Relocation is a hot topic for many at the moment, particularly those who are missing loved ones “back home”, who they haven’t seen in months due to COVID-19. But what factors do families need to think about when contemplating a permanent move abroad? VANESSA DUFF (MITCHELL), Senior Associate at Withers, looks at five things you should consider before moving overseas.
#1 Children
For those couples who have separated or divorced, one parent cannot unilaterally move overseas with a child. This requires the other parent’s consent, or an order of the Court. Applications to the Court for permission to remove a child to another country can be lengthy (if opposed), and these need to be well-prepared and planned. Securing early legal advice is essential.
#2 Divorce
Once the family resides in the new country, it’s likely that the Courts of that country will deal with any future divorce proceedings, or child-related matters, and local law will apply. Hong Kong is known for its generosity of financial settlements for non-working spouses. The starting point is an equal division of all assets, although a departure from equality can take place depending on the circumstances. Lifetime maintenance awards are relatively common in Hong Kong.
The approach elsewhere varies. In Europe, for example, matrimonial property regimes apply where spouses often adopt a regime of separate property. An equal sharing of all assets and long-term maintenance is almost unheard of. In the United States, some states such as California are community property states, where marital assets and property are divided equally upon divorce; others are equitable distribution states such as New York, where the court will divide property between spouses in a way that it considers fair.
Tactical decisions sometimes need to be made where a wholly different outcome on divorce could apply in the new country.
#3 Pre-nups
Where there is a pre-nuptial agreement or a marriage contract, it’s important to ensure that the agreement will be upheld in the new country. Many European marriage contracts signed before a notary would not be upheld in Hong Kong as they are likely to have been signed too close to the wedding day and without independent legal advice or financial disclosure. They may not be valid in other countries either.
A post-nuptial agreement may be recommended. Each country will have its own rules, and these should be checked prior to the relocation.
#4 Wills
In some countries there are strict rules about who you can leave your assets to. It’s essential to check the terms of your will, and to seek advice from a specialist in international estate planning prior to a relocation.
#5 Tax
Moving from a favourable tax regime to a more onerous tax regime can put a strain on the family finances. You may also need to keep an eye on possible future changes to tax laws in high-tax jurisdictions. The ability to sustain the same, or similar, lifestyle to that enjoyed in Hong Kong is just one of many factors to consider when debating a move abroad.
For more advice, contact Vanessa Duff (Mitchell) at 3711 1698 or email vanessa.duff@withersworldwide.com.
Like this? See more helpful tips in our Living in Hong Kong section.
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