Divorce with international assets

I was on a video call at 6am, talking to a solicitor in London while my coffee went cold. He was patient. I was confused. He said, "your Australian court can absolutely make orders about your UK pension, but the UK pension provider may not be obliged to follow them, and that is the gap you need to plan for". I wrote it down on the back of a gas bill and underlined it twice. The gap. That phrase has stayed with me through a year of working out what an international divorce actually looks like.

If you have assets, income, or pensions that sit outside Australia, your divorce is not just an Australian matter. It is a cross-border problem with multiple legal systems, multiple tax authorities, and multiple opportunities for things to go quietly wrong. The good news is that Australian family law is, by world standards, quite robust at dealing with this. The bad news is that "robust" is not the same as "easy".

Here is the lay of the land.

The jurisdiction question

The first thing a family lawyer will ask if you have international assets is whether the Australian court has jurisdiction to deal with the marriage at all. Usually it does, if either party is an Australian citizen, ordinarily resident in Australia, or domiciled in Australia. Most expat couples and most mixed-nationality couples pass this test without difficulty.

Where it gets interesting is when both parties have a real argument for being elsewhere. If she has moved to her home country and is filing there, and you are still in Sydney filing here, you can have parallel proceedings in two jurisdictions. The first to lodge does not always win. Courts use a doctrine called "forum non conveniens" to decide which court is the more appropriate forum. They look at where the assets are, where the children are, where the marriage was based, where the witnesses live.

This is genuinely strategic. Different countries have wildly different family law regimes. England and Wales is generous to the financially weaker spouse and ignores prenups loosely. Some US states are community-property (assumption of 50/50). France and Germany have matrimonial property regimes that may already define the split. Australia is discretionary, weighing contributions and future needs. The same marriage settled in different countries can produce very different outcomes.

If your spouse is moving overseas or is from overseas, get advice early about jurisdiction. Lodging first in the right court can matter. So can carefully not lodging in the wrong one.

Treaty considerations

Australia has a number of bilateral and multilateral arrangements relevant to family law:

• The Hague Convention on the Civil Aspects of International Child Abduction. Important if she takes the kids overseas without consent or refuses to return them after a holiday. Australia and most major destinations are signatories. Non-signatory countries are a different and harder problem.
• Reciprocal enforcement of maintenance orders. Australia has arrangements with many countries (including the UK, NZ, Canada, US, and most of Europe) where a spousal or child maintenance order made in Australia can be enforced overseas, and vice versa. The Department of Human Services International Section handles this.
• Tax treaties. Most relevant to which country taxes what during and after settlement.
• The Hague Convention on Service Abroad. For serving documents on a spouse who lives overseas.

What Australia does not have is broad bilateral enforcement of property orders. This is the gap I mentioned earlier. An Australian court can order that you transfer your UK pension entitlement, but the UK pension scheme is not bound by an Australian order. The UK fund will only act on a UK pension sharing order made by a UK court. So even with a clean Australian settlement, you may need ancillary proceedings in the foreign jurisdiction to actually move the asset.

Plan for this. Build into the Australian orders an obligation to take whatever steps are required in the foreign jurisdiction to give effect to the agreement, with timelines and consequences for non-compliance. Most international family solicitors have template wording.

Asset characterisation

Different countries treat the same asset in different ways. This is the "asset characterisation" issue.

A UK pension. In the UK, pensions can be split via a pension sharing order, an offsetting arrangement, or earmarking. The Australian super-splitting framework is not the same. A UK final salary pension in your name will appear on the Australian asset schedule, but how it is valued and how it is divided requires UK input. Australian valuers usually cannot value UK defined benefit pensions correctly without UK actuarial assistance.

US real estate. A property in your name in California. The Australian court can order that you transfer or sell it. The Californian title office will not act on an Australian order. You will need a US deed, signed by you, possibly executed before a US notary, to actually convey the property. Sometimes a US ancillary proceeding is needed.

NZ business. A company you part-own in Auckland. Valuation is reasonably straightforward (NZ accounting standards are similar to Australian). Transfer of shares is governed by NZ company law. The Australian order can require you to transfer or sell, but the mechanics happen under NZ law.

Foreign trusts. The hardest category. A trust set up overseas, with you as a beneficiary or trustee, may or may not be characterised as your asset. Australian courts can look through some structures (the doctrine of "alter ego" or "mere puppet") and treat trust property as available to the parties. Foreign trustees in non-friendly jurisdictions can complicate enforcement enormously. If you have a discretionary family trust set up in (say) Singapore or the British Virgin Islands, get specialist advice immediately. Do not pretend it is not there. The other side's lawyer will find it during disclosure and the consequences of non-disclosure are severe.

