with financial investments for their futures and simply because the families want to give gifts of gold to their daughters-in-law or sons-in-law to celebrate the happy occasion. There are usually no strings attached, and intention is the last thing any family would consider.
What happens if one spouse denies the existence or possession of gold jewellery during divorce proceedings? Are there legal remedies for this situation?
The issue in relation to its existence is the easier hurdle to overcome in today’s age of advances in technology, social media, along with wedding photographs and videos. It would be difficult for either party to deny the very existence of the gold jewellery.
The situation we are seeing more and more of is cases where there is a “he has it, she has it” dialogue. One side will argue that the gold and jewellery are in the possession of the other party, and vice versa. In situations like these, the outcome will depend on the evidence, but the starting point is that the recipient will be treated as having the jewellery for financial settlement, with the onus upon them to prove they do not have the jewellery.
The legal remedies where the parties are in court proceedings are:
- If one party can convince the Judge that his or her jewellery has been retained by the other party, the Court can order the jewellery to be returned.
- Alternatively, a lump sum payment can be ordered to be made by the party who has the jewellery.
- Usually, the gold jewellery is viewed alongside other assets of the marriage and not in isolation. Its value is likely to be factored into the overall division of matrimonial assets and can be offset against other assets.
In cases where the ex-spouse's family gifted gold jewellery, can they legally demand its return after a divorce?
The short answer to this is no for ex-spouses. The advice on a divorce is for parties to settle their financial claims against each other, preferably before the divorce is finalised and the parties are legally divorced. This protects both parties against future claims being made by the other party. Financial claims, if agreed, are settled in what is called a Consent Order. This document is drafted by solicitors and includes all the terms of the agreement between the parties. If it is a clean break, it is in full and final settlement of all future claims ex-spouses can make against the other. Divorce itself, unless there is also a final financial order, does not prevent claims being made.
The Consent Order will need to be sent to the Court in order for the Court to approve it and seal it, this then makes the agreements contained in the Order legally binding on both parties.
However, whilst ex-spouses are prevented from making future claims against the other after the Consent Order is sealed by the Court, this does not exclude extended family from making a claim. This would be a civil claim through the Civil Courts. In situations where this might arise, party X would ideally want an indemnity from party Y that if Y’s family made a claim against X for the jewellery, X would be indemnified to the extent of the claim by Y.
Are there any steps you recommend British Asian families take—either before or during marriage—to protect or document gold jewellery in case of a future dispute?
The best advice would be:
- Keep receipts: evidence of purchased gold and jewellery is really important, so keep your receipts.
- Photos: Along with the receipts, it is a good idea to keep photographs of individual items with a short description. This way, when you are listing the jewellery in your financial disclosure, you can be more specific than just “gold necklace”. The more detail, the better. Does it have precious stones? What are the carats? What is the length of a chain? On what date was a certain piece of jewellery given? In the Asian culture, jewellery is given from the engagement right through to the wedding day and sometimes even purchased for daughters-in-law or sons-in-law on festive days such as Diwali or Eid.
- Pre or Post-Nuptial Agreements: consider entering into a pre-nuptial agreement or a post-nuptial agreement which also deals with the issue of the gold and jewellery specifically and how this is to be divided on divorce and settles issues in relation to the ownership of the jewellery.
- Early expert advice: It is essential to get legal advice early. It is not unusual for jewellery to be handed down through generations and therefore has significant sentimental value. However, sentimental value must be weighed up against mounting legal costs fighting for an item which is not worth a significant amount in monetary value. Where no agreements can be reached, an application for financial remedies will likely need to be made to the Court. At this point, legal costs escalate quickly, so a cost-benefit analysis is important early on.
