Turkey CIP – What Happens To Citizenship & Investment If Divorce Occurs?

Citizenship by investment applications are straightforward. However, life does not always follow suit. As many investors engage in the journey of citizenship by investment as a family, what happens to your citizenship and investment if divorce, or death, interrupts the plans?

This is a valid question and a valid concern – so, let’s shine the light of transparency onto it. 

Nearly 10 countries allow investors with a clean criminal record, who make a qualifying investment into a country’s economy, supported by the correct documentation, to acquire citizenship for themselves and their family.

The process is quick and efficient, taking anywhere between 3-12 months – with the average around 6 months. And partnering with an industry leader,  like Astons, the entire process is effortless and in some cases, can be conducted 100% remotely.

However, external factors on the investor’s side may sometimes arise and those events could affect the program’s process; such as death or divorce. Thus, many HNW entrepreneurs, investors, and families will ask, what happens to our citizenship and investment if divorce or death were to occur?

While citizenship by investment programs are prepared for them, investors may not be as aware. This is especially true with the real estate investment option that many Caribbean citizenship by investment programs offer, as well as that of Turkey. 

Real estate investment options always come with the added caveat of a holding period – the investment must be maintained [property ownership] for a specific number of years.

In this series, we will cover what happens when an unusual turn of events occurs, outside the realm of the citizenship by investment program, and what it can mean for the application, the main applicant, and their family members.

In this article, we’ll discuss Turkey’s citizenship by investment program, as it is one of the best for addressing and handling these scenarios.

Turkey’s Real Estate Investment Option

As with many other investment migration programs, Turkey’s real estate option has been the most popular route for investors to leverage for obtaining Turkish citizenship by investment.

Investors can qualify for Turkey’s citizenship by investment program by acquiring one or more properties worth, at least, $400,000. There are limitations to the investment, though, which are:

• The property must not have been previously used to obtain citizenship
• The property cannot be sold for at least three years

The holding period of three years is our main focus point in this article, as the death of the main applicant or a divorce could have a direct effect on that issue.

The term “cannot be sold” may be a bit misleading, as the valid rule of thumb is that property ownership cannot change hands, which is why the matter becomes more complex under exceptional circumstances.

What happens to the citizenship and investment if the main applicant passes?

As per the Turkey CIP program requirements, the main applicant registers the property under their name, and they must maintain that ownership for three years.

However, if a person dies, they cannot own anything, which then creates a problem. 

Depending on the investor’s will, the property will go to someone else, triggering the “changing hands” clause and rendering the citizenship of all the applicants [the investor’s family members] terminated. 

Even if an investor sets up an estate, the property will have changed ownership from the individual to their estate and will again trigger the same clause.

There are possibilities for circumventing this issue – to be clear, this article does not constitute legal advice in any way, shape, or form. Should you find yourself in this situation, you must retain the representation of a skilled and seasoned lawyer to advise you.

One possible solution is that the family does not report the death of the main applicant to the Turkish government until the holding period has expired.

This is possible if the investor has died abroad and the family does not divide any assets located in Turkey – such as for inheritance issues. .

But, what happens if the investor passes while in Turkey? 

That requires a different game plan. 

Inheritance proceedings can take time, and as long as the property is not granted to an inheritor and remains within legal limbo, it will not technically change ownership, and the investor’s family will maintain citizens. 

Once the holding period expires, the family’s legal representative can then transfer property ownership or divide it between the inheritors.

However, to accomplish this, the investor would need to structure their will accordingly. Which would require the assistance and guidance of their attorney as soon as they acquire the property [via the citizenship process] to ensure that it does not change ownership until the holding period is over.

The family’s attorneys should also consider who the inheritor of the property will be and ensure that the will establishes such in a very well-defined manner. 

This detail is critically important, because if the inheritor is a family member, they may activate legal leverages to acquire their inheritance before the holding period passes. Which would result in the loss of citizenship.

What happens to the citizenship and investment if divorce should occur?

Another complex issue, that is potentially more common, is divorce. What if the main applicant and the spouse get a divorce?

