Untangling Wealth Across Borders: Navigating High-Net-Worth Divorces in a Globalized World
Untangling a marriage is rarely an easy task. Complexities around finances, emotions, and child custody are all at play in what is frequently a highly fraught divorce process. In cases involving high-net-worth couples, these dynamics are compounded by the challenges of wealth that spans borders and legal jurisdictions.
I have been handling complex divorces for more than 40 years, and during that time, I have learned one thing about wealth: it moves. It crosses state lines and borders and includes accounts, companies, and real estate holdings in countries that do not share our legal framework, disclosure rules, or need for transparency. When a marriage ends and that wealth needs to be divided, dealing with cross-border issues ups the ante for the attorneys and their teams of forensic accountants, who are all working to achieve a fair settlement.
When international divorce cases come across my desk, I can tell you honestly, they are both the most interesting work I do and, at times, the most frustrating. Those two things are not mutually exclusive.
Global Challenges Necessitate Global Expertise
The moment a client tells me their divorce involves assets, property, or children across an international border, my response is always the same: we will need to bring in lawyers across jurisdictions. The U.S. court may or may not have jurisdiction over assets held abroad, and even when it does, enforcement in another country requires working through that country's own legal mechanisms. There is no shortcut around this. Whether we are dealing with property in Turkey, custody complications in France, or bank accounts in the Cayman Islands, the best strategy is to tap into the knowledge of counsel who actually practice in those jurisdictions. These attorneys will run point on their home turf, while the lead counsel coordinates the overall approach.
Having worked with co-counsel from Britain, Canada, France, and many other countries, I can attest that coordinating across multiple foreign jurisdictions simultaneously is neither simple nor inexpensive. The fact of the matter is, there is genuinely no substitute for having someone on the ground, figuratively speaking, who knows the local rules, the local courts, and the local culture of litigation.
The Hunt for Assets Knows No Borders
One of the questions I am asked most often by clients in these situations is: What if my spouse has money overseas that they are not disclosing? In an earlier era, international investigators were frequently employed to locate hidden foreign assets. That approach is costly and difficult to execute. Today, there are far more digital forensic tools that make searching easier. The process starts with clients sharing information about their assets and providing documentation, such as account statements, general ledgers, and title records, to the legal team. From there, a forensic accountant, who should absolutely be part of any international divorce team, will attempt to trace money from one account to another, even across borders. The financial trail does not disappear simply because it crosses a line on a map. It just requires the right expertise to follow it. But it is not easy, and it is expensive.
The asset category that is most difficult to uncover and track right now is cryptocurrency. Foreign bank accounts in places like Luxembourg, the Cayman Islands, or Switzerland were once the classic tool of choice for concealment. Fortunately, the laws governing many of those jurisdictions have changed considerably, making it harder for a recalcitrant spouse to squirrel away assets. Cryptocurrency is a different matter. It is harder to locate, harder to value, and harder to divide. A good forensic accountant is invaluable when it comes to ferreting out tricky assets such as these.
Searching for a Favorable Jurisdiction
Where a divorce case is filed matters when the spouses may be able to claim residence in different states or even different countries. This is called forum or jurisdiction shopping. The reason this makes a difference is that filing in certain countries can be significantly more advantageous to one party. Some jurisdictions offer less in the way of spousal support. Some countries are not signatories to the Hague Convention on matters involving children. Some offer no reciprocity and no meaningful means to enforce orders favoring the other party.
My position is that there is nothing ethically wrong with identifying the most favorable jurisdiction for your client, provided your client genuinely meets the residency requirements. In California, where I practice, that means six months of state residency and three months in the filing county. I once spent a lengthy intake interview carefully working through whether a client with multiple homes could legitimately establish California residency. This analysis matters. What is not acceptable is filing in a jurisdiction where the residency requirements are not actually met. I explain to my clients that there is a fine line between smart strategy and misrepresentation. And responsible attorneys will always stay on the right side of that line.
When the Rules Simply Do Not Apply
When clients come to a lawyer, there is usually an expectation that the law will dictate how the divorce will proceed. However, this is not always the case. Nothing prepares a client for the moment they discover that the legal mechanisms they assumed were universal, including depositions, subpoenas, and sworn discovery, simply do not function in another country. China is the clearest example I can offer from my own experience. You cannot take a deposition in China or propound any discovery (interrogatories, request for admissions, document production, etc.) where the responding party must respond under penalty of perjury. During the COVID-19 pandemic, I handled a matter in which my client, who primarily resided in China, was unable to leave the country. The other side could, therefore, not depose him until he could leave the country and be deposed in the United States, England, Macao, or Hong Kong. We had to wait. There was no other option until restrictions eased sufficiently to make travel possible.
Once restrictions were lifted, his deposition could be taken outside of China. What made it more complicated was that the company in question would not produce documents voluntarily, and there was no legal mechanism to force them.
The takeaway here is not to assume that American litigation norms are global. They often are not. The only real solution is having lawyers in those countries who can tell you exactly what the rules are and what the workarounds are when the rules are not working in your favor.
Assembling the Right Team Is Key
International challenges highlight the importance of assembling the right team. The three things I tell clients who are navigating an international divorce are: First, you need lawyers in the relevant jurisdictions. Second, you may need financial professionals, including forensic accountants, in those jurisdictions. Third, all of those people around the globe need to function as a coordinated team.
Managing that team well is a discipline in itself. My approach is to hold lawyer-only strategy sessions first, develop a streamlined plan, and then bring the client into fewer, more focused meetings with clear written recommendations. No client should be fielding calls from attorneys in three time zones without a strong filtering mechanism in place. The goal is a single integrated strategy, executed by the right people in the right places, with the client's interests at the center of every decision.
International divorce at this level of complexity is demanding and expensive. But a well-assembled, well-coordinated team is the most effective protection a client has, and in my experience, it is the only approach that actually works.
Please note: The content and views expressed here are my own and do not reflect or represent the positions, strategies, views, or opinions of Blank Rome LLP.