A high-asset divorce in Texas has the potential to be costly and complex because the division of marital assets can be a major challenge to unwind. This is especially true when the divorce involves foreign assets with different jurisdictions due to national borders.
Divorce with foreign assets
Rules about community property and how assets like houses are inherited can vary widely from nation to nation. For example, in some countries, an ex-spouse will inherit their ex’s house by default; in others, the title will not pass to the ex automatically.
One of the major tools that couples use to preserve wealth and carry out important tasks like estate planning is trusts. A trust can help reduce future taxes or provide other benefits. However, when a couple forms a trust in one country and later gets divorced in another country, the results can be hard to predict. The divorce court may or may not follow the intent of the trust in applying the home or foreign country’s rules to how assets in the trust should be divided and any tax implications.
This is a major risk for any couples who are facing the prospect of a divorce and have assets like houses, trusts or bank accounts located in different countries. While judges often try to apply common-sense approaches to resolving the conflict in jurisdictions, the results sometimes don’t line up with what the parties expect. It can also take longer to work out the outcome, which means more costs due to lawyer fees as well as more time in the court process itself.
High-net-worth couples who are facing the prospect of divorce should expect to spend more time working out these complications. It’s worth taking time on these matters to ensure that each spouse walks away with their fair share of assets.