In this day and age, it is not unusual for people going through separation to hold overseas assets. They may have emigrated to Australia after building up assets in another jurisdiction, or travelled and lived overseas for a period of time. Sometimes people just choose to invest overseas. These assets can include overseas pensions, real estate, shares, companies and bank accounts. Regardless of how the assets came about, if they are owned by people who are going through a family law settlement they will likely need to be address in some way.
While it may sound a little odd. Australian Courts do have the power to make Orders dealing with assets held overseas if the Court decides that it is appropriate to do so. This is because section 31(2) of the Family Law Act gives our Court power to make Orders about ‘things’ and ‘people’ outside of Australia. The Orders will not be directed specifically to the asset, but rather to a party to the proceedings – requiring that person to do something with the asset, like transfer it to someone else. Sell it and disburse the proceeds in some way. Or even just to retain it in their own name.
Even though the Courts do have that power, dealing with overseas assets in a property settlement can still be a tricky area of family law if one person does not want to ‘play ball’ with the process. The first problem you may encounter if the other person is being evasive or not properly disclosing their holdings is proving that the asset exists at all, and then after you have done that, establishing precisely how it is legal owed. Once that has been done, you will need to establish what the asset is worth. This can mean obtaining valuations from afar, which can be logistically difficult and expensive. These issues can usually be worked out, but it can take some time.
Perhaps the most significant issue that people can run into in this area is deciding what to do once and Order has been made about overseas assets, but the person who is supposed to do the thing – e.g., transfer the asset, sell the asset, simply refuses. Some overseas jurisdictions will recognise and Australian Order and enforce it as if it had been made in that country, but other jurisdictions will not – it is up to each country. The Court may try to avoid this issue altogether if there are enough assets held within Australia to simply assign the overseas assets to the person who already holds them, and giving the other person a greater share of the Australian assets instead. Whether this is appropriate will of course turn on the particular facts of each case.
If you or your former partner own assets overseas and you are going through a property settlement, or think you might be in the future, contact us today on (02) 6225 7040 or by email on info@rmfamilylaw.com.au or get started now online.
Author: Anna-Kate Visser