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Expat Investor : September October 2009
Which country's personal law will direct your divorce? which joined the EU only in the past few years. They have a house in England which is rented out, making a small surplus over the mortgage. They substantially increased the mortgage on Mr Expat's retirement in order to buy a comfortable villa in the war mer continental climate where they have lived for the past three years. Because of local laws at the time the villa had to be registered in a company name of their new home country. Mr Expat has a generous pension and he also received a lump sum which he placed in an offshore sterling account. Mrs Expat has an NHS and state pension. She wants a divorce and to return to England. Many of the newer EU member states have a reputation for the slowness and bureaucracy of their DIVORCE expatinvestor.com 8 EXPAT INVESTOR September/October 2009 When you become an expatriate you accept that a new country's laws will apply in your daily life. You obey local speed limits, buy property within the local legal system and so on. But you do not necessarily expect local rules to apply to your personal status, that is whether you can marry or divorce, how you would resolve dividing your assets on a divorce, where your children would live and with whom. If an expatriate couple are separating, the problem is often exacerbated by the possibility that perhaps pensions are being paid from the United Kingdom, the main property is abroad, and perhaps one party wishes to return to England. Let me give you an example. Say, Mr and Mrs Expat have moved to live on the continent, in a country The English courts could exercise jurisdiction, too, because Mr and Mrs Expat have retained their English 'domicile'. What that means is that although they are no longer English residents they have not ended their association with England. On that basis the English courts would be prepared to entertain divorce proceedings. The English courts have much more flexibility in determining an outcome. They also have quite extensive powers to enforce disclosure of assets. However, an English court order cannot operate to wind up the foreign company which of course owns the villa. This is the kind of problem I am asked to advise on day in, day out. The EU recognised the issues that arose from these cross-border problems and made a start on trying to standardise matrimonial property law across the EU. The process known as Rome III broke down completely. How do you reconcile such different stances as Malta -- which does not even permit divorce -- with Sweden, where highly equal incomes accrue to men and women regardless of marital status? It is estimated that some 15% of marriages contracted in Europe are between nationals of differing countries. In much of the US and Europe pre-marriage agreements are the norm. Will the English Courts pay attention? Many countries also require a similar for m of agreement on the purchase of property (in the US, a 'quit claim') so that if, for example, a property is purchased in one party's name, the other party renounces any claim to it. That is done as a matter of course to ensure that there is good title in the owner. What if Mr and Mrs Expat were younger? They have two children aged 10 and 8. The children have been in the English school for a year. Mr Expat has established an agency business in conjunction with a partner born and bred in the couple's new home country. Mrs Expat wants to return to England and take the children with her. Mr Expat wants the children to stay together. One might expect that in those circumstances the local continental courts should determine the issue of custody, as the children are habitually resident there, but the current waiting time for such cases is three years. In those circumstances is Mrs Expat entitled to rely on the fact that the children are British to bring them back to England and start custody proceedings in England? If she does that, though, will she be entitled to bring divorce proceedings on the continent, which seems the only place that can unravel the partnership issues courts -- and in many it is not unusual to hear talk of corruption affecting the process, to put it politely. Mrs Expat wants out from the marriage and a change of scene back to England. Where does she start? The local continental courts could exercise jurisdiction because the couple reside there. However, the family law code of their new home country provides for a rigid equal division with a maximum of six months spouse maintenance. The local lawyers Mrs Expat consults have no idea whether Mr Expat's pension can come into the calculation, or how they can find out what is in the offshore account, for the good reason that the family law code does not adequately provide for these complexities. Henry Brookman, the founding partner of specialist English and international family lawyers, Brookman, explains how expatriate divorces are affected by other countries' legal systems . between Mr Expat and his business partner? There is also another important issue as to timing. Often, jurisdiction stays in the country of 'first filing'. So a great deal depends on getting advice early, even if it is just stored in your memory for a later date. Expatriates cannot expect that there will be any quick and easy answers to these issues for a long time. Tough as it is to say it, where a marriage risks failure, expert advice must be sought early. Key points The shrinking global village syndrome means that increasingly couples have complex personal arrangements crossing different jurisdictions -- for example, property owned in one, pensions paid from another, assets and business interests held in another still -- significantly complicating issues on break-up. Be aware that this brings with it the possibility that your divorce may be governed by a non-UK jurisdiction, which may or may not be good news for you. Do what you can to understand your position well before proceedings are kicked off (whether by you, or your soon-to-be ex). Taking up the expat life means a new country's laws may apply to your 'personal' status as well as your public and business life, governing whether you can marry or divorce, the division of assets on break-up and arrangements for your children. Again, the more you understand your position before proceedings kick off, the better you can prepare and work matters to your advantage. Many of the newer EU member states have a reputation for the slowness and bureaucracy of their courts -- even for corruption. Moreover, attitudes to the appropriate division of financial assets, and to arrangements for children, can vary enormously across different jurisdictions, so making sure your divorce is governed by a jurisdiction that most suits your circumstances is absolutely key. Even more reason to be canny about issues of jurisdiction, and again the point is to prepare early. Often the jurisdiction that will govern a divorce will be determined according to where the divorce petition is first filed, so getting yours in first, ahead of your soon-to-be ex, is critical. Get advice early, well before you are ready to act: just store the advice in your memory, for when you are ready. Brookman has a reputation in the field of complex, cross-border issues involving divorce, ancillary relief and children-related matters. For further information visit www.brookman.co.uk