This is part 3 of a series of blogs focusing on the particular issues caused by expat divorce, for Scottish and English nationals. This week I'd like to look at some of the particular financial issues which may face those couples living abroad.
When looking at financial issues, the first question is "what is in the pot"? You and your legal adviser will need a clear answer to that question before assessing what a fair division would be. The Scottish or English courts will take full account of any assets based abroad - but the difficulty can be locating or valuing them. If a spouse is reluctant to make full disclosure of assets located in the UK, he or she can be forced to do so via Court order - for example, in Scotland, there is a process whereby a bank can be ordered by the court to produce details of any Scottish bank accounts held by a particular person. Where the assets are based abroad, the procedure for finding out what there is can be much more complex and time-consuming - or, in some cases and some countries, nigh on impossible. It is best to have a clear overview of the various assets in your joint and sole names, before separation, and also to know how those assets are held - can your spouse remove or tie up substantial assets without your knowledge or consent?
Compensating for disadvantage
As I have mentioned in a previous blog, it is often the case that the move abroad has been driven by one spouse's career. The other spouse may have sacrificed their own promising career back home in order to relocate, and may have been unable to work following the move due to visa restrictions. Such a spouse can find themselves in a disadvantaged situation after a separation, having suffered a loss of career, recent work experience and pension contributions. How can this be taken into account?
In terms of Scots law, a means to do so may be available under section 9(1)(b) of the Family Law (Scotland) Act 1985. This provides that “fair account should be taken of any economic advantage derived by either party from contributions by the other, and of any economic disadvantage suffered by either party in the interests of the other party or of the family”. This principle can be used to justify a greater share of the matrimonial assets to the disadvantaged spouse.
Unfortunately, even after you have an agreement or court order regulating your financial situation, your problems might not be at an end. The Scottish or English Court can make orders regarding foreign assets. Whether those orders can effectively be enforced abroad is quite another issue, and often depends upon local laws and procedures, which can (again) be expensive and time-consuming. This arises with assets frequently held by UK residents – such as a holiday villa in the sun, in Spain or Portugal. A carefully structured agreement is often preferable, working together with reliable local lawyers as necessary, in order to avoid an unenforceable (and so worthless) court order.