Attorney
Dividing assets in a Maryland divorce becomes even more complex when foreign property, bank accounts, or investments are involved. Maryland follows the equitable distribution model, meaning marital assets are divided fairly but not necessarily equally under Md. Code Ann., Family Law § 8-205.
Maryland courts include all marital property, regardless of location, in the division process. However, they cannot directly transfer title to foreign property due to jurisdictional limitations. Instead, they use monetary awards to balance the division, ensuring each spouse receives a fair share of the marital estate.
How Maryland Courts Handle Overseas Assets
Marital vs. Separate Property
Maryland law classifies property as:
- Marital Property – Assets acquired during the marriage (except gifts or inheritances).
- Separate Property – Assets owned before marriage or received as a gift/inheritance.
- Hybrid Property – A mix of both, such as a home purchased before marriage but paid off with marital funds.
Foreign assets are not exempt from division if they were acquired during the marriage using marital funds.
Challenges in Dividing Overseas Assets
1. Valuation Difficulties
Determining the fair market value of foreign property can be complex due to currency exchange rates, foreign appraisal standards, and lack of access to accurate financial records. Courts require credible valuation evidence, which may involve hiring experts familiar with the foreign market.
2. Jurisdictional Limits
Maryland courts have authority over the spouses but not over foreign governments. While a judge can order a spouse to transfer property or assets, enforcement may be difficult if the foreign country does not recognize U.S. court orders.
3. Enforcing Maryland Court Orders Abroad
If a spouse refuses to comply with a court-ordered transfer of foreign assets, Maryland courts may:
- Issue a monetary award to compensate the other spouse.
- Impose liens, wage garnishments, or asset seizures on domestic property.
- Hold the non-compliant spouse in contempt, leading to fines or penalties.
4. Hidden or Concealed Foreign Assets
Some spouses attempt to hide assets abroad to shield them from division. Maryland courts require full financial disclosure, and forensic accountants can track offshore transactions. Courts may impose sanctions or an uneven distribution of assets if a spouse fails to disclose foreign property.
Using Discovery and Depositions to Uncover Hidden Assets
Maryland law provides legal tools to compel a spouse to disclose foreign assets during the divorce process. Two key methods include discovery and depositions, both of which require truthful, complete responses under oath and carry serious consequences for noncompliance.
- Discovery – The formal process through which attorneys request information, documents, and financial records. A spouse must fully disclose all relevant information in response to written questions (interrogatories) or document requests. Failure to comply can result in court-imposed sanctions, including monetary penalties, evidentiary restrictions, or additional relief in the final asset division.
- Depositions – A sworn testimony process in which a spouse must appear at a designated time and place to answer questions under oath, typically before trial. This allows attorneys to ask detailed questions about overseas holdings and financial transactions. While similar questioning can occur at trial, depositions provide more time for in-depth examination, making them a valuable tool in uncovering hidden assets before a court ruling.
By leveraging these legal tools, an attorney can force a spouse to disclose all financial assets—domestic and international—ensuring that no marital property is unfairly withheld from the equitable distribution process.
How Maryland Courts Divide Foreign Property
Since Maryland courts cannot directly transfer foreign assets, they use alternative methods to ensure fairness:
- Offsetting Assets – If one spouse keeps an overseas property, the other may receive a larger share of U.S.-based assets.
- Monetary Awards – Courts may order the spouse retaining a foreign asset to compensate the other spouse with a lump sum or structured payments.
- Court-Ordered Transfers – Judges can require a spouse to sign necessary documents to transfer an asset. If they refuse, the court may hold them in contempt or impose financial penalties.
Strategies for Divorcing Spouses with International Assets
1. Ensure Full Disclosure
Foreign assets must be disclosed in financial affidavits. Attorneys can use discovery and depositions to uncover hidden property.
2. Obtain Professional Valuations
Hire international appraisers or financial experts to accurately value foreign assets and convert them to U.S. dollars.
3. Negotiate an Asset Trade
Instead of dividing a foreign asset, spouses can agree that one keeps the property while the other receives an equivalent share of domestic assets.
4. Secure Payments with Liens or Escrow
If a monetary award is granted, request liens, trusts, or escrow accounts to ensure payments are made.
5. Work with International Legal and Tax Experts
Foreign countries may have different tax laws and transfer restrictions, so consulting an attorney with international expertise is critical.
Bottom Line
Maryland courts do not ignore overseas assets in divorce but use monetary awards, asset offsets, and financial penalties to ensure a fair division. If you or your spouse own foreign property, working with an experienced Maryland divorce attorney is essential to protect your rights and navigate international legal challenges.
Contact an Experienced Maryland Divorce Attorney
Randall J. Borden provides professional guidance on Divorce, ensuring your case is presented effectively. If you’re considering or going through a Divorce, contact us today. Let us help you navigate this process to achieve the best outcome for you.