Thu 13 Jun 2019

Dealing with divorce and financial matters abroad

Ex-pats living abroad may love the sunshine, attractions and customs of their new life abroad, but if something goes wrong - such as a relationship breakup - they often want to use the legal systems and laws of their "home country".  Dealing with divorce and financial matters abroad may be difficult, or financially disadvantageous, or in some cases simply not possible.

For British ex-pats, there is an extra problem, in that there is no such thing as "UK law".  If you consider yourself to be a British citizen, you may not realise that there are very different legal systems within the separate parts of the UK.  In particular, for divorce and financial matters, the legal systems and outcomes in Scotland and England can be starkly different.

So what top tips should UK ex-pats in this situation look out for?

1. Consider your options

Where you can divorce depends on where you are living and also where you are "domiciled" (which means your home country).   If both spouses are resident abroad, but are living in that country temporarily, rather than having relocated for the rest of their lives, they will probably still retain a domicile somewhere in the UK.  If neither spouse is resident anywhere in Europe, then it is possible to start divorce proceedings in either Scotland or England based on the "domicile" of only one spouse.  "Domicile" for divorce is not to the UK in general, but will instead be either Scotland, England and Wales, or Northern Ireland - so this might mean that you have a choice between the English and Scottish legal systems. 

2. Act Quickly

In some cases, it can be very important to secure proceedings in the country of your choice urgently.  Even if you decide that you don’t wish to take any formal legal steps, it's best to have legal advice sooner rather than later, so that you know your options and can make an informed decision.  The issue of which court can deal with a legal matter can be extremely complicated, and so you should speak to a specialist international family lawyer as soon as possible.

3. Looking for maintenance?

In Scots law, there is a strong emphasis on achieving a clean financial break.  Maintenance after divorce is often (although not always) limited to a maximum period of 3 years, or less.    In contrast, the English courts are much more likely to order longer periods of spousal maintenance after divorce.

4. Post-separation assets?

In Scotland, the date of your separation is very important.  This is because it is that date when a "snapshot" is taken of your financial position.  The assets are also valued as at that date.  In England, it is more usual to look at a party's finances at current date, the date that either an agreement is being negotiated or the court is dealing with matters.  Accordingly, if you think there is likely to be a significant increase (or decrease) in assets after your separation, choosing either England or Scotland can make a difference.

5. Pre-marital assets

In Scots law, if a pre-marital asset remains in the same form at the end of the marriage as at the start, it is treated as non-matrimonial and is excluded from division (unless it is a property bought before the marriage for use by that couple as a family home).  The certainty of the Scottish position here contrasts with a more discretionary approach taken by the English court.  It is more usual in English cases to include pre-marital assets in the overall pot for division.

6. Inheritance

Similarly to the above, if an inherited asset remains in the same form during the course of a marriage, then it cannot be taken into account in the financial division under Scots law.  Again, the certainty of this position contrasts with a more discretionary approach under English law.

The summary of points 4, 5 and 6 is that there is, in most cases, more certainty and less discretion under Scots law - which can mean that it is quicker and cheaper to reach an overall agreement. 

7. Quick (and cheap) divorce procedure

In Scotland the grounds of divorce were altered around 10 years ago so that the irretrievable breakdown of the marriage can be proved in four ways: adultery; unreasonable behaviour; one years' separation with the consent of the other spouse; or two years' separation without that spouse's consent.  In the English courts, the consent periods remain significantly longer - two years' separation with the consent of the other spouse, or five years' separation without consent.

The divorce process itself can also be considerably cheaper in Scotland.  A simplified divorce procedure is available if financial matters are agreed, the parties are divorcing on either of the separation grounds, and there are no children under 16.  This procedure is simple and cost effective (a tick box form which can be completed by the parties themselves, plus a court charge of around £120).  It can be more difficult to use this simplified divorce procedure as an ex-pat, due to the postal service which the court wishes to use for this.  However, even if you cannot use the simplified procedure, the Scottish court charges for an ordinary divorce action are still considerably less than the equivalent English charges (£221 compared to £550).

8. Framing the Agreement

In Scotland, it also can be more straightforward to put in place an agreement in relation to financial matters.  A formal separation agreement signed by both parties (known as a "Minute of Agreement") is binding, so long as followed up by a Scottish divorce.  There is very limited scope for overturning such an Agreement.  If registered in a public register, the obligations in this Agreement can be enforced in the same way as a Court Order.  There is no need for judicial rubber stamping of these types of agreement.   In contrast, in England, to reach a final and binding settlement in relation to financial matters on divorce, this needs to be framed in a "Consent Order" which requires to be seen and approved by a court judge.

For couples living abroad, who may have links with different parts of the UK, there may be some choice as to which legal system they use to resolve matters.  If you do end up in this situation, having clear advice can help at this difficult and stressful time.

If you'd like to speak to one of our experts, please contact our Family team.

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