International divorces can be complex and when a shared business is brought into the equation this complexity can heighten. Perhaps your business is based overseas or your former spouse has moved abroad. There are many different circumstances surrounding an international divorce. In all cases, it is wise to speak to an experienced family law specialist knowledgeable and experienced in overseas cases. In this article, we look at some of the key details involved when divorcing with a shared business.
One of the first considerations you will need to make is which country you should divorce in. Every country has its own jurisdictions and laws, with one country offering a potentially more favorable outcome for you than another. For example, assets will be divided differently in different countries. Consider carefully your own unique position and the details of the business before you apply for your divorce. Divorcing in England is typically the most common route. That is provided you can demonstrate legitimate links to the country.
In England, Wales, and Northern Ireland, your business will usually be considered a matrimonial asset during a financial settlement. This is whether or not your spouse was involved in it. The law is different in Scotland where businesses will only count if they were acquired after you were married.
The greater the business involvement from your spouse, the more likely they will have a valid claim against it in a divorce. There can be exceptions, for example, if you have a prenuptial agreement stating that the business is a separate entity, the courts can bring this into consideration. But bear in mind this will depend on the jurisdiction where you are applying for your divorce. Although you have a shared business, the division of it will depend on other factors. Consider how long you were married to your spouse, the needs of any children, earning potential, and healthcare.
If you own a business overseas you will be required to provide full financial disclosure. It’s important to prepare accurate financial records which you may want to have examined by a UK accountant. This information is likely to be scrutinized by your spouse’s legal team so make sure it’s truthful and comprehensive. Sometimes, the courts may ask for a third-party disclosure order to which you must respond with accurate and honest details. If the documents are not written in English you may need to get them translated.
If you were married to a business owner and believe some of the business assets may be outside of the UK, then it’s advisable to act swiftly but not hastily. For instance, if business assets are frozen to protect a possible claim, this can have a detrimental impact on the company potentially reducing its final value. Thus, in turn, affecting your settlement figure. Again, a professional or forensic accountant can help you when assessing the information your spouse has provided to help you work out your next steps.
Hiding assets abroad or otherwise are not looked on favorably by the courts. They have the power to penalize anyone who is doing so resulting in significant consequences. For example, they may order that a final settlement is reduced. Or, that the legal fees of the other spouse are paid for by the party concealing assets. Appointing professional services experts like accountants and solicitors for advice in your international divorce is often key in determining a successful outcome.