Divorce with cross-border assets for Immigrants

One-third of the Australian is the first generation or the decedents of first-generation immigrants. Many families have an international tie such as the spouses may be of different nationalities, or both may have relocated abroad or lived in a sequence of different countries as expats, or they may own assets in more than one country.

If one or both parties in family relationship considers that their relationship has irretrievably broken down, then thoughts will eventually turn to the practical implications of a divorce, even maybe a divorce with cross-border assets issue.

Divorce with cross-border assets is a complex and highly specialised area of law. It is essential to take bespoke fact-specific legal advice at the earliest opportunity for the best resolution. Generally, you need to start with these questions:

Where to divorce?

How to divorce?

What financial or/and child settlement to achieve?

When thinking of divorce, you don’t necessarily divorce in the country where you reside. There is often a choice of countries which would accept your application for divorce. An inaccurate jurisdiction plea in a divorce petition can have a detrimental effect on you and your child.

Your choice of place for divorce should have considered the followings:

The law in a jurisdiction dictates the results

Divorce in one jurisdiction may result in a vastly different financial outcome from a divorce in another, because the law in each jurisdiction dictates the results.

By way of example: If a divorce took place in the courts of China the prenuptial or marriage agreement is followed regardless of parties situation. By way of contrast, in the court of Australia, the courts have a very wide discretion to redistribute assets and income regardless of the source or strict legal ownership.

Another example: Adultery is the ground for divorce in the country like China but not in Australia. The party committed adultery might bear the stigma of immorality which could cause the loss of financial bargaining power in the divorce settlement.

Divorce with cross-border assets will largely affected by the law of jurisdiction location.

Divorce recognition and its enforceability

In choosing the country for your divorce you must consider how the divorce settlement is enforced.

The recognition of a court order from a foreign jurisdiction is a complex area. For example, the Australian divorce absolute might be recognised in China only when the defendant has been notified by the court before proceeding. Chinese courts do not recognise any financial settlement order from the court of the foreign country.

Divorcing at the place where most of the assets are located is crucial. This could avoid the enforcement difficulties if you have a dispute of the asset or income with your partner.

Although there is a possibility to bring a debt claim in another country where most asset located when the divorce settlement order is not enforceable, you must contact our specialist for specific advice.

Other interests in divorce affected by location

Often the financial aspects of a divorce are just one element of the overall divorce settlement. Additional competing factors must be weighed against each other when choosing the place for your divorce.

Some of those factors are strictly legal, other non-legal but equally valid factors may be at play. For example, the parties may simply prefer to proceed in Australia jurisdiction because Australia is notoriously known as the ‘divorce capital’ of the world, as a result of the generous financial awards made for wives, including lengthy periods of spousal support.

Sometimes the proceeding of divorce may affect the visa status of the other party if you choose the wrong jurisdiction to divorce. You don’t want your spouse to end up losing the visa rights when you have a child involved.

It depends on where the divorce is filed and whether the divorce petition is in disputes. For example:

In Australia

If a divorce petition is not defended, then obtaining a divorce is a paper-based exercise which a Judge will deal with without the attendance of either party.

If your spouse does contest / defend the divorce petition it is usually following negotiations.

In the event you and your spouse cannot reach an agreement, then you may both need to attend court for the purposes of giving evidences. Following evidence and legal argument, the Judge will decide if the divorce can proceed.

In China

In China, even you were married yesterday, you are entitled to apply for divorce today without attending to the court, provided both parties agree to the divorce and there are no children involved.

The tricky part of divorcing in China comes where the divorce is against the will of either spouse. The Chinses court will have a short hearing and encourage self-negotiation which requires the attendance the court. Only when the negotiation fails, the divorce may be granted with or without your presence in the court.

When there is assets or child custody involved, you must attend the court for hearing if you don’t want to be disadvantaged. China is not the signatory country of Hague Convention on the Civil Aspects of International Child Abduction,  you have no protection from kidnapping child by one party. The court is not particularly friendly with a foreigner when it comes to the split assets.

A very important consideration in divorce is how the matrimonial finances should be split and how the child support is arranged.

When there is a dispute between the two parties with different nationality, it will become very difficult.

Ideally, you and your spouse try to reach a financial /child settlement outside of court. If it is not possible you may have to issue a court application for financial remedy proceedings. The child support issues are dealt with differently in each country，some country by child support agency, some country by a court, nevertheless, a divorce with cross-border issues will make the process more complicated.

Financial settlements

The general principles for a court to settle financial disputes in Australia are based on:

• Working out your assets and liabilities, including real estate, motor vehicles, household items, cash, investments and other assets; and any debts you owe, including mortgages, car loans, personal loans, credit card debt and other debts.
• Looking at the contributions made by both parties during the marriage or relationship including wages and salaries, gifts and inheritance, and contributions to the welfare of the family, such as in the role of parent and homemaker.
• The future needs of the parties consdering things such as age, health, care of children, income and financial resources of the parties

At the Final Hearing in court, The Judge concentrates on the available assets and income, the needs of both parties and any children and how the assets and income can be used fairly to meet those needs.

In the other country, the financial settlement could be very different.

For example, correctly drafted prenuptial agreements or marital agreements will be followed by the court of China. Where the parties do not have a prenuptial or marital agreement, the Chinese court will generally respect a mutual agreement in relation to family assets and maintenance that has been reached between the parties. If an agreement cannot be reached, the Chinese courts will impose orders to divide assets, provide maintenance for any children, and set out arrangements for the children’s care.

Child support

In Australia, the child support issues are most likely dealt with by child support agency (Department of human services) or by court if the child is over 18 years old.

The primary considerations when deciding on parenting arrangements in Australia include:

• The benefit to children of having a meaningful relationship with both parents.
• The need to protect the child from physical or psychological harm from being subjected to, or exposed to, abuse, neglect or family violence.

In China, the main principle followed by courts is that the ‘children’ best interests’ must be taken in to account. With the contested divorce proceeding, parents are required to file evidence in support of their application for child custody. The child support issues in China are mostly dealt with by the court.

We advise immigrants on family issues and assets protection with practical expertise on multinational jurisdiction rules, divorce strategies, Court order enforcement on other countries.