The division of assets during a divorce is never simple, but when there are overseas assets to consider, it can become even more complex.
With varying international asset division laws to navigate, seeking legal advice is vital to help ensure fairness in the final divorce settlement.
In this article, we will discuss how overseas assets are divided in a divorce, and whether they are judged differently to domestic assets.
Types of overseas assets
There are many types of assets that will be divided in a divorce settlement, including properties, bank accounts and collectables, such as art or jewellery. Here is a handful of other assets that will be divided:
- Foreign business investments
- Pension funds
- Trust funds
- Stocks and shares
It’s also important to distinguish whether the assets owned by both parties are matrimonial or non-matrimonial.
Matrimonial and non-matrimonial assets
Matrimonial and non-matrimonial assets are divided differently during the divorce process. Here’s how they differ and how they’re separated:
- Matrimonial asset: An asset acquired during the marriage, for example, a family home or holiday home. These are likely to be split fairly between the two parties, even if only one of them paid directly towards it.
- Non-matrimonial asset: An asset acquired before or after the marriage. These are not usually shared in the divorce settlement, but may be shared if the matrimonial assets are not sufficient enough to meet reasonable needs.
How are overseas assets divided?
In a divorce settlement, assets that are held overseas will be treated in the same way as domestic assets. They will be considered and then divided fairly between the two parties.
This might sound straightforward, but there are steps that need to be taken to arrive at this point, lengthening the divorce process. Choosing a solicitor who offers a fixed fee divorce can help manage costs, ensuring transparency from the outset.
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Declaring overseas assets
As with all domestic assets, overseas assets must be fully declared on the Form E financial statement. This is an important legal document outlining your financial situation during a divorce. Failure to declare overseas assets can result in legal trouble, which we’ll discuss in further depth later in the article.
Matrimonial overseas assets, or assets acquired during the marriage, are much more likely to be shared equally in the divorce settlement. Assets acquired before the marriage are less likely to be shared, especially if they have been included in a prenuptial agreement.
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Liaising with foreign authorities
If neither party agrees on the valuation of overseas assets, authorities in the country in which the assets are based will be asked for assistance.
There is also the issue of navigating different foreign laws regarding asset division in a divorce case. In the UK, there is no set way in which assets are divided, with the decision being based around what the court sees as fair. This isn’t always the case abroad.
To make things less complex, the UK has agreements with many overseas jurisdictions to enforce court orders over assets held abroad.
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Considering prenuptial agreements
In many high-net-worth marriages, prenuptial agreements will be signed, outlining how assets will be divided in the event of divorce. This simplifies the process of overseas asset division, although the courts can overturn the agreement if they deem it to be unfair.
The courts may deem the agreement unfair if:
- It discriminates against children
- It is overly one-sided
- One party was forced into signing the agreement
- If the paperwork suggests signs of bias
Failing to declare overseas assets during a divorce
During divorce proceedings, you are legally required to provide an honest disclosure of your matrimonial finances, including overseas assets. If you fail to do so, you could be subject to a range of legal punishments, including:
- Contempt of court: Failing to declare overseas assets may be deemed as contempt of court, which can result in a fine or jail time.
- Payment of legal costs: If undeclared assets are uncovered, the offending party may be instructed to pay the other party’s legal fees. This will further increase the cost of divorce.
- Poor settlement: The overall divorce settlement is likely to go against someone who has been dishonest in asset declarations.
- Reopening the case: If overseas assets are uncovered after the settlement has been finalised, the case can be reopened and the outcome can be changed.
Expert legal advice from highly experienced divorce and family law solicitors
If you need assistance from experienced local divorce solicitors, contact Osbourne Pinner today for a free 30-minute consultation. There is no obligation to proceed, and all information exchanged will remain strictly confidential. Whether you need help with dividing overseas assets, or just want some general advice, we’re here for you. Get in touch via the form below, call 0203 983 5080 or email [email protected].
