Key Considerations for International Property in Family Law Matters

It is no longer uncommon for Australian citizens and residents to own property or assets in both Australia and overseas.  After all – we as Australians love to travel!  Many of us now spend a few years in the UK or the US on a working holiday or a secondment before returning to Australia and settling back down.  It makes sense that all this travel also leads to a large number of Australians not only owning property or assets in Australia, but owning assets overseas– in the UK, the US, China, New Zealand, Taiwan, Singapore… you name it.  The list goes on and on.  Being such a multicultural society, we also see clients who have moved to Australia after residing internationally for most of their lives, with the majority of their property pool actually located overseas.

So, how do we deal with international property in family law matters in Australia?  This is a complex area of Australian family law – but we have broken down a few key points below for you to start thinking about if you have international property.

The country your overseas property is located in may change the outcome of your matter

Family law is dealt with and determined completely differently in different jurisdictions.  For example, the way the Court determines family law matters in China or Taiwan could lead to a different outcome than the way the Court deals with family law matters in Australia. Many jurisdictions completely exclude property owned before the parties got married, which can have a big impact on de facto relationships or relationships where parties cohabited for some time before being married.  Some jurisdictions exclude property obtained by way of inheritance from the property pool entirely, which can change the outcome of matters where one party has received a large inheritance from their parents or grandparents. Some jurisdictions equally divide all property acquired by the parties during the relationship while other jurisdictions, such as Australia, operate by way of a balancing exercise where all contributions are considered and assessed.  What this means is that the country in which you choose to litigate or deal with your family law matter may have an enormous impact on how the division of property ultimately occurs.

When clients come to us with international property, the first step we take is to ascertain how much of the property pool is overseas and whether our clients are dual citizens or residents in the other country.  We then speak to a family lawyer in that country to obtain details of how family law operates in that country and whether our clients are eligible to bring a family law application in that country.  We then help our client make an assessment as to whether it would be beneficial for them to deal with their family law matter in Australia or overseas. 

This is a critical stage in dealing with matters which include international property, and one that can often be easily overlooked.  Of course, if Court proceedings have already been filed in Australia before our clients come to see us, then there may not be much we can do in this respect.  However, there are also avenues available in Australia to have family law matters dismissed and the matter instead heard overseas if the Court ascertains that Australia is a clearly inappropriate jurisdiction to hear the matter.  But this is a different matter entirely– and something for us to discuss another day!

If you have decided to deal with your family law matter in Australia, then we start to look at some of the issues below.  

Your overseas property will form part of your property pool in Australia

There are some misconceptions out there about overseas property – many clients come to us with the view that the Federal Circuit and Family Court of Australia is unable to make any orders in relation to overseas property that this property is excluded from being considered when dealing with family law in Australia.  This is incorrect. 

You may recall from a previous blog article of ours – that the first step the Court takes when they are assessing the division of property in family law matters is to ascertain what items form part of the property pool available for division.  This also includes any property that is located internationally, not only in Australia.  As such, keep in mind that any real property, bank accounts, shares, businesses or entities, superannuation, pension accounts or any other items located overseas still form part of your property pool and must be disclosed in the family law matter in Australia.

How does the Federal Circuit and Family Court of Australia deal with this property?

The property is taken into account the same way as your Australian property and is available for division in a family law property settlement.  However, there is one major difference in how we deal with matters with international property – which is that we must consider what steps need to be taken in Australia and overseas to ensure that any Final Orders issued by the Family Court of Australia are binding and can be enforceable overseas as well as in Australia. For example, if the agreement reached between you and your Ex deals with the transfer of an overseas property from one party to another, then we must consider whether this is possible, what tax consequences may apply, and what documents need to be signed overseas to ensure that this agreement is also binding overseas.  This may mean that in conjunction with Consent Orders, you and your Ex also sign a Deed or other document overseas to ensure that all aspects of your matter are formalised.

If you and your Ex are unable to agree on how the overseas property will be distributed, then the safest way to deal with the overseas property is for the property to remain in whoever’s name it is in, and for there instead to be a payment of cash to balance out the agreed percentage division of the property pool.  The advantage of having only a monetary sum exchanged from one party to another, is that the payment of the monetary sum is an order that is usually accepted and enforced by overseas Courts, provided that the order is outlined in a Final Order from an Australian Court.  A Consent Order which is agreed between you and your Ex will in most countries be considered a Final Order for this purpose.

One other significant consideration when dealing with international property, is to ensure that any agreement reached between the parties is a concluded agreement that will be recognised in the overseas jurisdiction as well as in Australia.  This is important as if your agreement in Australia cannot be recognised in the overseas country, then your Ex may be able to bring a second set of family law proceedings in the overseas country and try to seek a second family law settlement.  Many countries do recognise a Final Order from an Australian Court and will agree to be bound by such order.  However, this is something to consider and check before you enter into any agreements or prior to filing proceedings.

What should you do if you have international property?

As you can see, dealing with international property in family law matters can be complex and tricky.  There are several considerations to take into account, and it is important to receive legal advice to ensure that you end up with an outcome that is just, equitable and enforceable.  We recommend that you contact a family lawyer who deals with international property to ensure that your family law property settlement is dealt with correctly and all aspects of the settlement are carefully considered. 

If you would like to discuss how to deal with your family law matter,  book a free 30-minute CLARITY CALL to see how we can help you. 

***Disclaimer***

This article is for general information purposes only and does not constitute legal advice or any other professional advice.