LEGAL LE NS
March 2021
W H AT ’ S M I N E I S Y O U R S,
OR IS IT…? It’s clear that advising clients who are going through a divorce can be a challenge which needs to be treated sensitively. Grappling with expensive gifts between couples can make the process even more complicated. Sarah Hutchinson, Family Partner at Farrer & Co LLP considers how advisers can ensure the most favourable financial outcome for their clients should they divorce by factoring high-value gifts into the assets equation.
Y
ou can have the Bentley on weekends! You might be surprised to hear that sales of specialist sports cars in the UK rose by 7% in 2020, a year which has no doubt been difficult for most people. Perhaps for those able to afford such luxury items, it has been a time to treat others - or oneself - to an expensive gift. In support of this theory, The New York Times reported in December that despite the pandemic, fine jewellery sales for some retailers had doubled when compared to the previous year. Perhaps the inability to lift spirits with a holiday led to such an increase, or maybe fine jewellery was seen as an alternative investment opportunity in these challenging times. Regardless of the reasons, 2020 was a year where those financially able to do so spent their money on expensive chattels; items which may also have huge sentimental value.
I FAmagazine.com
Where a gift is made between spouses, it is important that advisers have an understanding of how a client’s item would be treated during any later divorce. The issue of who retains them can become extremely contentious and therefore it is important to bear in mind how the courts will approach the issue, so that clients may be protected from the outset. THE DIVISION OF ASSETS ON DIVORCE The court can redistribute assets owned by either spouse in whatever manner it sees fit in order to achieve a fair result. This includes gifts made by one spouse to the other, or gifts made from anyone else to either or both spouses. Both parties are required to provide an accurate and detailed summary of their assets, which would include any personal belongings with a resale value of more than £500. In the case
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