It is a truth universally acknowledged that a soon-to-be-single woman in possession of designer bags must be in want of them after her divorce.
Personal possessions ('chattels' in legal parlance) often come as something of an afterthought where there are other more obvious 'assets' in dispute, such as houses or pensions. For a lot of people there is no real need to fight over chattels, as their most valuable ones will be their cars and furniture, which are in regular use by one party or the other.
Yet it is a mistake to treat chattels as inconsequential, even where they are obviously the possessions of one party. If a husband has hitherto shown no interest in replacing his briefcase with a Balenciaga bag, it can be a surprise when he suddenly wants his wife's collection valued in the financial disclosure.
Of course, when couples go after each other's prized possessions in a fraught dispute, there can be an element of spite. A treasured Hermès may not be as valuable as the couple's FTSE 100 portfolio, but it certainly makes for a far more emotive target.
Importantly, however, the husband may have taken enough interest in the designer bag collection to realise that certain high-end chattels function much more like assets than one might initially think. The launch of Bonhams' Designer Handbag and Fashion Department, devoted to valuing, buying and auctioning the crème de la crème of high-end fashion, highlights this emerging trend: some handbags are, in essence, works of art, and consequently appreciate in value.
In fact, that Hermès bag might be out-performing the FTSE 100 portfolio. Knight Frank's Luxury Investment Index classed Hermès handbags as the top performing asset class in 2019, and the streak continued in 2020, recording 13% growth in value. This index also highlights the sort of chattels which parties should look out for in a divorce, especially if they have not been very interested in their partners' collections before. Coins, stamps, and whiskey sit alongside the more obviously valuable jewellery, art and cars as chattels with significant market value.
Even niche objects and collections can be worth considering, and at Howard Kennedy we see a huge range of valuable possessions in financial disclosure including:
- Fur coats;
- Personalised number plates;
- Collectable lightbulbs;
- Vintage vehicles;
- Military paraphernalia;
- Exotic pets;
In the past judges have been critical where valuable chattels are not given proper consideration as part of the financial settlement. In the case of K v K (Financial relief: Management of Difficult Cases) the parties had made no attempt to divide £300,000 of antiques prior to the final hearing. The judge said that division of chattels should be addressed prior to final hearing 'as a matter of practice' and any item that could not be agreed should be set out in a schedule with short form reasons why each party wished to keep it.
For parties with chattels which are used on a day-to-day basis, it is usually appropriate that these are retained by the party who has possession. A bag may be designer, but if it is the bag you bring on the school run, that you stuff your cardigan into on chilly mornings, and the lining looks a bit worse for wear from late nights rummaging for your keys, any argument for treating it as an asset is going to be weaker. The bag kept in mint condition as a collector's item, one which would draw the interest of Bonhams' new fashion department, could well rank with the real estate and bank accounts in the assets up for division.
Although wives might be left wondering at what event their ex-husband is planning to debut his new python-skinned Lady Dior, it is likely to be more sensible to credit the value of the bags to the wife's asset pool in the division, rather than deliver up half a collection.
He would never have pulled it off anyway.