How U.S. courts can seize your foreign real estate

Full transcript

0:12 Hi, I'm Max Dilendorf, founder of Dilendorf Law Firm in New York. My firm represents private clients and cross-border transactions, including purchase and structuring of foreign real estate.

0:27 And as we enter 2026, it's especially important for U.S. owners of foreign real estate to understand how U.S. courts handle interests in foreign entities.

0:42 More Americans are investing in real estate overseas with popular destinations now, including Dubai, Spain, Italy, and other jurisdictions.

0:55 But as exciting as these purchases are, many U.S. buyers take title to foreign real estate in their personal name or for a company that they formed overseas.

1:09 And so while convenient, these approaches can create unexpected exposure to U.S. creditor claims. Our firm does not help anyone evade legitimate debts that is illegal under U.S. fraudulent transfer laws.

1:28 Instead, this video is about practical, lawful planning and understanding how US courts treat foreign entities owned by US residents. A good example comes from the federal case called Wells Fargo Bank versus Barber. It was decided by US District Court for the Middle District of Florida. The case involved a Florida resident who owned a Nevis-based limited liability company called Blaker Enterprises. And so the central issue was whether U.S. judgment credit source could reach defendants' ownership interest in that foreign limited liability company. The court decided that Nevis LLC membership interest was intangible personal property that was located with the debtor in Florida and because the court treated that property as located in Florida, it applied Florida law, not news law. Why? Well, the judge explained that remedies afforded to judgment predators under the Florida LLC Act and Nevis LLC Act are not substantially similar and the Florida law applies.

2:57 And so under Florida's LLC Act, if the debtor is the sole member, a creditor can ask the court for a charging war and foreclosure of the membership interest.

3:10 The court held that plaintiffs were plausibly entitled to enforce the deficiency judgment by foreclosing Barber's interest in Nevis LLC or in the alternative by charging the membership interest.

3:29 It's important to know that Barber case did not involve real estate located in Nevis.

3:36 Instead, it stands for a broader principle that U.S. courts have strong authority over U.S. residents' ownership interests, even when the underlying entity is foreign.

3:51 And for example, if defendants Nevis LLC held foreign real estate rather than other assets, The legal analysis of the membership interest likely would have been the same.

4:07 This principle expands beyond Florida.

4:11 Other major jurisdictions including New York, California and Texas have similar frameworks that allow creditors to go after LLC interests, especially in single-member entities.

4:25 In New York, Linative Liability Company law section 607 states that a Quirk may charge debtors LLC interest with payment of judgment and the creditor has the rights of an SINE.

4:42 Californians axis have similar statutes both states authorize charging orders and when Precharging water is insufficient to allow the court's water foreclosure or sale of a member's LLC interest.

5:00 And so, in practice, this means that a US resident who owns foreign real estate through a foreign company could be subject to legal remedies under their home state's law, including forced transfer of the ownership interest.

5:15 So holding foreign real estate in your name or through a foreign company without a supporting US structure can leave assets exposed to creditor claims in the US, which is totally consistent with US law, but often inconsistent with buyers estate planning expectations. And so So effective protection should start well before any dispute or claim is on the horizon.

5:47 US law prohibits making transfers with actual intent to hinder delay or defraud credit scores.

5:57 So legitimate asset protection planning should be done for actually.

6:02 So for clients who want to include foreign real estate in asset protection and estate planning plan. One option is to hold that real estate through a US domestic asset protection trust in a state like Delaware, South Dakota or Nevada or through an offshore trust in place like Cook Islands. These structures when established well in advance of any claim and in compliance with applicable fraudulent transfer laws can add an additional layer of separation between individual and the foreign real estate and so if you are thinking about buying property abroad and wanted to fit into a long-term estate plan reach out to us for a consultation thank you for watching and I will see you in the next episode

A transcript of the recording, so it reads as speech rather than as prose. It explains the law in general terms and is not advice on your own situation, which turns on facts this video cannot know.