International holdings may include real estate, offshore bank accounts, global investment portfolios and retirement accounts. These holdings can add layers of complexity to California divorces.
For example, the division of assets may take longer due to issues with valuation or taxes.
1. Challenges in valuation
Valuing assets is a major part of divorces. Assets extending beyond California’s borders add more wrinkles. They often require a thorough appraisal to determine their true worth.
Varied currency values and fluctuating market conditions contribute to the challenges. Differing regulatory environments do as well.
2. Jurisdictional quandaries
California follows community property laws. In other words, assets acquired during the marriage are typically communal. The state ranks seventh in the United States for its percentage of millionaire households, and many of these households have international holdings of some sort.
However, the holdings may fall under the jurisdiction of foreign legal systems. This introduces potential conflicts in the application of community property principles.
3. Tax implications
Transferring ownership or liquidating assets in other countries may trigger tax liabilities in both California and the foreign jurisdiction. It is not always straightforward to navigate tax laws.
4. Division across borders
Even with a fair settlement, enforcing the division of international holdings can be challenging. Legal systems and enforcement mechanisms differ globally. This raises questions about the enforceability of court orders and the practicality of asset transfers between countries.
The expertise of financial professionals, including accountants and international legal consultants, becomes important. Their insights can provide a comprehensive understanding of the global financial landscape.
International holdings in California high-asset divorces introduce many challenges. Navigating these issues requires a thorough understanding of both California family law and the complexities of managing assets on a global scale.