Overseas Property Law

Are overseas assets included in Australian asset division for Divorce property settlements?

In our increasingly connected world, the countries, oceans and continents that used to divide us are now bridged by technology. International travel is more affordable than ever, and the internet, Skype and social media mean that it’s easy to stay in touch with someone on the other side of the world.

As a result, in this increasingly cosmopolitan world, more and more relationships occur between two people who live in different countries. But, what happens to the foreign assets when a marriage between an Australian and someone from another country ends in divorce?

When these relationships break down, there are often issues surrounding how foreign assets are dealt with. The Family Courts of Australia determine how the property from a relationship should be split following a divorce. This involves:

• Understanding the assets held by both parties (known as the asset pool);
• Understanding the financial and non-financial contributions both parties have made to the relationship;
• Determining whether adjustments need to be made when considering the future needs of both parties; and
• Deciding whether the settlement is just and equitable for both parties.

Overseas property settlement: disclosing assets

During your property settlement, you have a duty to make a full and frank disclosure about your financial affairs. This includes all of your property and your financial resources, including foreign assets.

As part of the property settlement, you’ll be asked to provide a Financial Statement. This should include the nature and value of all assets you hold.

If you fail to include overseas assets as part of your Financial Statement, the other party can make an application to the courts to set aside any agreement reached by consent or made by the courts previously and to reopen the original proceedings.

International family law and asset division

As part of the Australian family law process, if you have foreign assets, then they will generally be taken into account when the court is deciding the settlement. This is because section 31 (2) of the Family Law Act (1975) states that the jurisdiction of the courts “may be exercised in relation to persons or things outside Australia and the territories”.

In simple terms, this means that if you own land in another country or have a foreign bank account, this asset is counted as property even if you believe that your spouse is not entitled to it.

However, consideration must be given to whether Australia has or should be given jurisdiction, not just to consider the value of the asset as part of the property settlement, but to actually deal with or make Orders in relation to overseas property.

While Australian courts can make Orders ‘in personam’, meaning requiring an individual or person to do something, this will only be effective if the owner of the property is in Australia, so that the Order can be enforced against them, if necessary.

Australian family courts are otherwise cautious about making orders about overseas property, as Australian Orders may not be able to be enforced in other jurisdictions.

Other things to consider when it comes to overseas property settlements

When it comes to international family law and asset division, each case is different. As the laws relating to the division of international property in a divorce are complex, you should seek independent advice as early as possible. Before you decide to divorce, here are a few extra points to consider:

• If you married in Australia but are now living overseas, you’re legally classified as an expatriate of Australia, which means you can file for divorce in Australia or the country you’re currently residing in;
• To get a divorce in Australia, you must have been separated for no less than 12 months;
• There’s a 12-month deadline for making an application for property settlement with the Family Courts after the date of divorce, but this is different in other countries around the world;
• You cannot avoid the reach of the Australian courts by moving assets overseas over a period of time;
• An overseas divorce is not a bar to making an application to the Australian courts for property or maintenance proceedings;
• With respect to superannuation, Orders splitting Australian superannuation interests can only be made by the Australian family courts and an Order made by an overseas court regarding splitting Australian superannuation is ineffective; and
• Likewise, superannuation or similar interests in an overseas jurisdiction may need to be dealt with in that jurisdiction as opposed to Australia (e.g. 401K interests in the United States).

Seek expert advice on overseas property law

Due to the complexity of overseas property law, it’s worth seeking expert advice on your matter at the earliest stage possible in the process, initially for determining the most appropriate jurisdiction to obtain Orders and thereafter to ensure that any Orders agreed can be enforced either in Australia or overseas.

Even if you believe that your divorce will go smoothly, you should enlist the help of an experienced international family lawyer as soon as possible. This will help you deal with the emotional stress of the process, ensure that you declare all relevant information and achieve a fair settlement.

If you are considering divorce or separation and you have property overseas, it is advisable to enlist the help of a lawyer who has experience in international jurisdictions.