Can California Courts Access International Property in Divorce?
The United States has historically been known as “the great melting pot.” What this very often means is that two people can find one another in the United States who have strong roots in another country. For two people whose lives are lived not just in one country, but two or more, divorce can be even more complicated. One issue that often arises, in high net worth divorce in particular, is conflict surrounding division of property that is outside of the United States.
Foreign real estate, foreign business interests, and international equity compensation, among others, can complicate property division in a California divorce case very quickly.
California is a community property state. This means that in a divorce all assets that are earned or acquired during the marriage are presumptively community property and considered to equally belong to both spouses. This includes assets located outside of the United States. In a California divorce, California’s community property rules will still apply to individuals, even if they are citizens of another country. However, enforcing a California order overseas may not always be straightforward. Understanding how foreign laws interact with California orders, can be essential to protect your financial future. Understanding how California family courts approach international property, and the practical limits of enforcing orders across borders, is essential to protecting your financial future.
Divorce in California for Foreign Nationals
You do not need to be a U.S. citizen to file for divorce in California. You simply need to meet the state’s residency requirement: at least one spouse must be living in California for six months prior to the filing, and living in the county in which they filed for divorce for at least three months.
While the divorce process itself is largely the same for citizens and non-citizens, if a spouse resides abroad, additional steps may be required. For example, proper service of divorce papers may require hiring an attorney or process server in that county to ensure compliance with California law and international service requirements.
Can California Courts Divide Property Located Abroad?
Property located outside of the United States presents jurisdiction issues. Jurisdiction refers to the authority given to a court to make legal decisions and orders. With property abroad, the question of which country’s courts have jurisdiction over the property can be complex. Often, multiple courts might have overlapping claims of jurisdiction. It is important to consult with legal counsel to ensure fair application of jurisdiction rules and understand your options to safeguard your interests.
It does not mean that the property, or the value of the property, is lost to the spouse in the United States. The court may try to achieve equitable division by awarding one spouse a share of domestically held assets that is equivalent to the value of the foreign asset outside the United States, but a deeper dive into the jurisdictional issues is often the first step to determine.
Challenges in Dividing Property Abroad
Dividing property abroad in divorce presents several unique challenges beyond jurisdiction. One major issue is full and accurate disclosure of assets. When property is held abroad, it can be more difficult to identify, verify, and value. Currency exchange fluctuations, different valuation standards, and local market volatility can all affect the true value of foreign assets. In addition, transferring ownership interests or selling international property can trigger complex and significant tax consequences. If these factors are not properly accounted for, one spouse may suffer an unintended consequence in the value of their share of the community property.
Enforcing Orders Internationally
Enforcement of California orders involving international property depends heavily on the country in which the asset is located. California orders are not automatically enforceable overseas, which is why it is important to speak with legal counsel to take the steps necessary to enforce your California order in the foreign jurisdiction. This process is generally easier in countries that participate in international treaties or agreements facilitating mutual recognition of orders.
Contact Cardwell Steigerwald Young LLP
Property division of assets located outside of the United States in a divorce case is inevitably complex. The San Francisco divorce attorneys at Cardwell Steigerwald Young LLP can provide the guidance and representation you need to fight for a fair property division outcome in your California divorce case. Contact our office today to begin working with our team.