To understand what happens to the citizenship and investment if divorce were to occur, we will have to break the situation down into two scenarios:

• Divorce after submitting the application but before gaining approval (pre-approval stage)
• Divorce post-approval

Divorce at the pre-approval stage

Once the application is submitted, the application cycle begins. The government starts all the various processes, which take several months to complete – on average, between three to six months.

If an applicant gets divorced during this stage, there is still room for maneuvering, but this depends on the main applicant and spouse.

Suppose the divorce is amicable, and both parties want the application to continue. In that case, they could refrain from reporting the divorce to the Turkish authorities until they get approved and obtain citizenship.

However, if the divorce is hostile, this can lead to complications. The main applicant can file to remove the spouse from the application by updating their information, or the spouse may file, on their own, for the removal. 

It gets even messier when there are children involved. Suppose the divorce is settled before approval and custody of the children is given to the spouse. In that case, the spouse can file to remove themselves and the children from the application, which could be used as leverage within the divorce settlement.

If the main applicant obtains full custody of the children, then the spouse cannot file to remove the children from the application unless the spouse can establish there may be or are clear dangers posed toward the children.

Divorce after application approval

In the post-approval stage, the issue is a bit more clear-cut. Once the main applicant and their family members obtain citizenship, they become protected by Turkish constitutional law. 

The only thing that tethers them to the citizenship by investment program is the holding period of the investment.

During the holding period, if the main applicant and the spouse get divorced and it is amicable, then they can do the same thing and not report it to Turkish authorities.

However, even if they report it, constitutional law kicks in, and if the main applicant maintains their investment, all family members will retain their citizenship status.

Even if the divorce is hostile and the spouse gets custody of the children, Turkey’s constitution will protect their citizenship status, and it cannot be revoked as long as the main applicant maintains ownership of the property throughout the holding period.

Revoking a person’s citizenship is a very complex, complicated matter. 

Since the only clear condition for maintaining citizenship under the citizenship by investment program is that the main applicant continues holding the investment for three years, a divorce and custody changes won’t affect the family’s status.

There is, however, an issue that could go very wrong post-approval, which could result in everyone losing their citizenship, and that is – once again – if the ownership of the property changes within three years.

As a disclaimer to this scenario, however, it is imperative to know how difficult it is for a property to be sold within the holding period. 

Once an investor buys a property to obtain citizenship, the resulting registration certificate, or TAPU, will stipulate, loosely translated, that the property cannot be sold for three years.

In practice, however, the property can be sold, and ownership can change through gifting or donating the property, but, the bottom line is, under these conditions, it isn’t as straightforward as selling property in general. 

However, it can still be done.

In theory, a main applicant could sell, gift, or donate the property to another party out of spite to get the citizenship of the spouse (and consequently everyone else) revoked. 

The spouse can also use this issue as a pressure point. 

If the spouse demands, during the divorce negotiations, ownership of the property in the divorce settlement, that action means the property will have effectively changed hands. It would then render all of the family’s citizenship revoked. 

Astons – Partnering with leadership

Life happens, and Astons understands that. 

That is why we do our best, to provide you the answers you want and need before you have to ask them.

Our mission at Astons is to enable HNW entrepreneurs, investors, and families to leverage the world for their maximum benefit. 

But unfortunately, we cannot eliminate Murphy’s Laws, so we try to attack things head-on.

Citizenship by investment is a very powerful asset for citizens to leverage. But, things like death and divorce can interrupt life’s best plans, and our clients need to know what happens to their citizenship and investment if divorce or death were to occur. 

So, it’s simply responsible investing to consider these issues when engaging the journey of global citizenship via citizenship by investment. 

By understanding the laws of the CIP nation and the divorce laws of one’s home nation, investors can protect themselves from these exceptional – and unfortunate – circumstances.

At Astons, we are client-focused and success-driven, and our team of seasoned industry insiders and legal experts are here for you.

Don’t simply wonder about how to leverage your success to elevate your life to uncompromised freedoms, schedule a free comprehensive consultation with one of our experts and we can show you how. 

 

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