How are overseas assets treated?
Couples with property, family, or business interests in more than one country face questions a standard form does not reach. A California agreement can address those assets, within limits that should be understood at the outset.
Foreign property is still disclosed and still addressed
California's community property rules can apply to property acquired during marriage regardless of where that property is located. Real estate in another country, an account held abroad, or shares in a foreign company are all within the scope of what an agreement should address.
Clients sometimes assume that assets outside the United States are outside the analysis. That assumption is the source of a good deal of later difficulty, both because the assets are in fact relevant and because omitting them weakens the disclosure the agreement depends on.
Recurring cross-border issues
- Real property held in another country, and how title is recorded there
- Accounts and investments held outside the United States
- Interests in foreign companies and family enterprises
- Gifts and transfers from family members abroad
- Expected inheritances under another country's law
- Currency, valuation dates, and exchange-rate movement
- Couples who live and work between two countries
Family gifts deserve particular care. Money transferred from parents abroad to help buy a home may be intended as a gift to one spouse, a gift to both, or a loan. Which of those it is can determine ownership of a substantial asset, and it is far easier to record the intention at the time than to reconstruct it later.
What a California agreement can and cannot do
A California agreement is prepared under California law and is intended to govern the parties' rights as a California court would determine them. Whether another country's courts or registries will give the same effect to that agreement is a separate question, governed by that country's law.
No agreement should be presented as automatically enforceable everywhere the parties hold property. Where significant assets sit in another jurisdiction, the sound approach is to have the agreement reviewed by counsel qualified in that jurisdiction, and to consider whether a parallel or complementary document is appropriate there.
Choice-of-law and forum provisions are commonly included, and they matter. They do not, however, guarantee that a foreign tribunal will apply the chosen law to property located within its own jurisdiction.
This article provides general information about California law and does not constitute legal advice. Every matter depends on its own facts. Consult an attorney about your circumstances.