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Tracing international assets in divorce cases

Date:21 JUN 2022

Often there will be international assets to consider in divorce cases in Scotland- but how are they dealt with and how can they be traced? Firstly, lawyers need to consider which assets form part of the matrimonial 'pot' to be divided on divorce under Scots Law.

In short, all assets owned by the couple at the date on which they separated are included. This will include heritable property, bank accounts, shares, pensions and also overseas assets, such as holiday homes. Assets owned prior to the marriage (other than a property purchased for use as a family home and the furniture within that property), inheritance and gifts from a third party are not in the 'pot'.

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How does a lawyer work out the value of what is in the 'pot' to be divided on divorce?

Typically, at the start of the divorce process there will be an exchange of financial information in order to ascertain the value of the assets. Expert valuations may be instructed if necessary. It is expected and encouraged that both parties make a full and frank disclosure.

What if there are assets held abroad?

Where there are assets held abroad, for instance a holiday home in Spain, it is likely that advice will be required in that jurisdiction in order to determine the value of that property. Furthermore, if in the case of a holiday home it is agreed that it will be sold or transferred to one spouse or the other, advice should be obtained from a lawyer to determine whether this will be possible. The law in that jurisdiction will govern the transfer/sale.

What happens if my spouse does not disclose financial information voluntarily in a divorce?

Litigation in all divorce cases is generally regarded as a last resort, not just divorces with an international element. If, however, there is a concern that there has not been a full disclosure of financial information, whether in relation to assets in Scotland or abroad, it may be necessary to raise divorce proceedings. As part of that process, the court can be asked to order the disclosure of information.

If, after going through the relevant procedures, there remains a concern that certain 'havers' (the individuals and institutions believed to hold information) have not cooperated, or have failed to disclose all relevant information, a Commission can be convened calling those havers to appear on oath before a Commissioner to confirm the extent of the documentation held by them.

What happens if these hidden assets are overseas?

The process can be complicated where assets are held overseas. The havers may fail to respond or simply refuse to cooperate. In that event a process involving a 'formal letter of request' may be required. Our team can advise further in relation to this.

What is the court's view on concealing international or domestic assets?

Parties should bear in mind that the court will take a dim view of a failure to disclose assets or any attempt to conceal assets. It is important to note that the penalties for non-disclosure of information can be severe and includes imprisonment. The court can set aside or vary any transfer of, or transaction involving, assets owned by one spouse if the court is satisfied that the transfer or transaction had the effect of, or is likely to have the effect, of defeating in whole or in part any claim by the other spouse. If there is a concern from the outset that a spouse may attempt to dissipate or hide assets, protective orders can be obtained from the court to prevent the other spouse from transacting with that particular asset or assets.

If it is discovered at a later date that one party has successfully concealed an asset, the court can set aside a previous order if it can be shown that the non-disclosure was materially prejudicial to the other party.

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