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International relocation, divorce and pensions

If you are planning to move abroad, no one ever thinks the worst will really happen to them. The family have an exciting opportunity to move to another country with perhaps better opportunities and better prospects for the children.

But the possibility of divorce is not considered in the detail it deserves. In all the excitement, why would it? Some may argue that only a cynic would think about the possibility that their marriage will come to an end while they live in a glamorous but entirely different lifestyle, culture and climate abroad. I would say it is anything but cynical. The tensions and stresses of marriage may only get worse in those situations. It is above all sensible and pragmatic to give the possibility some serious consideration and prepare for it if the worst does happen.

We have covered this many times on the blog considering the many real issues that may arise from being obliged to apply a foreign law that does not sit happily with how things would work in an English divorce. Spousal maintenance, or the complete lack of it, is one major aspect. Being unable to return home with the children and becoming a “Stuck Wife” is another.

But assume the divorce goes ahead and on top of an entirely different form of financial outcome, the transfer of an English pension on divorce overseas is part of the agreement. You should not assume all will be well. I was recently informed about an English couple who relocated to America. At first glance it appeared as though they had done everything right. All of their tangible assets in England were sold before their move. The only financial tie they had left in this country was the husband’s pension.

This became a problem when their marriage unfortunately came to an end. During their divorce, the couple agreed to a financial settlement. This included a US court order for the husband to transfer his part of his English pension fund to his wife.

However, the English pension provider had some bad news when a copy of the court order was sent to them. It has told the couple that they will not act on an American court order and will only recognise an English court order.

There is provision to obtain an order which mirrors the foreign agreement, under Section 17(1)(b) of the Matrimonial and Family Proceedings Act 1984.

The problem is establishing the court has jurisdiction to entertain the application under Section 15 of the 1984 Act. This section stipulates that one or both spouses must have been domiciled in England or Wales at the time their divorce was finalised, or one party living here for a year before they made an application to the court or one of them still owning an English home they had spent some time in as married couple.

If it is possible to surmount that hurdle, the court must then agree it is the appropriate venue in all the circumstances under Section 16 of the Act.

The way to obtain her pension sharing order is for the now American-based wife to establish she is still domiciled in this country. There is a useful guide to domicile on the website and we can only wish her well in those efforts.

However, one other point strikes me. It is prudent and sensible for any lawyer faced with an overseas pension as an asset to check – before proceedings begin – with the pension provider whether a transfer is possible and if so what will need to be done to implement it. That way, if a pension cannot be transferred (and because of the narrow jurisdiction the court has, that may be the case) or if it is going to be complex, expensive and would involve proceedings in another country, it can be clarified beforehand and considered in the case. Or the divorce might even need to be started elsewhere if appropriate.

Another alternative is for the parties to enter into a postnuptial agreement and cover all these points with lawyers if necessary in both countries beforehand.

So if you are abroad and thinking of divorcing overseas and there is an English pension do remember to check first. Or obtain a professional pension valuation and some other assets to compensate you for your loss if it just can’t be done.

The blog team at Stowe is a group of writers based across our family law offices who share their advice on the wellbeing and emotional aspects of divorce or separation from personal experience. As well as pieces from our family law solicitors, guest contributors also regularly contribute to share their knowledge.

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