Challenge 1: Asset Titling and Ownership
The different treatment of forms of ownership from one country to another can yield some surprising results. It is critical to thoroughly explore even seemingly straightforward financial details during the divorce process, and is especially important to involve foreign counsel with expertise in tax and estate planning if there are non-U.S. assets or other foreign connections.
Challenge 2: Cross-Border Assets
Some of the most dramatic surprises in divorces occur when one or both spouses have trusts and/or other structures that were established in a different country than the one they're living in at the time of the divorce. Although courts in one country can enforce the legal norms of another country, there must be sufficient nexus and the result can't be contrary to public policy.
Challenge 3: Third-Party Trusts
One of the most controversial issues in divorce is how to treat assets in trusts that have been set up by third parties to benefit one or both spouses. In decisions about both property settlements and maintenance, outcomes vary from complete inclusion in the marital pot to no inclusion whatsoever.
Challenge 4: Trustee Participation
When the divorce proceedings are taking place in a country other than where the trust is based, should the trustee participate, and if so, to what extent? Does participating mean submitting to the jurisdiction of a foreign court? There are both dangers and advantages to being involved.
Challenge 5: Family Companies
In a divorce, the treatment of privately held companies is no more certain than that of trusts. The legal separation created by tiered corporate structures is not always respected when a divorce enters the picture.
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