Is my wife able to access my money held in a foreign country? That was a question posed on a webinar that we ran recently. The gentleman in question had inherited assets in Australia and wanted to know if his wife was able to access these foreign assets as part of their divorce financial settlement.
How are finances split during a divorce?
When it comes to separating couples, divorce is the legal ending of the marriage or the partnership. Finances are dealt with by something different called a consent order. An order is an instruction from the court to do something. A consent order is a financial agreement between the couple that has been approved and is now instructed by the court, making your agreement legally binding. It is the only way your financial agreement can be made legally binding, and you cannot change it without further agreement from both sides.
The consent order describes how you will share your assets and liabilities. It can cover things like selling the former family home and splitting the proceeds, lump sum payments, property transfers and pension sharing, amongst other things.
How does a court approve a consent order?
For the court to approve a consent order, you and your ex-spouse must complete a D81 Statement of Information that provides an overview of your current financial situation. Your financial disclosure for a consent order (as opposed to a financial remedy order – more about this later) doesn’t have to be incredibly detailed. Instead, you both provide headlines figures of:
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- Any equity you have in properties (what you would have left if you sold your house and paid back the outstanding mortgage, legal costs and selling expenses),
- The total value of your savings and investments that you’ve got,
- The total value of your pensions,
- The total amount of (non-mortgage) debt you have, and
- Your monthly income.
When the court reviews your proposed consent order, they look at the financial information you gave to decide whether the agreement is fair. For example, a situation where one party had all of the assets and the other had none following divorce is unlikely to be considered fair in most situations – for more detail about how a court considers consent orders read our article here.
Having visibility of your assets and liabilities makes sense for you too. You need to know what you have to make an informed decision on how the assets should be split. Once you know your numbers, it makes it easier to work out how to share them.
How does a court view foreign assets in a financial divorce settlement?
So back to the question. Can Mike’s (not his real name) wife access his foreign assets held in Australia as part of their divorce settlement? The short answer is yes. The court is clear: foreign assets are considered in the same way as those held in the UK and can be divided similarly. It doesn’t matter where you have assets; they should always be included in the D81 Statement of information.
What happens if my husband or wife withholds financial information?
So what happens if your husband or wife withholds information about assets held? What if Mike refuses to tell his wife about the assets in Australia? Or he refuses to tell her the value, telling her that they are not part of the settlement?
If anyone applying for a consent order deliberately withholds information about the assets they own, foreign or otherwise, it could make the consent order voidable, and they could be prosecuted for fraud.
Suppose a court rules that the consent order is void. You are back to square one – you’ve lost all of the consent order’s benefits and protection and are again open to future financial claims – that pension you agreed to leave is now on the table. And if you’ve received an inheritance or bought a new house – that’s back in the mix too.
This is why it’s important not to withhold financial information because if you do, you’re exposed and at risk of a new negotiation, including your future assets.
Another point is that a consent order, by definition, is by consent. Both parties agree to it. If you can’t agree over your finances, then your only solution if mediation has failed is to go to court, and a judge will decide for you. This is known as a financial remedy order.
In this situation, a court can force you to disclose the information. So, if Mike’s wife knows he’s got funds in Australia, but he won’t tell her the value, she can ask the court to force him to disclose this information.
Is a court order money judgement enforceable in a foreign country?
Suppose that the court orders Mike to give his wife half the value of the property he owns in Australia. But Australia is a long way, right? What happens if Mike elopes without paying his wife? Has she lost her money? Not necessarily. A money judgment in the UK is recognised and can be enforced in many countries the UK has agreements with, such as the EU, the US, and the commonwealth countries, including Australia.
For more information about consent orders visit our page here, call 0204 586 6111 or book a free consultation with one of our friendly advisers.
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