How Are Foreign Assets Divided in Divorce?
In today’s global economy, cross-border marriages are common – as is owning property in another country. However, when such marriages end, overseas property can add an element of complexity to financial settlement and legal proceedings.
Here at IMD, our solicitors are experts in divorce with an international element. We can advise you fully on how best to protect your financial position and how to proceed. In this article, we look at how assets held overseas are divided in divorce when divorcing in England or Wales, to help you understand what might come next.
How do the courts consider foreign assets?
If you are getting divorced in England or Wales, assets such as property, money or investments overseas are treated like any other assets for the purposes of financial settlement. Both parties have an obligation to disclose all property they own, including that which is held overseas. The only exception is where certain assets were owned prior to the marriage, and they may be excluded from the financial settlement.
However, there are several difficulties with overseas assets that can make the process more difficult, including the time and cost involved, whether the property can be traced, and whether the assets held abroad are matrimonial property.
Accounting issues and documentation for foreign assets
If one spouse is not forthcoming about assets held overseas, or the right paperwork or documentation cannot be found, financial settlement cases can go on for a long time. A case that lasts a long time can, of course, be more expensive, so both parties must take steps to ingather all documents pertaining to assets they hold. Having all the necessary documentation can make the process much more straightforward. Also, it can avoid accusations of hiding assets abroad.
Hiding assets overseas
When one party attempts to hide assets that they hold overseas, this can make financial settlement significantly more complicated. If you suspect your spouse has assets overseas that they have not disclosed, our solicitors can help you to ensure all property is accounted for. We can utilise the skills of a forensic accountant to find any signs of hidden assets and take action to compel your spouse to disclose hidden assets.
If you are successful and hidden overseas assets are located, your spouse may receive a lesser settlement as a result of their attempt to hide property. The property may form part of a financial order from the court. However, it may not be possible to retrieve the property as some overseas courts may not recognise the financial order or even an enforcement order.
Enforcement of the court’s financial order
After property, investments, businesses, possessions or other assets held overseas have been identified as part of the court’s financial order, you still need to enforce the order. Enforcing a financial order in relation to assets held overseas can be challenging. However, the UK has arrangements with many jurisdictions to recognise and enforce orders made by the UK courts. Our solicitors can work with lawyers in the relevant jurisdictions where the property is located to ensure that your financial order is upheld.
What is matrimonial property?
When assets are divided in divorce, spouses can make a claim to what is known as ‘matrimonial property’. Matrimonial property is any money acquired during the marriage and any assets enjoyed as part of the marriage. Matrimonial property may include things such as the family home. However, any assets held overseas that one spouse acquired before the marriage will generally not be considered matrimonial property.
International couples should always seek the advice of a divorce solicitor with experience and understanding of financial settlement where assets are held overseas. Our solicitors can fully advise you before you even begin divorce proceedings as to whether the court will have the power to enforce the financial order in relation to overseas property, depending on the country where the property is held. Furthermore, certain jurisdictions may not recognise any prenuptial agreements if they were drafted in a different country.
There are many matters which make divorce with international property complex, but we strive to make things as straightforward as possible for you.
Contact Our UK International Family Law Solicitors
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.
Published by: Iwona Durlak
IMD Solicitors LLP