Jewelry is a peculiar asset: it’s value has to be estimated and it can often “disappear”. Most all, it is usually a gift.
In Illinois, the first step is determining whether the jewelry is marital property or not. Section 750 ILCS 5/503(a) of the Illinois Marriage and Dissolution of Marriage Act defines marital property as “all property, including debts and other obligations, acquired by either spouse subsequent to the marriage, except…”
So, the date of purchase or receipt of the jewelry determines whether the divorce court even has jurisdiction to award the jewelry to either spouse. If the jewelry was received before the marriage, then it is NOT marital property and belongs to whichever spouse purchased or received it.
This, of course, brings up the special case of the engagement ring. An engagement ring is given, by definition, before the marriage and, yet, is intrinsic to the marriage.
If the engagement is broken off before the wedding the rule is “that the donor of the ring is entitled to its return where the engagement is mutually broken. The rationale for this rule is that an engagement ring is a gift conditional on the subsequent marriage of the parties, and when the condition is not fulfilled, the donee no longer has any right to the ring.” Vann vs. Vehres, 633 N.E.2d 102 (1994).
So, if the engagement is called off before marriage then the ring goes back to the ring giver.
But what happens to an engagement ring after marriage?
Section 750 ILCS 5/503(a) of the Illinois Marriage and Dissolution of Marriage Act defines non-marital property as “(1) property acquired by gift, legacy or descent or property acquired in exchange for such property”
The section has been interpreted to permit both interspousal gifts as well as gifts from third parties. In re Marriage of Severns (1981), 93 Ill. App.3d 122, 416 N.E.2d 1235.
A spouse claiming property as a gift must “show not only delivery, but also that the delivery was made `with the intention of vesting the title absolutely and irrevocably in the donee.'” (In re Marriage of Simmons (1980), 87 Ill. App.3d 651, 654, 409 N.E.2d 321.) Where the subject matter of an interspousal transfer is property acquired prior to the marriage, the common law presumption of a gift controls, which the “donor” spouse may rebut with clear and convincing evidence. (In re Marriage of Severns (1981), 93 Ill. App.3d 122, 416 N.E.2d 1235.)
So, in the case of an engagement ring. It was non-marital property of the ring giver because the ring giver acquired the ring before the marriage but after the ring was given and the ring receiver accepts with the condition (“I do”), then the ring becomes the non-marital property of the ring receiver. This can only be undone by a showing by the ring-giver that he really didn’t mean to give it. Good luck with that.
What about subsequent jewelry gifts? Like an anniversary present?
The standard is then much different. Where the property is acquired during the marriage, however, the Act’s presumption in favor of recognition as marital property is controlling, which the “donee” spouse must rebut with clear and convincing evidence. In re Marriage of Rogers (1981), 85 Ill.2d 217, 422 N.E.2d 635.
So, in the case of an anniversary gift where the giver uses marital money to purchase jewelry for the gift receiver, it is NOT the gift giver that must prove it was a gift to the marriage and not to the spouse. It is the gift receiver that must prove that the gift was for them alone and not for the marriage.
For example, if John gave Shirley a custom made broach, Shirley could probably say, “This gift was clearly for me and me alone therefore it is my non-marital property.” But if John gave Shirley a bunch of loose diamonds it would be difficult for Shirley to say “This isn’t just another asset that the marriage holds.” In my experience, this matter is usually resolved by the card that came with the gift. A card that says, “To my darling wife. Happy Anniversary,” clearly implies the gift was just for her.
Often, jewelry is a family heirloom. For example, “my grandmother’s ring.” These will almost always be declared non-marital property of the party whose family it came from.
Sometimes new jewelry is given by the families to the parties. Here in Chicago, many cultures encourage this practice. This is especially common in weddings of the cultures of Pakistan, India and Bangladesh. In this circumstance, the wife will say “the jewelry was obviously a gift to me” while the husband will say, “My family gave it as a gift to me and to the marriage at the very least.” This will depend on the testimony of the giving party (who always sides with their relatives).
When jewelry is determined to be marital and is awarded by the court, the jewelry is distributed based on the value. So, a wife may be awarded one $ 1000 ring while the husband is awarded two $ 500 earrings. But, the court is more likely to simply order the jewelry sold and that all proceeds be divided 50/50 in cash. Because of this, couples are more likely to simply negotiate the distribution of jewelry.
Finally, jewelry often goes missing during a divorce so it is important to accurately document the possession of all jewelry. This is best done by having the jewelry formally appraised so that a third party, the jeweler, has a record of the marriage’s jewelry.
Perhaps the most famous divorce jewelry case was when Johnny Carson divorced his third wife. Throughout the marriage whenever Johnny would screw up (cheat on his wife) she would demand jewelry. Instead of accumulating the jewelry Johnny’s wife would return the jewelry to the jeweler who gave her a refund. Under Illinois law, this would have been very interesting. The jewelry probably would have been the non-marital property of the wife but would the refund money remain non-marital property? I don’t know. Johnny and his wife ended up settling the case so we’ll never know.
If you are getting a divorce and have significant jewelry assets, contact my Chicago, Illinois office to learn more about what will happen to that jewelry in your pending divorce.