International Assets in Family Law
International Assets in Family Law: What You Need to Know
If your wealth extends beyond Australia—whether through property, investments, trusts, or superannuation held overseas—navigating a separation or divorce becomes more complicated. International assets raise issues of disclosure, valuation, enforceability, and jurisdiction. Getting this right can make all the difference in achieving a fair settlement that truly reflects your financial position.
This guide gives you clarity on how Australian family law treats overseas assets, highlights real-world examples and case law, and outlines practical steps to protect your interests.
Overseas Assets Are Part of the Property Pool
Under Australian family law, all worldwide assets—including those held in other countries—form part of the property pool. Whether it’s a rental property in Europe, shares listed abroad, bank accounts in a foreign jurisdiction, or a superannuation-like fund overseas, the duty to disclose applies to you just as much as to assets in this country.
While Australian courts may not directly enforce orders against foreign-held property, they can make in personam orders, such as requiring you to transfer your interest or compensate the other party with domestic assets if that’s what gives effect to fairness.
Reviews
How Courts Handle International Assets
- Australian courts follow the same four-step property division framework, but the presence of offshore holdings introduces extra layers:
- Identification and Valuation: You must identify, value, and fully disclose overseas assets, whether in property, cash, shares, or other investments. Valuation can be particularly complex—requiring foreign expert reports and verifying exchange rates. Currency fluctuations, cultural differences in property markets, and legal systems add complexity.
- Contributions (Financial and Non-Financial): Courts assess what you and your partner contributed—financially or otherwise—toward those assets. Did you contribute to mortgage payments for a villa abroad? Did you support the career overseas that generated those savings? Such indirect contributions count.
- Future Needs: Courts consider each party’s future needs. If one partner is retaining volatile international assets while the other has domestic obligations, judges may adjust the division in favour of balancing long-term financial security.
- Just and Equitable Outcome: Fairness matters more than equality. If enforcement of a foreign property order is uncertain, courts may compensate the disadvantaged spouse through other assets within Australia, ensuring the outcome remains equitable.
Jurisdiction May Be Limited Over Foreign Assets
Where assets lie abroad, the court must assess whether Australian jurisdiction can meaningfully enforce orders. If enforcement is uncertain, the focus shifts to compensation through domestic means—rather than direct orders over foreign property.
Kowaliw v Kowaliw (1981)
This case established the principle of “notional add-back.” If a party has recklessly depleted assets—including offshore holdings—the court may treat them as if still part of the pool to ensure fairness.
Kennon v Spry (2008)
Although a trust case, this High Court decision underscores that control over assets (even offshore through trusts) matters more than formal title. Discretionary or foreign trusts controlled by one party may still be counted in the property pool.
Prest v Petrodel Resources Ltd (UK, 2013)
This case confirms that courts may pierce corporate structures where companies (including offshore ones) are used to conceal assets. While not Australian, its principles influence how courts treat opaque structures in complex separations.
Case Law & Principles to Know
Australian Courts Can Account for Overseas Assets
Even if an Australian order isn’t enforceable overseas, the court can adjust divisions here to reflect international holdings. For example, the court may let you keep your overseas home, but order a larger payout using your domestic assets instead.
Real-World Example
- Imagine you own a condominium in Spain, shares listed in Hong Kong, and an inheritance in overseas super. At separation:
- You disclose those assets. An independent valuation is arranged.
- Your former partner may ask for a trustee-led valuation of the condo, using a local expert.
- If enforcing the sale in Spain is unrealistic, the court may adjust your settlement—say, you keep the condo, but your former partner receives a larger share of Australian assets to reflect that in the global pool, you have more.
Practical Steps If You Have International Assets
- Disclose Early and Fully: Transparency matters. Provide details of foreign property, bank accounts, shareholdings, trusts, or pensions—even if held jointly.
- Seek Foreign Legal Advice: If you own property or assets in another country, get advice from a lawyer in that jurisdiction. It’s essential to understand whether an Australian order can be enforced where the asset lies.
- Obtain Independent Valuations: Foreign valuations must be credible and current. They often require on-the-ground valuers familiar with local markets and currency risks.
- Consider Currency Risks: Agree on a valuation date close to separation or commencement of proceedings to avoid unfair exchange-rate impacts as currencies fluctuate.
- Build a Strategic Settlement Plan: If enforcement overseas is uncertain, be ready to negotiate using domestic assets. A skilled family lawyer can help structure that balancing outcome efficiently.
- Protect Against Dissipation: If you suspect assets may be hidden or moved offshore, freezing orders (if supported) can protect your access to justice and preserve value.
Sample Scenarios
Scenario 1 – Overseas Home Retained
You keep your beach house in Thailand; to compensate, your former partner receives an equivalent value in Australian assets. This offers a practical outcome, even though selling outside Australia may be difficult.
Scenario 2 – Hidden Offshore Business
If your partner runs a lucrative business barn in Europe, hidden in a trust, forensic accounting may trace its value. The court may then equitably adjust your settlement here, even if taking control of the business itself is not possible.
Scenario 3 – Foreign Superannuation
If you hold a US-style retirement account that cannot be split under Australian law, courts treat that as a financial resource, which can still influence the fairness of the division.
Frequently Asked Questions
Conclusion: Plan Strategically for Your Global Portfolio
If your family law matter involves international assets, proactive planning is essential. Full disclosure, professional valuations, legal advice in all relevant jurisdictions, and smart settlement strategies will be key to securing fairness.
Approach the process as an integrated global puzzle—not fragmented pieces. When done right, the outcome can reflect your effort, investment, and the full value of what you’ve built, both here and abroad.