Overseas assets are becoming increasingly more popular amongst Australian citizens, partly due to the growth of international trade and greater migration. However, things get complicated when couples in a marriage or de facto relationship decide to separate and these overseas assets need to be divided like the rest of the assets in the property pool.
Property is defined very broadly in the Family Law Act. It is defined as property in relation to the parties to a marriage or de facto relationship to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion. Therefore, overseas property falls into this category.
Duty of disclosure
Under the Family Law Act, all persons must provide a full and frank disclosure as to assets, liabilities and financial resources, irrespective of the location of the property. This will likely require you to disclose the value of the asset. However, separating couples will need to agree on the value of the asset, and if they cannot, an expert evaluation will be required, most likely from an expert from the country that asset is in.
Australian Courts
Where the parties are Australian residents, the proceedings are usually dealt with in the Australian courts, even if one or both of the parties are not an Australian citizen, as Australian courts have the power to rule on the division of international property. However, even though the courts do have the power to make orders regarding foreign assets, it may be more appropriate for the matter to be heard where the asset is held. This is because Australian courts can only require a person to deal with overseas property in a certain way but cannot directly secure or enforce the outcome themselves.
If the Australian court is going to hear the matter and make orders on the asset, it is recommended that you obtain a property settlement agreement in the country where the asset is situated, to ensure compliance.
Court’s considerations
If the parties cannot agree on where the matter should be heard or if the Australian court is unsure whether they should hear the matter, the court will apply the “close connection test” to help determine the most appropriate jurisdiction to hear the matter. The test will determine the country that the parties have the closest connection with, such as where they live or where most of their assets are held.
Other factors that will be considered by the court are:
- The specific location and nature of the asset;
- The ownership or structure of the asset;
- The acquisition and preservation of the asset before, during and after the separation;
- Whether the other jurisdiction will recognise an Australian court order and vice-versa;
- Which jurisdiction will provide the best resolution of the dispute;
- The order in which each of the proceedings were instituted; and
- The costs and expenses involved in the proceedings in either jurisdiction.
For more detailed information about property settlements, please read our previous blog ‘top tips to resolve your family law property settlement’.
Nicola Maltman – Law Clerk – Matthies Lawyers
Should you have any queries in regard to overseas assets in a family law property settlement, please contact Matthies Lawyers for an obligation free consultation or call +61 3 8692 2517 today.
Disclaimer: This article contains general information only and is not intended to be a substitute for obtaining legal advice.