How Are Foreign Assets Divided in Divorce?
In today’s world, it is not uncommon for marriages to have an international element to them. As a result, when it comes to divorcing in these situations, it’s understandable to wonder how overseas assets will be ultimately divided. Depending on the circumstances, there can be some level of complexity in international financial settlements. Here, we explore how assets are divided and related issues.
Dividing foreign assets
In England and Wales, the division of foreign assets is administered just like any other UK based asset. The key difference is that procedures can take longer, and as a result, become more costly. For example, if overseas property needs to be traced or when determining whether or not assets should be considered ‘matrimonial’ or not. In every financial settlement, both parties are required to fully disclose all information on the assets they own in a financial affidavit. These assets will be valued and the starting point for an agreement typically begins with an equal division between the parties. Factors that will change an equal split include the accommodation requirements of the spouses, any children involved, how long a couple were married, and what the potential earnings of each spouse are.
Determining what matrimonial property is
Matrimonial property is money that has been acquired during the marriage and/or property which has been used or enjoyed by the family during the marriage. These can include pensions, foreign trust funds, the family home, a second home, savings and investments. Overseas assets that were purchased or acquired before the marriage are not usually classed as matrimonial property, although if a property was purchased before the marriage for the intended use of a spouse and their family, it could still be considered as a matrimonial asset, and therefore considered in a financial settlement.
Valuing foreign assets
Financial assets such as businesses, property and savings will need to be valued during a settlement. When it comes to savings, simply obtaining recent bank statements will suffice. For businesses, divorcing couples often appoint an independent accountant or finance professional they are both happy with, to provide a valuation. For houses, land and buildings, a valuer from the country of location will be required. Again, it is best for both parties to agree on who or which company to use to prevent any potential conflict.
Concealing foreign assets
Unfortunately, for some former couples there can be a level of distrust when it comes to full disclosure of financial assets abroad. This, of course, can make things challenging during divorce proceedings. If you suspect that your former spouse could be concealing assets, then it’s advisable to speak to your solicitor who, in some cases, can appoint a forensic accountant to ascertain the facts. If hidden assets are discovered this can result in your former spouse receiving less in a financial settlement. In cases like this, proceedings can end up taking much longer and lead ultimately to greater costs which is why it’s always advisable to be open and honest from the start.
How to enforce financial orders from UK courts
When a Court order has been made for a financial settlement, it will need to be correctly enforced, which can, in some cases, prove difficult when the asset is abroad. To ensure enforcement, your solicitor can work alongside the jurisdiction of the country where the order needs to be implemented. Fortunately, the UK has arrangements with jurisdictions across the world to also help enforce orders from its Courts.
Dividing foreign assets in an international divorce can become complicated. Like all other divorce proceedings, when both parties are willing to work towards an agreed outcome, matters are far less stressful and expensive.