Disclosure and characterization of overseas assets in divorce

Disclosure and characterization of overseas assets in divorce

IN a divorce proceeding, people sometimes have a misconception that the only assets or properties that have to disclose assets and properties situated in California. Even worst, sometimes parties even think that since an asset or property is situated in a different country or state, that property is not community property and not subject to division in California family court.   One has to understand the general community property presumption in California.  Property acquired before marriage is the acquiring spouse’s separate property, as is property obtained during marriage that can be traced to a premarital acquisition. Family.Code. § 770(a).  Rents, issues and profits” of separate property are separate property.  All property acquired during marriage and before separation, other than by gift or inheritance, is presumptively community property. Family Code §§ 760, 771(a), 772; Marriage of Bonds (2000) 24 C4th 1, 12, 99 CR2d 252, 258; Marriage of Lehman (1998) 18 C4th 169, 177, 74 CR2d 825, 828.

Pursuant to Family.Code. § 760, community personal or real property is consistently defined no matter where situated.   Family Code §760 defines “Community property” as  “Except as otherwise provided by statute, all property, real or personal, wherever situated, acquired by a married person during the marriage while domiciled in this state is community property.”  As such, out-of-state community property is community property for all purposes, including intraspousal management and control fiduciary obligations.  It does not matter if the property is located in another state or another country.

For the same reason, the parties to a divorce case is required to disclose all property, separate and community, including those outside the state.  During the marriage,  the parties’ fiduciary duties require full and accurate disclosure of true and full information affecting community property transactions. FamilyCode. §§ 721(b), 1100(e).  In addition,

disclosure duties arise upon separation in anticipation of dissolution, nullity or legal separation. The post-separation disclosure duties extend to all assets and liabilities in which either party has or may have an interest or obligation, regardless of community or separate property characterization, and to current earnings, accumulations and expenses. These duties “arise without reference to any wrongdoing.” Family.Code. §§ 721(b), 2100(c), 2102(a)(1); Marriage of Feldman (2007) 153 CA4th 1470, 1475–1476, 64 CR3d 29, 33; Marriage of Brewer & Federici (2001) 93 CA4th 1334, 1342–1344, 113 CR2d 849, 854–855.  Parties to a divorce case has a duty to provide full and accurate disclosure of all assets and debts including those in other states and other countries.  Failure to disclose could result to certain legal consequences to the non-disclosing parties including sanctions and attorney’s fees.  If you are contemplating a divorce and you own assets and properties outside the state or country, its best to retain the representation of an experience family law attorney.

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Please note that this article is not legal advice and is not intended as legal advice.  The article is intended to provide only general, non-specific legal information.  This article is not intended to cover all the issues related to the topic discussed.  The specific facts that apply to your matter may make the outcome different than would be anticipated by you.  This article does create any attorney client relationship between you and the Law Offices of Kenneth U. Reyes, P.C.  This article is not a solicitation.

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Attorney Kenneth Ursua Reyes is a Certified Family Law Specialist.  He was President of the Philippine American Bar Association.  He is a member of both the Family law section and Immigration law section of the Los Angeles County Bar Association.  He has extensive CPA experience prior to law practice. LAW OFFICES OF KENNETH REYES, P.C. is located at 3699 Wilshire Blvd., Suite 747, Los Angeles, CA, 90010.  Tel. (213) 388-1611 or e-mail kureyeslaw@gmail.com or visit our website at Kenreyeslaw.com.

 

 

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