Many of our readers know that offshore accounts are investment tools, a lot like stocks, bonds, insurance policies and retirement plans. The distinctive feature of an offshore account is, as the name implies, the bank holding the account is in another country and therefore subject to the laws of that other country. This may create legal complications, but it also can give some important legal and financial advantages to a legitimate investor.
However, like other accounts, offshore accounts are subject to property division under Arizona’s community property laws. So, in many cases, the account will be treated as community property and therefore subject to a 50-50 split. Some exceptions may apply to this principle, must notably if it turns out the account is not legally community property, but the separate property of one of the two separating spouses.
Arizona residents often run into legal trouble with respect to offshore accounts not when they have one, but when the attempt is to hide wealth in it in an effort to avoid dividing it with their spouse.
Unfortunately, there will always be people who try to skirt the rules, and the best defense against this can be to have the help of a family law attorney and other professionals who can help locate these types of accounts and force them to be divided fairly.
On the other hand, if someone owns an offshore account that he or she believes is separate property and not subject to division, then that person needs to disclose its existence, but has every right to raise arguments in court that it should be treated as separate property.