How Overseas Property and Offshore Assets Are Managed During a Divorce

Divorce and Overseas Property Division Property division is often the most complicated and contentious part of a divorce. Overseas property can further exacerbate the difficulties involved in valuing the marital estate and fairly dividing assets due to any of the following:

  • International property is subject to the laws and taxes of that country.
  • Spouses may have protected or hidden assets that are hard to locate.
  • Valuing overseas property may take specialized foreign appraisers.
  • Penetrating international privacy laws can be next to impossible.
  • Foreign countries may not enforce U.S. court orders without additional paperwork.

Handling Divorce and Overseas Property

Our firm handles all types of divorce issues, including complex aspects such as overseas property. We have noticed that couples can have varying motivations – some ethical, and some quite shady – for accumulating offshore assets.

In some cases, a couple may have lived overseas and simply left assets in that country when they moved to the U.S. Diversification of investment portfolios is another common reason a couple might have property overseas. And, of course, tax sheltering and hiding funds is commonplace, as well.

Some of the most common types of overseas property dealt with in divorce include the following:

  • Bank accounts
  • Foreign retirement accounts
  • Second homes
  • Investment properties
  • Foreign trusts

Overseas Property and Disclosure in Divorce

During the divorce process, there is a period known as discovery in which both parties must disclose all of their financial information. According to Georgia law, during a divorce, each party must list all property in their financial affidavits, including both marital and separate property. But just because divorcing parties are supposed to disclose all financials does not mean they actually will.

Sometimes one spouse simply will not divulge much information about overseas property, will lie about the value of that property, or will try to hide it completely.

This makes locating assets extremely challenging during the discovery process, especially if the spouse hides the property in a country with strict privacy laws. This is especially true if the country does not have a treaty or agreement, such as the Hague Convention, with the U.S. that would help locate the property.

Even if both spouses are completely transparent with the property they own overseas, valuing the property still poses huge challenges. Foreign countries tax property differently than in the U.S., and the result can have adverse tax implications for couples.

In addition, certain countries may require their courts to rule on specific issues rather than allowing the U.S. to do so.

Divorce and Overseas Property: Assessing Value 

As overseas property is often subject to the laws of the countries where it resides, it may be easier to just receive a valuation for the same domestic property and adjust that accordingly to represent the value of the overseas property. If either spouse disputes the valuation, the couple would most likely need to hire an appraiser in the property’s country to perform a valuation.

Protecting Your Best Interests During a Divorce

When assessing property for the purposes of equitable distribution, the first step is to list all assets and debts. The second step is to characterize each item as marital property or separate property. Spouses are free to keep whatever separate property or interest they own, including overseas property. If you owned a home in France prior to marriage, for example, any equity you owned up until the date of marriage is separate under Georgia law.

All property garnered throughout the course of the marriage is marital and is subject to division. Sometimes international property can become commingled, which adds additional layers of complexity to property division.

Because of the complicated nature of property division when you have substantial assets and overseas property, consult with David J. Ward, property division lawyer in Duluth, as soon as possible for assistance. David helps you locate and value overseas property, estimate the total value of your estate, and then negotiate a fair agreement that protects your best interests.

Contact our office today at 770-383-1973 or fill out our online contact form to schedule your REAL Case Analysis.