What Is the Issue With Offshore Accounts?

The fictional worlds of Hollywood and the novelist John Grisham, and sometimes even the real world as reported by the press, sometimes portray offshore accounts as something mysterious or even inherently a little edgy, as if they are a telltale sign that someone is skirting the law.

Contrary to this image of offshore accounts in popular culture, they are perfectly legal per se. As the name implies, an offshore account is simply a bank account or security with a situs in a foreign country.

Usually, a person uses an offshore account for financial reasons, such as a favorable interest rate or because they can legally enjoy a tax advantage.

Really, the problem with an offshore account, as it pertains to divorce or separation, is a problem with disclosure. Like any other bank account, an offshore account is fair game in the process of dividing marital property.

If it belongs in the marital estate, then each spouse is entitled to a fair share of the funds that are in the account, without regard to whose name the account is in or even whether one of the spouses didn't know about the account until the time of the divorce.

Because it is potentially marital property, the existence of an offshore account must ordinarily be disclosed during a divorce proceeding or, for that matter, during the collaborative process or a good faith mediation.

If one spouse suspects that he or she is not getting full disclosure of an offshore account, or any other asset for that matter, then legal remedies may be available. An attorney may be able to assist the person with exploring these remedies.

Tags: High Asset Divorce