One of the most dramatic, and somewhat luxurious, divorces of the past decade has finally been brought to a close.
On May 16 2022, the final tranche of Harry and Linda Macklowe’s art collection was auctioned off at Sotheby’s, raking in $246.1mn (£194.7mn), which, in addition to the works sold for $676mn at auction in November last year, reaches a total of $922mn.
The Macklowe’s novel-worthy divorce has been an ongoing saga since 2018 as they fought over their many assets, including jewellery, cars and their yacht.
However, their substantial art collection, collected over the more than half a century long marriage, was a point of real contention, resulting in it being brought to auction.
However, this is not as unusual as it may appear.
It is not just art collections, but high-end accessories that are becoming some of the most fought-over assets when a wealthy couple divorces.
The battle over these hotly contested items has even been given its own name: the media-friendly ‘handbag divorces’, so-termed because of the role designer handbags play in many divorce proceedings.
Unfortunately, it is fairly standard for divorcing couples to disagree over high-value assets such as the family home, pension plans and savings.
However, with the value of designer goods increasing substantially – yet another lasting impact of the pandemic – they are now also becoming a key feature of a settlement.
Valuation
In obtaining a financial settlement in a divorce, part of the process is to fully disclose all the assets and debts of the marriage. This means you must declare all belongings that value at £500 or more. Plenty of designer handbags, watches and shoes fall easily into this bracket.
The Macklowe divorce is a key example of where a couple may have a collection of items or a single item worth tens or hundreds of thousands of pounds.
If the value of this collection is disputed between the couple, professional valuations may well be needed to evaluate the worth. The Macklowes fought bitterly over the value of their art collection, resulting in it all being put up for auction.
Sentimentality can play a very important role in a divorce, although you certainly would not think it in some of the more acrimonious divorces. Much of this can surface when an item was gifted, for example for a milestone in the marriage, like an anniversary or a special birthday.
However, the law regarding gifts given between spouses during the marriage is black and white. Gifts count as matrimonial property and are therefore added to the joint pot.
In these cases, people can easily lose sight of the whole picture. Assets like the family home and pensions fall by the wayside as couples argue over the smaller things. In a family court, this can be challenging and take up a lot of court time.
Prenups
One of the ways these handbag divorces can be prevented is by signing a prenuptial agreement before the wedding. Although once the preserve of the super-wealthy, prenups are increasingly common and can be extremely useful in ensuring a more harmonious divorce, should the couple split up.
Prenups are not currently legally binding in England and Wales, but if they follow a set of criteria, they are likely to be upheld by the court. Both parties should have received independent legal advice, and there should be full disclosure of the parties’ assets. The agreement should be signed willingly, with no pressure on either side to sign, and it should be prepared and signed in good time before the wedding or civil partnership takes place.
Significant changes can make the agreement inappropriate, which can then invalidate it in divorce proceedings, for example if the couple has children.
While a prenup is not always at the forefront of a couple's mind as they plan their wedding, by having a family lawyer draw up a well-prepared agreement, the couple can have a more secure future and avoid the divorce becoming an (expensive and protracted) battle for designer goods.
The term ‘handbag divorce’ is likely to continue to rise in popularity, and, although the Macklowe art collection brought in $922mn, these kinds of divorces can exist on slightly smaller scales.
Having the right legal advice can mitigate the risk of the divorce becoming designer.
Amanda Phillips-Wylds is managing partner Thames Valley at Stowe Family Law
