How Are Overseas Assets Treated in a Divorce?
Even if an asset is located abroad, it’s still usually considered part of the overall marital property. You and your spouse may agree not to share or sell it, but there’s no automatic exclusion of overseas assets in a divorce.
Understanding the Complexities of International Assets During Divorce
The breakdown of a relationship often leads to challenging questions about asset division. When relationships cross borders, overseas jurisdictions can further complicate matters. If your separation has an international dimension, it’s vital to understand how assets held overseas are treated in a divorce.
In high-net-worth divorce cases, overseas assets frequently include valuable properties, businesses, and investments. The way you approach these assets can significantly impact your final settlement. Seeking reliable legal guidance could be the difference between receiving your fair share and losing out.
Divorce & Overseas Assets
In complex divorce cases, overseas assets are often similar to those in domestic separations. These typically arise from spouses spending extended periods abroad, necessitating:
- Opening foreign bank accounts
- Purchasing homes
- Buying vehicles
- Acquiring shares and investments
- Establishing business interests
Foreign property is often a major factor in high-net-worth divorces. Common offshore assets include:
- Holiday or second homes
- Investment portfolios
- Overseas trusts
- Businesses
If dividing foreign property becomes a sticking point in your separation, having all relevant paperwork is crucial. This documentation gives you the best chance of obtaining an accurate valuation before settlement. For those struggling to locate necessary documents, experienced legal firms can provide financial experts to clarify the situation.
Common Challenges with Divorce & Foreign Assets
Negotiating divorce and overseas assets is rarely straightforward. Certain situations can significantly disrupt the process and make it difficult to establish matrimonial items and trace asset ownership:
1. Spouse Hiding Offshore Assets
One party attempting to hide assets can greatly impact how overseas assets are treated in a divorce. If you suspect your spouse is concealing wealth, seek legal advice immediately. A holistic law firm can appoint a forensic accountant to uncover the true financial state of affairs, providing 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 foreign assets in divorce, they could face fines or even imprisonment. At minimum, they would likely receive a less favourable settlement to reflect their dishonesty.
2. International Jurisdiction
International jurisdiction significantly influences how divorce and foreign assets are handled. While courts’ decisions about asset division inform the final settlement, each country has unique laws, making order enforcement complex.
UK courts must consider foreign laws regarding asset division and their implications, along with any prior agreements between spouses. It’s important to note that English law has no set formula for dividing assets; instead, the guiding principle is the best interests of all parties.
If your separation prompts questions about how overseas assets are treated in divorce, jurisdiction can be pivotal. With numerous variables and high-value assets at stake, obtaining reliable legal guidance is essential.
How Are Overseas Assets Treated in a UK Divorce?
If you’re divorcing in England or Wales, overseas assets such as property, money, or investments are treated like any other assets for financial settlement purposes. Both parties must disclose all property they own, including those held overseas.
Enforcing the Final Order
Once overseas property, investments, businesses, and other assets have been identified in the court’s financial order, ensure the order is drafted to be enforceable overseas.
Enforcing a financial order for assets held abroad can be challenging. However, the UK has arrangements with many jurisdictions to recognise and enforce UK court orders. Some solicitors work with lawyers in the jurisdictions where assets are located to help ensure the financial order is upheld.
Protecting Assets — Including Foreign Property — in Divorce
In high-net-worth divorces, overseas assets are often a central feature. If you anticipate separation, it’s important not to delay or leave anything to chance. There are ways to make the eventual parting less contentious:
1. Collect Important Documents
Not all parties provide full and frank disclosure of their assets. Some may delay by insisting historical paperwork is unavailable. This is significant because longer asset valuation processes typically increase case costs.
To reduce time and expense, gather all relevant documentation within your control as soon as possible and provide it to your lawyer. Be aware of specific rules around obtaining documentation that doesn’t belong to you. This is a complex area, so legal advice is highly recommended.
2. Consider Nuptial Agreements
To safeguard valuable assets like foreign property in divorce, a nuptial agreement can be a compelling option. While not fully binding under UK law, they’re often upheld, offering clarity on how a couple intends to divide their possessions.
In cross-border relationships, the agreement’s terms are often mirrored in the foreign country, carrying similar weight. However, varying legal principles between countries can sometimes make translating the agreement difficult.
A potential solution is to ‘root’ the nuptial agreement in your primary country of residence and revisit it if you move overseas. This means your agreement will align with and be governed by your home country’s laws. Seek legal guidance, as certain countries may prove more favourable than others. International divorce lawyers understand the nuances of individual jurisdictions, helping protect your best interests.
Expert Guidance for Divorce & Overseas Assets
Answering the question, “How are any assets held overseas treated in a divorce?” yields different answers for every couple. No two separations are alike, making bespoke legal advice essential for high-net-worth relationships. If you’re considering your options, work with a firm specialising in all facets of international divorce.
At RLK Solicitors, we are authorities in all areas of family & divorce law. Our expertise covers:
- Child arrangements
- Finances after separation
- Pre and post-nuptial agreements
- Civil partnership dissolution
We take the time to understand your goals before devising a tailored strategy. Throughout the process, we offer transparency and innovation to address challenges and fulfil your key objectives.
Don’t navigate the complexities of international divorce alone. Contact RLK Solicitors today to speak with a member of our specialist team and ensure your overseas assets are properly considered in your divorce proceedings.
Harpreet specialises in cases involving children both under the umbrella of court proceedings as well as on a conciliatory basis. Harpreet has experience in other aspects of family law namely divorce, separation and financial remedy.
Harpreet is a law graduate from the University of Birmingham. She began her legal career with DFLP (now Lodders) and then moved to Mercy Messenger where she qualified as a Legal Executive in 2014. Harpreet joined RLK Solicitors in October 2023, having previously worked in a Legal 500 ranked specialist family law firm.