The point of divorce is to divide and financially separate each party from the other—completely if there are no children; children are subject to the continuing jurisdiction of the court until emancipated or through college. This blog covers the complexities of situations where the parties have a parcel of real property in another state or country, addressing the question: Can a trial court divide this real property, and if so, how is the judgment enforced?
Indiana follows the one pot theory; this means that the following real property is subject to the trial court’s (divorce court’s) authority to divide: 1). Property owned by either spouse before marriage; 2). Property acquired by either spouse in his or her own right after marriage and before the final separation of the parties; and 3). Property acquired by their joint efforts.1 There is thus no limitation on a trial court’s authority to account for and divide real estate located in other states and countries.
For property located within the United States, the biggest issue may be getting proper, admissible evidence of its value; this is so the trial court can determine what the value is of this property, or be given a range of values to decide from, if there is a dispute, as the trial court is charged with dividing under the one-pot theory in a just and reasonable manner. Hearsay statements of value have limits as to admissibility, but a party can generally speculate or opine about the value of his or her real estate.
Once divided, the other state has to honor the trial court’s divorce decree under the Full Faith and Credit Clause of the United States Constitution. The (federal) United States Constitution is supreme to any other different protections provided under state law, so it trumps if a state were to resist enforcing another state’s property division. So, yes, a trial court can address and divide marital property in other states and generally, its order is enforceable.2
For real estate located in a foreign country, the division still faces significant challenges as to valuation. This becomes more acute if the parcel is located in a country with a foreign currency and different language. At this point, phone testimony and/or translations come into play and this can become very expensive, given the time and individuals necessary to identify the property and value it. If you have a foreign parcel of real estate, it is critical this be identified and discussed with counsel immediately—this is a time-consuming process and may even take locating and consulting an attorney in the foreign country if their property laws are materially different than the United States; and many countries indeed have vastly different notions of real property laws.
This is just the beginning of enforcing a judgment for the value of a parcel of real estate that is within the martial pot but located abroad. Generally, to enforce a decree in another country, the value of the division must be reduced to a monetary sum (called a money judgment), not just an order of half of the house. Assuming this is the case, the difficult question then becomes whether the foreign country is a party to (agrees to) the Foreign Judgment Acts.3 If not, then enforcement can be very difficult to impossible in a straight forward manner and may have to be litigated under other common law or statutes of the foreign country in those countries’ courts. Enforcement, with the Foreign Judgment Act or without, is accomplished under the principle of comity, meaning a foreign court gives a foreign judgment substantial deference under its laws.4
In the final analysis, assuming subject-matter and personal jurisdiction exists, an Indiana (divorce) Court has jurisdiction over foreign real estate. This is consistent with the objective of American law and Indiana trial court judges to provide complete relief. However, enforcement of the judgment may be difficult. To maximize the ability to recover abroad, it is imperative to try the case, and if possible, obtain a property division that is a format most likely to be recognized by the foreign country.
This blog post is written by attorneys at Dixon & Moseley, P.C. It is not intended as legal advice or a solicitation for services. It is provided as general educational materials. Dixon & Moseley, P.C. advocates handle cases with international property to international child custody disputes under the UCCJA and Hague Conventions. This blog is an advertisement.