Dividing Overseas Assets After a Divorce in Australia
If you own valuables or assets overseas and are planning to file a divorce in Australia, you may start to worry about the state of these properties after a divorce.
Worrying about your foreign-held assets is normal.
After all, you've worked hard and spent money to expand your ownership. Losing your assets after a divorce is the last thing you want to happen.
Luckily, Australian law has legislation covering the division of overseas assets after a divorce. In this blog post, we'll uncover the basics of property settlement in Australia and what are your legal options when dividing overseas assets after a divorce in Australia.
Understanding Property Settlements in Australia
Property settlement refers to the mutual agreement between both parties regarding dividing assets, appointing liabilities, settling debts, and other financial arrangements after a divorce or separation.
A well-established property settlement provides clarity and avoids tension between both parties.
Contrary to popular belief, property settlements can be arranged outside the court.
Both parties must finalise their property settlement by obtaining a consent order or a financial agreement.
Binding financial agreements and consent orders may have similarities, but they also have vast differences. If both parties create a binding financial agreement, they must seek independent legal and financial counsel to ensure their best interests are met. In contrast, a consent order can be arranged without a lawyer, but having one is highly beneficial.
The court must approve a consent order, which is not required in a financial agreement. Furthermore, the scope of a financial agreement is limited only to finances and properties. In contrast, consent orders also involve parental arrangements.
The Scope of Property Settlement in Australia
Property settlement applies to anything with value. It includes conjugal properties or properties owned independently by both parties, such as:
- Overseas and local properties
- Superannuation
- Real estate or commercial properties
- Business and trust interests
- Inherited assets
In most cases, the items listed in a property settlement are predominantly assets. However, you can also include liabilities and debts in this agreement. This include:
- Debts
- Taxes
- Personal and business loans
- Stamp duty obligations
Speaking with an experienced international family law attorney can help you identify which assets and liabilities you can include when drafting a property settlement.
How Are Overseas Assets Evaluated During Property Settlement in Australia?
As mentioned above, the Australian court will have jurisdiction to manifest orders over foreign-held assets following the Family Law Act section 31(2).
The scope of this legislation extends to internationally-owned properties, money stored in overseas accounts, international shareholdings, and many more.
However, the enforcement of court orders can get complicated.
Some countries may not recognize the order of the Australian Family Court, leading to problems in overseas property division.
In these cases, the powers of the court order made by the Australian family Courts are limited to the individuals involved.
In a situation where the country recognizes Australian jurisdiction, they will implement the court order as if they created it. For this reason, the Australian court weighs the following factors when settling a division of foreign properties:
- The country where the property is located or stores
- The estimated cost incurred after the process
- The nature or connection of involved individuals to the other country.
We will provide some examples on dividing overseas assets after a divorce in Australia to help you understand how this would work.
For example, we had a case where our clients held money in China and were ordered to send that money from China to a bank account in Australia.
This order was not recognised in China, and it meant that the client could not send that money from China to Australia as there are restrictions on money transfers from China to other countries.
Another example was when we had a matter where the husband had a property in Greece and didnt want to transfer it over, as a result our client received a larger portion of the property in Australia.
Options for Dividing Overseas Assets After a Divorce in Australia
Now that you know how the Australian Family Court treats overseas properties, it's time you understand your options when settling foreign-held assets after a divorce.
Firstly, the most straightforward option you have is to settle property arrangements outside the court
You can achieve this if you and your former spouse mutually agree on how you want to partition your foreign properties.
A Binding Financial Agreement
As mentioned above, you may also opt to avoid court intervention by establishing a binding financial agreement.
With a binding financial agreement, you create an enforceable contract for dividing assets and properties, including overseas properties, after a divorce.
The best thing about financial agreements is that it has a sense of finality, meaning both parties will most likely adhere to what's included in the contract.
However, the court may set aside a financial agreement if one party fraudulently signs it.
Another great thing about financial agreements is it requires individual legal and financial consultation for both parties involved.
This ensures that both parties understand the scope, limitation, and application of the agreement's terms, preventing future conflicts.
Consent Orders
Another legal option you may choose to pursue is filing for a consent order. Similar to financial agreements, consent orders do not require court intervention.
You, your spouse, and your representatives may prepare the consent order and bring it to the court for approval. If the court sees the order as just and reasonable, they will grant you consent.
Compared to financial agreements, consent orders have more finality as it was initially reviewed by the court. Furthermore, a consent order has fewer restrictions than a binding financial agreement.
Litigation
If you and your former spouse cannot settle a conclusion, the Australian Family Court may have to intervene. Litigation is the most intensive process on this list.
When you decide to undergo litigation, you must expect to commit more time, money, and effort, as the court will have many factors to consider.
The family court may consider your preferences, but there's no guarantee they will grant it.
When undergoing litigation, you have little control over what you can keep and what you have to let go.
Although this is not the best option, this might be your only option
. The best thing you can do is to hire an experienced international family lawyer to preserve your properties overseas.
Choosing The Best Option when Dividing Overseas Assets After a Divorce in Australia
The best option varies depending on your circumstances. If you and your former spouse are highly communicative and agreeable, a non-legal settlement may be your best choice. If you want to have some form of legal backing or finality, opting for a financial agreement or consent order might suit you. If the other party is unreasonable or doesn't want to communicate, litigation might be your only hope.
Consulting with an international family lawyer should be your first step when dealing with these cases. An experienced international family lawyer can help you evaluate your circumstances and establish a feasible legal plan to help you keep your international properties and assets.
Protect Your Assets Overseas After a Divorce in Australia
When you are faced with a decision to partition your overseas properties with your former spouse, you must never deal with this alone. Having experienced international family lawyers by your side can help even the odds and even prevent the other party from taking your property from you.
At Justice Family Law, we help our clients with international property settlements by devising the best legal strategy for their situation. Our legal team is composed of individually established international family lawyers.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