Foreign cryptocurrency holdings. Treated as property like any other crypto. Disclosure is required. Valuation is at the date of agreement or as the court directs. The cross-border element matters mainly for tax (which jurisdiction taxes the disposal) and access (where the keys actually live).

Valuations done overseas

You cannot value a London flat from Sydney by looking at a website. Or, you can, but the court will not accept it. Foreign property and business interests need valuations done in the country where they sit, by valuers who are qualified in that country, and the report has to be in a form acceptable to the Australian court (or the court of whichever jurisdiction is dealing with the matter).

This means:

• Engaging a valuer in the country where the asset is located.
• Paying for a written report in English (translated if necessary, with a certified translation).
• Allowing time. Valuations from overseas typically take longer than Australian ones, especially when chasing access to property held by your spouse.
• Allowing for currency conversion at a date the court will accept (usually the date of trial or the date of settlement, with sometimes a midpoint adjustment for fluctuation).

Currency is its own beast. Foreign asset values can swing 10% in a quarter just on exchange rates. Most settlements pin a valuation date. Some include hedging mechanisms. If a major currency move happens between agreement and execution, fights happen. Get the date and the methodology nailed down in the orders.

When foreign assets can be ignored

Almost never, but here are the narrow cases.

Assets that are genuinely de minimis. A bank account in your home country with $400 in it that you forgot about. The court is not going to relitigate a settlement over $400. Disclose it anyway, but no one will care.

Assets that one party clearly brought into the marriage, kept separate, and that the other party never benefited from. This is the "initial contribution" argument. A house in your name in your country of origin, owned before the marriage, that she never lived in or contributed to, gets weighted as your contribution. It still has to be on the schedule. It just gets a different treatment in the maths.

Assets in jurisdictions so hostile to enforcement that the cost of pursuing them exceeds the value. A small holding in a country that does not recognise foreign orders, and where local lawyers will not take the case, and where bringing proceedings would cost more than the asset is worth. Even here, the court will note the asset and may adjust other parts of the settlement to compensate. It will not just disappear.

Assets that have already been the subject of foreign proceedings between the parties. If a UK court has already made orders dealing with a UK pension, an Australian court will usually respect that and not relitigate the same asset. Concurrent or sequential proceedings need careful handling.

In every other case, foreign assets are part of the pool. Hiding them is a fraud on the court. Pretending the Australian court cannot deal with them is wrong; it can. Pretending the foreign jurisdiction will not enforce the Australian order may be partly right, which is why dual orders or carefully drafted ancillary obligations matter.

Practical steps for cross-border separations

If you have international assets and you are heading into separation:

• List every asset, every account, every property, every entity, in every country. Even the dormant ones.
• Engage a family lawyer in Australia who has international experience. Not all do.
• Engage local counsel in any country where significant assets sit. Even an initial consultation. They will tell you what is enforceable, what is taxable, and what is at risk.
• Get accountants in each relevant country to model the tax consequences of a transfer, sale, or split. CGT in Australia, CGT in the UK, capital gains in the US (federal and state), each country's rules.
• Consider whether to pursue parallel proceedings, sequential proceedings, or to concentrate on one jurisdiction. This is a strategic call to make with both teams informed of each other.
• Disclose fully and early. Hidden foreign assets are the fastest way to lose credibility with an Australian court.
• Build into the final orders specific obligations to do whatever is needed in the foreign jurisdiction. Deadlines. Consequences. Documents already drafted, ready to sign, attached as schedules.

What men get wrong

Treating foreign assets as someone else's problem. They are yours. The court will care, the other side will care, and the missing disclosure shows up in cross-examination.

Underestimating the cost of execution. Even with clean Australian orders, moving a UK pension or a US property may cost five to fifteen thousand in foreign legal and tax fees. Build that into the deal.

Assuming a foreign prenup binds the Australian court. It might. It might not. Australian courts have set aside prenups, including foreign ones, where disclosure was poor or independent advice was missing. Do not rely on a five-year-old document signed in another country without checking it now.

Forgetting tax. The disposal of a foreign asset can be taxable in the foreign country, in Australia, or both. Tax treaties allocate, but they do not eliminate. A poorly structured transfer can cost six figures in unanticipated tax.

International divorce is not harder, exactly. It is heavier. More moving parts, more lawyers, more time, more documents to sign in front of more notaries. A good cross-border family practitioner can take the heaviness off you and put it where it belongs (on a process). Without one, you are doing a triple-jurisdiction settlement with single-jurisdiction expectations.

DISCLOSE everything. Plan the execution. Pay the right specialists.

Borders complicate. They do not exclude.