Dividing assets in a divorce can be challenging, but if those assets are spread across multiple countries, enforcing court orders related to the assets and the divorce becomes a legal minefield. Spouses with foreign properties, offshore accounts, or international business interests often face roadblocks that can delay settlements and make for complex custody cases.
For families in Maryland, international assets can impact the determination of where a child will live, which court has authority, and whether that court will enforce a U.S. judgment. Without a clear legal strategy, these challenges can escalate into years of litigation.
The following breaks down how international assets further complicate divorce and custody proceedings and some legal strategies that can protect a parent’s financial interests and parental rights.
How International Assets Complicate Divorce Proceedings
When foreign properties, offshore accounts, or international investments are involved in a divorce, the legal obstacles multiply. Unlike domestic assets, which are subject to domestic divorce proceedings, international assets fall under the laws of the country where they are located. This creates major legal hurdles, including:
- Conflicting property laws: Some countries follow community property laws, requiring an equal division of a couple’s assets. In contrast, others require equitable distribution, which weighs factors such as the income of each spouse and their contributions to the marriage. The bottom line is that what is considered fair or equitable under U.S. law may not be recognized as such overseas.
- Limited enforcement power: A Maryland court’s ruling to divide an overseas asset may have no legal authority if the foreign country does not recognize it.
- Hidden wealth and asset shielding: Offshore accounts, shell companies, and foreign trusts provide legal loopholes for spouses who want to hide assets or underreport income.
Without the help of forensic accountants, tax experts, and international legal counsel, a spouse may lose access to millions in concealed assets or face years of expensive litigation abroad.
Enforcing Custody and The Division of Assets Across Borders
Even after a Maryland court issues a divorce decree or custody order, enforcing it across international borders can be challenging. Many foreign governments do not recognize U.S. court rulings, meaning spouses and parents must take legal action in multiple jurisdictions to secure compliance.
Challenges in Enforcing the Division of Assets
- The foreign government may reject the U.S. ruling: For example, a Maryland court may award a spouse ownership of a vacation home abroad, but the foreign court may not recognize the judgment.
- Banking secrecy laws: Some countries have strict financial privacy rules, making it difficult to track down concealed offshore accounts.
- Tax and inheritance barriers: Capital gains taxes, foreign estate laws, and inheritance restrictions can complicate the division of overseas assets.
Challenges in Enforcing Custody Orders
The risk of parental abduction: If a parent moves a child to a country that is not bound by The Hague Convention, the legal remedies may be limited or nonexistent.- Cultural custody laws: Some countries automatically grant custody rights to one parent based on gender or nationality, which may contradict Maryland’s custody laws.
- Visitation and travel restrictions: Parents with visitation rights may struggle with visa denials, high travel costs, or interference from foreign courts, making it impossible to maintain regular contact with their children.
Without strong legal action and international cooperation, enforcing domestic rulings on child custody and the division of assets across borders can take years of litigation or fail entirely.
Strategies for Managing Complex Custody Cases Involving International Assets
Divorce and custody cases with international assets require careful planning and legal expertise. The following strategies can help protect a parent’s financial interests and parental rights:
1. Identify and Value International Assets Early
- Work with forensic accountants to locate hidden foreign accounts, offshore investments, and real estate holdings.
- Obtain independent appraisals for overseas properties and businesses to ensure accurate valuation.
- Consider the currency fluctuations and tax implications when dividing foreign assets.
2. Address Jurisdictional Issues Before They Become Problems
- If both spouses have ties to different countries, determine which jurisdiction will handle the divorce and custody case.
- Prenuptial or postnuptial agreements can specify how the parties must divide international assets, reducing future disputes.
- If a parent is concerned about international relocation, custody agreements should include travel and residency restrictions.
3. Use International Treaties and Legal Agreements
- The Hague Convention provides legal options for retrieving children who have been taken abroad wrongfully.
- Some countries have reciprocal agreements that help enforce U.S. court orders.
- Consulting with a skilled family law attorney with experience handling these types of cases is necessary to understand which international treaties apply to the case.
4. Plan for Tax and Financial Consequences
- Work with tax professionals to understand how foreign tax laws affect alimony, child support, and the division of assets.
- Factor in the inheritance laws and estate planning regulations in different countries.
- If an international business is involved, explore buyout options or structured settlements to minimize the financial risks.
5. Enforce Child Custody and Support Orders Before a Problem Arises
If a spouse refuses to comply with financial or custody orders, legal action may be necessary in the country where the assets or child are located.- Filing for enforcement through international courts or embassies may be necessary.
- Be aware of countries with weak enforcement mechanisms; some do not honor extradition or foreign court orders.
By taking a proactive legal approach, parents and spouses can protect their rights, secure financial interests, and avoid prolonged disputes.
Contact Milstein Siegel For Help With a Divorce Involving International Assets
An overseas bank account can delay a divorce for months, a foreign property dispute can cost thousands in legal fees, and complex custody cases across borders can leave a parent without legal options.
At Milstein Siegel, we help Maryland families with divorce and custody cases involving international assets. Whether you need to divide property overseas, fight for custody across borders, or enforce a court order abroad, our legal team has the experience to skillfully guide you through the process. Contact Milstein Siegel today to request a consultation, protect your rights, and secure your future.