Gifts from grandparents in property settlement

Who keeps the engagement ring?

Who Keeps the Engagement Ring in a Separation or Divorce?

We all want to believe in true love and seal the deal with a very attractive (and often expensive) engagement ring! Therefore you may wonder who keeps the engagement ring in the event of a separation.

One of the more prominent engagement rings in recent years was the 35 carat huge ‘sparkler’ worth around $13 million that James Packer gave to Mariah Carey, which reportedly later formed part of their financial settlement.

We’re not all in James Packer’s league, but there are different situations regarding how the law operates with respect to engagement rings.

Engaged Couples who do not live together

This situation is best demonstrated by the case of Papathanasopoulos v Vacopoulos (2007) NSWSC 502. In this case, the parties exchanged engagement rings at their engagement party. However, within 10 days of this event, Ms Vacopoulos broke off the engagement. When she offered the ring back to her fiancé, he told her it was a gift and to keep it, Instead, Ms Vacopoulos decided to ditch the $15,000 ring into the rubbish bin, along with everything else symbolic of their relationship!

The Ring’s Legal Status: A Conditional Gift or a Contract?

When the case reached the NSW Supreme Court, Justice Smart drew similarities between a promise of marriage and a commercial bargain. The giving of an engagement ring and the acceptance of such a rings constitutes consideration for the fulfillment of a contract, which in other words, is the marriage. Under these circumstances, Ms Vacopoulos was the holder of a conditional gift, being the engagement ring, which would ultimately become her property once the marriage was fulfilled. However, where Ms Vacopoulos refuses to marry, the gift revokes, and the ring must be returned to her former fiancé.

De Facto and Married Couples: How Is the Ring Treated in Property Settlement?

As for de facto and married couples, the facts of each case will determine how the engagement ring will be treated in property settlement proceedings. The engagement ring is considered with all other assets in the pool taking into account the ‘four step’ process including:

  1. the value of the net asset pool;
  2. financial and non-financial contributions during the relationship;
  3. future needs of each party; and
  4. what a court would consider is just and equitable.

Therefore the ring forms part of the asset pool for distribution, and the value attributed to the ring will be the current value and not the purchase price. This is consistent with the valuations of other personal property in the matrimonial asset pool. In some cases, particularly long marriages, due to sentimental value the parties may decide to not include the engagement ring in the asset pool.

In the case of Damiani v Damiani (2012) FAMCA 535, the parties were married for a period of only 19 months. The engagement ring was valued at $15,000 and  the parties agreed that the wife would return the ring to the husband and upon its return, would form part of his share of the asset pool. However, there is no default position regarding whether or not the engagement ring is to be included in the asset pool.

Navigating Your Personal Situation: We’re Here to Help

Legal disputes over engagement rings can be complex and emotionally charged. To discuss your own personal situation, contact John Lewis at Stanley and Co Lawyers on 08 7001 6135 to make a free 30 minute appointment.

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