The breakdown of a relationship will often lead to difficult questions about the division of assets. In relationships that cross borders, factors like overseas jurisdictions could muddy the picture even further. Therefore, if there’s an international dimension to your separation, it’s vital to ask, ‘how are any assets held overseas treated in a divorce?’
During high net worth divorce cases, overseas assets often include valuables such as properties, businesses, and investments. With so much on the line, the way you choose to act could have major repercussions for the eventual settlement. Seeking reliable legal guidance might even make the difference between getting your fair share and losing out.
Divorce & Overseas Assets: What is at Stake?
In cases of more complex divorce, overseas assets tend to be similar to those that crop up in domestic separations. These relationships often involve spouses spending long periods of time abroad, during which many will need to open a foreign bank account, buy a home, purchase a vehicle, etc. However, they might also make additional acquisitions, such as shares, investments, and business interests which will need to be considered.
The future of foreign property in divorce is often a major factor in high net worth relationships. Common offshore assets usually include:
- Holiday/Second Homes
- Investment Portfolios
- Overseas Trusts
- Businesses
If dividing a foreign property in divorce is a sticking point in your separation, it’s useful to have all of the relevant paperwork that belongs to you. This will give you the best possible chance of getting an accurate valuation ahead of an eventual settlement. For anyone struggling to locate documentation, experienced legal firms can offer the services of financial experts to clarify the reality of the situation.
Common Challenges with Divorce & Foreign Assets
Negotiating divorce and overseas assets is rarely plain sailing. However, there are some situations in which the speed of the process can be significantly disrupted. The following scenarios might make it difficult to establish matrimonial items and trace ownership of assets such as a foreign property in divorce:
Spouse is Hiding Offshore Assets
The question of ‘how are any assets held overseas treated in a divorce?’ can be greatly impacted by one party trying to hide assets. If you suspect that your spouse is concealing their wealth in any way, you should seek legal advice as soon as possible. A holistic law firm can appoint a forensic accountant to uncover the true financial state of affairs, offering genuine transparency when you need it most.
Courts in England and Wales take full and frank financial disclosure extremely seriously. If your spouse is found to have concealed any foreign assets in divorce, they could face fines or even imprisonment. The minimal expectation would be a less favourable settlement to reflect this dishonesty.
International Jurisdiction
International jurisdiction can have a significant bearing on how divorce and foreign assets are handled. When the courts reach a decision about division of assets, this will inform the final settlement. However, countries have their own unique laws, so enforcing an order can quickly become complicated.
UK courts will need to take into account foreign laws over division of assets, and the implications therein. Along the way, they will also consider any prior agreements between spouses. It’s important to note that there is no set formula for dividing assets in English law, with the best interests of all parties being the guiding principle.
If your separation prompts you to ask ‘how are any assets held overseas treated in a divorce?’ jurisdiction can be pivotal to the answer. With so many variables at play, and the ownership of high value assets at stake, obtaining reliable legal guidance is vital.
How Are Any Assets Held Overseas Treated in a Divorce?
If you are getting divorced in England or Wales, assets such as property, money, or investments located overseas are treated like any other assets for the purposes of financial settlement. Both parties have an obligation to disclose all of the property they own, including those held overseas.
How is the Final Order Enforced?
Once property, investments, businesses, and any other assets held overseas have been identified as part of the court’s financial order, you need to still ensure that the order has been drafted in such a way that it can still be enforced overseas.
Enforcing a financial order in relation to assets held abroad can be challenging. However, the UK has arrangements with many jurisdictions to recognise and enforce orders made by the UK courts. Some solicitors will even work with lawyers based in the jurisdictions where the assets are located, which might ensure that the financial order is upheld.
Ways to Protect Assets — Including Foreign Property — in Divorce
When it comes to high net worth divorce, overseas assets are often one of the main features. If you think that separation is on the horizon, it’s important not to delay or leave anything to chance. Fortunately, there are ways to make an eventual parting of ways much less contentious.
Collect Important Documents
As touched upon earlier, not all parties will choose to provide full and frank disclosure of their assets. In other cases, one party may delay the process by dragging their heels or insisting that historical paperwork cannot be retrieved. This is important because, in general terms, the longer it takes to establish asset valuations, the costlier your case becomes.
Therefore, to reduce time and expense, it makes sense to gather all relevant documentation that is within your control as soon as you can and give it to your lawyer. Please be aware however, that there are specific rules around obtaining documentation that does not belong to you. This is a tricky area, so legal advice is highly recommended if you find yourself in this position.
Consider Nuptial Agreements
If you want to safeguard valuable assets such as a foreign property in divorce, a nuptial agreement could be a compelling option. While not fully binding under UK law, they are often upheld, offering much more clarity about how a couple intends to divide their possessions.
So how does this work in relationships that cross borders? In many cases, the terms of the agreement are mirrored in the foreign country, meaning they carry similar weight. However, because legal principles vary from one country to another, it might sometimes be difficult to translate the agreement.
The solution to this could be to ‘root’ the nuptial agreement in your primary country of residence and revisit it if you move overseas. This effectively means that your agreement will be made in line with — and also governed by — the laws of the country you call home. You should seek legal guidance in any case, as certain countries could prove to be more favourable than others. International divorce lawyers understand the nuances of individual jurisdictions, which can help to protect your best interests.
Divorce & Overseas Assets Are Made Easier With Lowry Legal
Answering the question, ‘How are any assets held overseas treated in a divorce?’ results in a different answer for every couple. Ultimately, no two separations are ever the same, making bespoke legal advice essential for high net worth relationships. If you’re considering your options, you need to work with a firm that specialises in all facets of international divorce.
Lowry Legal is an authority in all areas of family law. Our legal expertise includes child arrangements, finances after separation, pre and post nuptial agreements, and civil partnership dissolution. A holistic firm, we have an in-house mediator for complex scenarios, and can utilise the skills of tax experts, forensic accountants, and more when required.
We’ll take the time to understand your goals before devising a strategy tailored to you. Throughout, we’ll offer transparency and innovation to address any challenges and fulfil your key objectives.
To speak to a member of our specialist team, get in touch today.
