Some couples may have relatively few pieces of jewelry, preferring to spend the money on other items instead. Others may have accumulated a small fortune in jewelry over the years, and these collections can be worth millions of dollars in some cases. So, how exactly do you deal with jewelry during a divorce? In some respects, this process is handled in exactly the same way as any other aspect of the property division process. In other ways, however, there are unique factors to consider when approaching this situation.
The Potential for Concealed Jewelry
Firstly, it is important to understand the potential for concealed assets when it comes to jewelry. Unlike houses or cash, jewelry is relatively easy to hide. A spouse may be able to conceal the jewelry and claim that it never actually existed in the first place. With no records to prove otherwise, the other spouse may have difficulty gaining access to this property.
The Wedding Ring
One of the most complex processes involves the engagement ring. Different states have different rules when it comes to this piece of property. Some view it as a “conditional gift,” and it only becomes separate property if the couple actually becomes married. According to the conditional gift rule, if one spouse gives an engagement ring to another, he could potentially recover that gift if the bride backs out of the marriage. However, it depends on who broke off the engagement, or whether one partner engaged in marital misconduct (such as infidelity) prior to the marriage.
Once the marriage contract has been signed, however, many states tend to view the wedding ring as a gift. This means that it is separate property, and it typically belongs to the bride after that point.
On the other hand, some courts may require the bride to return the engagement ring if it is considered an inherited family heirloom. For example, a husband might have given the bride his grandmother’s ring, and the court might rule that this ring should remain in possession of the husband’s family.
Jewelry is Usually Given in the Form of a Gift
Generally speaking, most jewelry is exchanged during the marriage in the form of a gift. And although property acquired during a marriage is typically defined as “marital property,” there is always an exception when it comes to gifts. If one spouse gave another spouse jewelry during the marriage, it never becomes marital property. Instead, the spouse that received the jewelry gets to keep it after the marriage.
If the spouses acquired jewelry without distributing these items as gifts, it may be considered marital property. This means that the property will be distributed between the spouses in a manner depending on the state.
Selling the Jewelry
Whether spouses keep hold of their jewelry or divide it amongst each other, selling this property is usually a smart move. Jewelry can fetch quite a hefty price, and these funds could be crucial for spouses as they begin their new lives. And of course, many spouses will not have a choice if they have been ordered to liquidate these assets by the family court.