Jewellery + Watch: valuation for divorce

A divorce is an extraordinary and difficult time. Jewellery or watches are often part of a settlement, and answering the question ‘how do I find out what my jewellery is worth?’ is sometimes misunderstood, potentially with unexpected consequences to either party.

In this guide we aim to take some of the stress out of a difficult time by demystifying what getting a valuation for divorce is and how we can help.

A valuation for divorce is also known as a valuation for division between parties or family division. It needs to be accurate, fair and reasoned in its content which is why it takes expertise and time to do it properly.

As a background, it’s worth appreciating that items can have multiple and differing values. At one end of the spectrum is a basis of valuation called New Replacement Value. This is the highest value you can give something – it’s the amount of money an insurance company have to pay you (perhaps less an excess) in order to allow you to go out and buy the same, or very similar, items again at a common price anywhere in the UK at full retail values and of course includes taxes such as VAT in the value.

Towards the other end of the spectrum, the basis of valuation called division between parties/ family division and is comparably less. In simple terms it’s a practical and achievable amount of money you would realise if you had to sell the items in a reasonable time frame, taking into account condition, market demand and more. This of course would exclude taxes (e.g VAT). As a rough but not binding guide, it’s not uncommon to expect division between parties to be between 10% and 30% of a new replacement value, i.e. If new replacement value for an item is £1000, then division between parties/ family division value could be between £100 and £300, though there are of course exceptions to this rule of thumb.

As such it’s essential that each party in a divorce understands the basis of valuation. If one party is assuming New Replacement Value, the other Division Between Parties then a disparity occurs and can cause friction, or worse still, can disadvantage either party without them realising. In some circumstances a court may instruct both market values (further fees are due for multiple values as more research is required).

Ideally, a Court should formally instruct us to carry out a report on a basis of valuation for Division between Parties, and/ or other agreed basis. This way we are responsible to the court for the quality of work, the instruction and there is no argument as to what the basis of valuation is from either party.

Should this not be possible we require in writing from each party’s solicitor their agreement as to the items to be valued, confirming the basis for valuation and agreeing our fees (click here). Fees are typically paid equally by each party and are due on completion of the work, before a report is issued.

By following the above steps, you can help us produce a detailed and practical formal document that suits the purpose required, with the likelihood of the report being ‘queried’ or ‘invalidated’ by either party minimised. These steps do of course take time, often at a stage that parties may wish to ‘get going’ but are required to be fair to all before commissioning our report.

Our valuations adhere to the National Association of Jewellers' accredited Institute of Registered Valuers standards which are stringent in completion. 

For reference this paragraph is from the Institute of Registered Valuers notes that accompany this type of valuation: 

In the event of this valuation being for the purpose of formal division of assets, or family division of property, in a willing buyer/willing seller situation, unless otherwise stated, the values (or value bandings) expressed are based upon the estimated open market prices most likely to be paid by prospective buyers for the property at a hypothetical public auction sale in circumstances requiring disposal without specific time or geographical constraints. The values expressed reflect the condition the property is in at the date of appraisal and are based upon a range of hypothetical estimated auction prices between upper and lower limits and represent the likely hypothetical ‘hammer prices’. They do not take into account deductions of any commissions and/or charges payable unless the valuer has been specifically instructed/requested to do so by the client or their solicitor(s). In the event of this valuation being for the purpose of divorce settlement there are two values to be taken into consideration dependent on which party is instructing the valuer: (i) the net realisable asset: the researched likely open market hammer figure or mid auction estimate with the deduction of the seller’s commission and charges; (ii) the new retail replacement value, including VAT. If the instruction is for a Court Hearing the Court will require both these values.

As is evident, we are not lawyers and legal advice should be taken before embarking on a formal valuation in this scenario.