As business owners, executives, investors, and professionals become more globally connected, it is not uncommon for families in Central Texas to possess significant international wealth. You may find yourself asking, “How are international and offshore assets handled in a Texas divorce?” The answer depends on many factors, including the type of assets you own, where they are located, how they were acquired, and whether the assets are considered community or separate property.
Choose The Law Office of Ben Carrasco, PLLC
The Law Office of Ben Carrasco, PLLC, handles many complex property disputes involving sizable marital estates, including those with:
- Commercial interests
- Accounts for investments
- Executive remuneration
- Assets spread across several jurisdictions
Ben Carrasco offers clients immediate legal access throughout their cases. He is board-certified in family law and earned his law degree from Stanford. We are dedicated to practicing family law and have extensive experience with high-net-worth divorce cases. We thoroughly examine complex financial situations in all our divorce cases.
What Qualifies as an International or Offshore Asset?
The terms “international assets” and “offshore assets” can be used to describe any property or assets located outside the United States or in a foreign financial institution. Anything held outside the U.S. is considered an international asset. However, offshore assets, specifically, tend to imply holdings placed in foreign jurisdictions for investment, commercial, tax, or protection reasons. These include, but are not limited to:
- International bank accounts
- Foreign investment accounts
- Vacation homes
- Foreign rental properties
- Overseas business holdings
- Offshore trusts
- International partnerships
- Foreign retirement accounts
Keep in mind that the mere location of an asset does not determine whether it is divisible by the court. Instead, Texas courts care more about who owns the asset and how it is characterized. U.S. taxpayers have around $4 trillion in international financial accounts, according to a study that used data from the international Account Tax Compliance Act (FATCA). In particular, overseas accounts are owned by almost 60% of those in the top 0.01% of the income distribution.
Texas Community Property Laws Apply to Foreign Assets
Texas community property divorce laws apply to all property unless it is properly characterized as separate property, including international assets.
Texas Family Code § 3.002 creates a presumption that any property acquired during the marriage is community property. Once a court determines that an asset is community property, Texas Family Code § 7.001 directs the court to divide the property in a just and right manner. Therefore, the court may divide international assets just like any other asset in Texas.
Exceptions to this general rule occur when assets are placed in offshore banks or foreign countries to hide them from the court during divorce. If you suspect your spouse of hiding assets, speak with your Texas property division attorney about possible remedies.
Disclosure Requirements in International Asset Cases
All assets and debts should be disclosed in Texas divorce cases. This requirement applies to domestic assets as well as international assets. Foreign accounts, international investments, and overseas properties may be disclosed in:
- Tax returns
- Bank statements
- Business records
- Investment accounts
- Real estate holdings
- Trust documents
In situations involving significant wealth and intricate divorce proceedings, your lawyer needs to meticulously examine financial records for undisclosed assets. Even if your spouse fails to turn over the names of offshore bank accounts, international transactions may be traced and identified through business dealings, investment statements, and income deductions.
Hire a Property Division Lawyer
Many people don’t realize that international assets can complicate their divorce. Not only do you have to identify and value your share of the asset, but you may also need forensic accountants and foreign translators to review financial records.
If your divorce involves international property, hire a property division lawyer who is experienced in high-asset cases. Your attorney can:
- Identify which assets are subject to division.
- Work with forensic professionals to uncover hidden assets.
- Review how Texas property division laws apply to assets held in other countries.
International divorce cases in Austin are litigated in the Travis County Civil and Family Courts Facility at 1700 Guadalupe Street, Austin, TX 78701. Depending on where you live, your case may be filed in Williamson or Hays County.
FAQs
Are Foreign Pensions or Retirement Plans Considered in a Texas Divorce?
Yes, foreign pension and retirement plans can be considered in a Texas divorce. Retirement benefits that are earned through employment outside the United States can be valued and determined if they are part of the marital estate, depending on when the benefits were earned and what laws govern the plan. Plan documents and any international legal or administrative issues may need to be considered.
What If a Spouse Owns Property in More Than One Foreign Country?
International or multi-state holdings may further complicate the division of property. Other states and countries may have different laws regarding property holdings, taxes, and transfers. While the court in Texas may take into consideration the total value of these holdings, you may need to do additional work to obtain paperwork and complete an asset transfer, depending on the location of the property.
Can Dual Citizenship Affect Property Division in Texas?
Dual citizenship does not automatically dictate how property may be divided. In most cases, Texas courts apply Texas law if they have jurisdiction to hear the divorce. Citizenship could matter, however, if it alters:
- Ownership rights
- Accessibility to foreign property
- Inheritance laws or legal proceedings regarding property located in a foreign country
Can International Asset Issues Make the Divorce Process Longer?
Yes, international assets can make the divorce process longer. Collecting records from overseas banks, getting appraisals, translating documents, or dealing with international legal concerns can prolong a divorce timeline. It can take several months more, depending on how many international assets you have and how complex your marital estate is.
Explore Your Options
If you have international and offshore assets, these can become complicated in a divorce. However, The Law Office of Ben Carrasco, PLLC, can help you with this legal process and alleviate its complexities. Contact us today for a consultation.
