Going through a divorce could mean you lose some of your assets, or you may have to share what you have with your spouse. For people who own overseas assets, there could be many questions as to exactly how these need to be split up and what the rules are. Here is some information on divorce when you own assets overseas.
Assets in Ontario
When a couple divorces in Ontario, they undergo a process called Equalizing Family Property. This means they divide up property, pensions and other investments they may have acquired during their marriage.
Hidden assets
When you go through a divorce, each party must disclose all of the assets they currently own – including foreign assets. It can be appealing to try and “forget” about foreign assets – including property or investments – it is unwise, however, since it can cause bigger problems in your divorce.
Can the court force a sale?
If you own foreign property or assets, Canadian courts cannot force you to sell them, but they will count their value of them in your divorce settlement. For example, if the asset is valued at $150,000 CAD, your ex-spouse will be entitled to $75,0000 or half of the value.
If you don’t have the cash available, you may have to sell the property to get the cash to pay out your spouse – but the courts cannot force you to sell.
What happens if you don’t disclose foreign assets?
If you get caught in non-disclosure, it could be seen as a contempt of court. This could result in a fine or even some jail time depending on who the judge is and how seriously the nondisclosure is taken.
It’s always in your best interests to disclose that you have foreign assets, even if it means you’ll have to pay out your ex.
You cannot use location as a defence.
Depending on the country the foreign asset is located in, it can be challenging to track down the correct paperwork or official documentation to prove what the asset is worth.
This, however, is no excuse for not properly disclosing the foreign assets you own or their worth. Even if you disclose them but do not accurately convey their value, it could still be seen as contempt of court. You need to provide an accurate value as to what they are worth to be included in your divorce settlement.
What if you have a pre-nuptial agreement?
If you have a pre-nuptial agreement with your spouse, then your divorce proceedings will follow whatever is outlined in that agreement as opposed to the 50/50 split that most divorces will have to follow.
If you have questions about what your agreement covers, it is best to have your lawyer review it and advise you about your responsibilities in the divorce. Make sure you know your duties for disclosing assets and investments before making a legal statement, as this could cost you a lot in terms of financial penalties if the courts discover you were not honest.
Contact Marcy Segal today.
If you are in the process of a divorce, it is best to work with an experienced family lawyer who can help you with the process, including division of assets. Contact me today for a consultation.