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8

Feb 2013

Overseas assets and relationship breakdown

In Europe alone, there are around 16 million "international" couples with assets, such as property or a bank account, in more than one country. These couples face legal uncertainties and extra costs when dividing their property in cases of divorce, legal separation or death. At present, it is very difficult for international couples to know which courts have jurisdiction and which laws apply to their personal situation and their property. Rules vary greatly between countries and sometimes lead to conflicting situations.

Legal differences between the EU Member States can create an incentive for "forum shopping" or a "rush to the court." This happens when one spouse, usually the wealthier one, rushes to a court where he or she thinks the outcome will be the most beneficial.

Last year the European Commission proposed new EU-wide rules to bring legal clarity to the property rights for married international couples and for registered partnerships with an international dimension. The proposed regulations would help identify which law applies to a couple's property rights and the responsible court. The regulations also provide for rules for recognising and enforcing court judgments on a couple's property in all EU Member States through a single procedure.

The Commission is proposing two separate regulations: one to implement the rules for married couples and the other for registered partnerships.

The Commission's proposals aim to:

  • Enable married international couples to choose the law that applies to their joint property in case of death or divorce;
  • Enhance legal certainty for registered partnerships with an international dimension by submitting the assets of registered partnerships, as a rule, to the law of the country where the partnership was registered;
  • Bring legal certainty for international couples (married or in registered partnerships) through a coherent set of rules to identify which country's court is responsible and which law will apply, based on a hierarchy of objective connecting factors;
  • Increase predictability for international couples by smoothing out the process for recognising judgments, decisions and deeds throughout the EU.

Vice-President Viviane Reding, the EU’s Justice Commissioner said, "As more and more citizens fall in love and then marry or create partnerships across borders, we need clear rules to decide how joint property is divided in case of death or divorce."

Until these proposals are implemented, the situation remains complex so it is important to take advice from an experienced family solicitor.

For more information please contact Paul Antoniou

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