Expat Divorce and Settlement Agreements

Matrimonial Settlement Agreements are sometimes considered during expat divorces.

If a UK national moves abroad and subsequently divorces there, it is important that assets in the UK are not overlooked, particularly UK public service or final salary pensions which can be extremely valuable.

Some foreign courts will not take into account UK pensions, but others will declare that a divorcing spouse is entitled to a share of the member spouse's UK pension(s). This is often done by agreement and it is assumed that the foreign order/declaration/agreement can be put into effect in England.

Unfortunately a foreign order/declaration/agreement in respect of pensions is not binding on the UK pension provider and, therefore, a UK pension sharing order is required. If one of the parties is resident or domiciled in England then this is relatively straightforward to obtain - particularly if done by way of a consent order in England (although it is important to obtain an actuary's report in advance about how best to split the pensions and to be clear about who pays the costs of transferring the pension).

However, what happens if the receiving spouse is a foreign national and the member spouse has decided never to return to England? In that situation, the receiving spouse would have to move to England in order to obtain a pension sharing order. The only exception to this in non-EU divorce cases may be an argument about forum necessitatis but this is untested.

If a pension sharing order is not possible in England then the foreign court could look at alternatives, such as a maintenance order against the spouse with the pension (although it would have to be backed up by life insurance which the court may not have the power to order) or a lump sum/property order by way of compensation.

As is always the case when contemplating an international divorce involving English assets, take advice from an international expert before commencing legal proceedings or entering into any form of matrimonial settlement agreement.

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