Dealing With Overseas Assets During a Divorce

Many Americans hold substantial assets in foreign countries for various reasons. High-net-worth individuals often keep assets abroad for favorable tax treatment or to protect their wealth, since property held in foreign countries cannot easily be seized by U.S. based creditors or claimants. Sometimes, people illegally hide their wealth from domestic taxing or law enforcement authorities. Whatever the reasons or circumstances, divorce cases become more complicated when one or both spouses have asset holdings in other countries.

Property held abroad is subject to the laws of the country where it is located. Many nations have complex or unique laws concerning privacy, taxation and transfer of bank accounts and other property. In most instances, an American divorce decree will have little or no effect on how these foreign assets are treated by the sovereign authorities. Often, foreign laws will limit or negate any court orders or other legal strictures from the U.S.

These are some common difficulties in dealing with assets held abroad with respect to divorce proceedings:

• Locating assets — Some people deliberately conceal wealth from their spouses by way of foreign accounts. When one spouse refuses to divulge the existence of a foreign holding, the assets can be very difficult to locate.
• Valuation of assets — Most marital assets will be divided between the divorcing spouses. To accomplish this, the property must be properly valued. This requires finding credible appraisers abroad with experience in valuing assets in U.S. divorce cases.
• Division of assets — Enforcing an order of distribution from an American court can be challenging. In some cases, the court order may be in conflict with the laws of the foreign jurisdiction. Divorce counsel often will be required to take one or more additional legal steps with the sovereign authorities to allow the distribution of the assets.

These issues can be problematic but are usually solvable with the proper resources and efforts. Hidden foreign assets are often located through forensic accounting of domestic bank and taxation records. Expert appraisers in the foreign jurisdiction may be found to prepare accurate valuations. Ownership transfers of foreign property can often be completed with the assistance of counsel in the region. Any party to a divorce case in which foreign assets are involved should seek the advice and counsel of an experienced international family law attorney.

Based in Miami, the Law Offices of Lawrence S. Katz, P.A. is one of South Florida’s premier family law firms. Our practice focuses on international domestic relations and high net worth divorce cases. If you are involved in a divorce with an international financial component, feel free to contact us online or call 305-670-8656 for an initial consultation.