Navigating Divorce Proceedings with International Assets

What Types of International Assets May Be Affected by a U.S. Divorce?

Any asset that has value can be involved in a U.S.-based divorce. Among the common international assets that couples want to account for are foreign bank and retirement accounts, real estate (for couples with multiple homes or investment properties), retirement accounts, or trusts. However, anything that has value and could potentially be considered marital property may be part of a divorce proceeding.

Is Virginia a Community Property State?

In a community property state, divorce courts place a priority on dividing marital assets (anything acquired or used jointly during the marriage) as closely to 50/50 as they can. Virginia is not a community property state. It’s an equitable division commonwealth. That means the court will focus on dividing things equitably, or fairly, rather than evenly. They’ll look at the facts of the case to determine who should receive what assets upon divorce. 

Among the factors examined in Virginia divorce court:

• Length of the marriage
• Age and health of each spouse
• What each spouse contributed to the marriage financially and otherwise (for example, if one spouse left their career to stay home with children)
• What each spouse is capable of earning
• What marital property and separate property (and debts) exist
• Potential tax consequences for each spouse

Can U.S. Courts Determine Division of Assets that Are Held in Another Country?

The divorce process can be highly complicated when it comes to asset division, and it’s even more so when there are international assets.

This is because U.S. courts don’t have the legal authority to order how assets held in another country, even if they belong to a U.S. citizen, should be divided, even though U.S. states regulate how U.S. marital assets are handled. Those assets are subject to the laws of the country in which they’re located (and also to local tax requirements).

How Can Foreign Assets Be Divided in a U.S. Divorce?

Because the complexity of asset division is exponentially more complex with foreign assets, there’s not one single answer to this question. There may be multiple international laws and regulations that come into play. When the assets are financial (bank accounts, etc.), transferring ownership from joint ownership to single ownership may be the answer as long as the transfer is done according to the laws of the country involved.

However, other types of assets, especially real estate, can be more complicated. While U.S. courts can’t legally divide real estate assets in another country, they can find ways to accommodate that in an equitable manner. For example, if the couple owns a flat in London, one spouse may be awarded the flat while the other is awarded a cash equivalent.

To accomplish that, the foreign property needs to be evaluated so its financial value can be determined and cash value assigned to the other spouse. It’s vital to have the property assessed by a third party so that each spouse is comfortable with the valuation and feels the outcome is equitable.

If you have foreign assets and are preparing to begin divorce proceedings, it’s highly advisable to work with a divorce attorney experienced in handling international assets.

Can Foreign Assets Be Hidden by One Spouse?

While many foreign assets held in a marriage are legitimate (second homes, items acquired while living abroad, etc.), there are times when one spouse will deliberately move assets to a foreign country to effectively hide them ahead of a divorce. Not only are those assets subject to the divorce and division of assets laws of the country they’re located in, but they’re also subject to any privacy laws there, meaning it can be difficult to completely inventory and evaluate them as part of the marital property.

However, while U.S. courts can’t issue legal orders that override foreign laws, they can order each spouse to provide full disclosure of all assets regardless of where they’re held. If one spouse thinks the other is hiding assets in another country (such as bank accounts in Grand Cayman), they should notify their attorney as soon as possible. Research and investigation may be needed to uncover any hidden accounts. Doing so during the divorce proceedings is more likely to result in equitable distribution than if they’re uncovered once the divorce is final.

Can Prenuptial Agreements Include Foreign Assets?

Yes. That’s an excellent way to handle the division of foreign assets. It’s also possible to detail those in a postnuptial agreement, which is similar to a prenuptial agreement except that it’s drawn up after the marriage has occurred. Foreign assets can be included, and their division is specified through these types of contracts.

It’s vital to ensure that such contracts are drawn up following Virginia laws in order for them to be enforceable. Contact your lawyer for more information and details.

What Should I Do if I Want to Pursue Divorce Proceedings with International Assets?

Call Jurach, Tacey & Quitiquit as soon as possible at 804-531-5524 to request a free consultation. These are highly complex cases that could benefit from the advice of our knowledgeable, experienced family law attorneys. International assets have to be approached with caution and a detail-oriented approach. We understand the nuances of these cases and can help guide you through what to expect and how to develop an approach for the best possible outcomes.