Chasing Divorce Assets, Part 4

This four-part blog series addresses the sourcing of money and property in divorce proceedings to discover hidden assets and income, distinguish separate property from marital property and enforce or attack prenuptial agreements.

 International Tracing

Traditional discovery is an essential but incomplete tool when tracing foreign assets and income in connection with a divorce. Divorce lawyers must understand, and explain to clients, that the subpoena power of a U.S. court does not extend beyond its sovereign borders. A discovery request or subpoena served on a foreign financial institution may be filed quietly in a drawer and forgotten, unless perhaps the institution has a domestic branch or registered agent in the jurisdiction where the subpoena was issued.

An international treaty helps to obtain information about overseas property and income if the foreign court is authorized and engaged to cooperate.  A commonly used tool in international tracing, the Letter of Request, is issued by a domestic judge and directed to a foreign judge. The Letter of Request must include a description of the claims and defenses, description of the information and documents requested, and an explanation of how the requested evidence will be used to support the claims or defenses raised in the proceeding.

A Letter of Request does not command the mandatory power of a subpoena. It may be treated more akin to a wish list in the foreign court.  For this reason, a Letter of Request must be exquisitely detailed to inform the foreign judge of the exact nature of information needed and how it will be used.  A document request that is broad or vague might yield ineffective results and the tone of the request may influence the outcome.

A successful Letter of Request requires meticulous planning in advance.  When a spouse suspects marital assets have been hidden in foreign accounts, there may be lifestyle evidence to document such as frequent trips to tax-haven countries, extravagant purchases, or domestic transactions that point to foreign sources.

If the hidden assets or income would be marital property or income, then a strong case can be made in the Letter of Request for obtaining more information.  If the property would not be marital, but relevant to equitable distribution factors, then a more specific, targeted request is called for.

Whether chasing hidden assets, defending separate property protected by a prenuptial agreement, or attempting to sort the components of a mixed bank account, asset tracing is a method that has practical applications in the divorce context, even across international borders. To review your unique circumstances with an experienced Pittsburgh family law attorney, call Pollock Begg at 412.471.9000.

About the Author

With an MBA and more than two decades of experience handling complex financial affairs, Partner Brian C. Vertz excels at cases involving assessment of personal assets including premarital wealth and trusts, valuation of closely held businesses, executive compensation, medical and dental practices, and complex child support litigation. Brian was selected as the Pittsburgh 2019 Lawyer of the Year for family law through The Best Lawyers in America peer review process.