Kevin Qualls Family Law
Maintaining Professionalism. Preserving Civility. Finding Answers. Practical Guidance On Important Divorce And Custody Matters

Foreign accounts are not always bad, but raise divorce issues

Contrary to popular misconceptions, someone who has an offshore bank account, which is another name for an account with a foreign bank, is not necessary doing anything wrong, either in the context of a divorce or otherwise. In fact, many people, even those without wealth, can and often do have bank accounts overseas or in one of our neighboring countries. A person may do so for a variety of reasons, but usually, it has something to do with a financial or an above-board legal advantage that the account offers.

However, these sorts of accounts can raise divorce issues, especially in a high asset divorce, where their use may be more common. At the most basic level, and assuming that both parties are behaving professionally and being candid, the account may have to be divided according to California's community property laws. This means that it is possible that the court will order a 50-50 split of the account or, as part of a broader process, require the account to be transferred in to the sole name of one of the spouses.

Even if doing this is not a source of contention, there may be practical problems with doing since one is going to have to work in the confines not only of California law but also of the laws of the other country where the account is situated. The layering of legal requirements can make it hard even for well-intentioned people to divide the account as agreed or ordered. They may need legal help in order to do so.

Finally, while offshore accounts are not red flags per se, there are many people who might try to use this type of account to hide assets from that person's spouse during the divorce only to gain access to them later. This sort of behavior raises its own set of issues.

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Kevin Qualls Family Law
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