It’s important to know that cryptocurrency is an asset, and for this reason, it is entirely possible for it to be considered as separate marital property. This can make things incredibly complicated if you are in the middle of a divorce. Even though crypto and Bitcoin are known for being volatile, it is quickly gaining popularity and it is becoming an increasingly common asset in divorce proceedings.
Is Cryptocurrency Marital Property?
Bitcoin is a cryptocurrency, and it facilitates secure transactions online, without the need for a bank. It can be exchanged or traded for various other currencies, or services. As the use increases, new issues have arisen, particularly in the realm of divorce and the division of assets. Cryptocurrency is an asset and for this reason, it can be considered as being separate marital property. The growth of a currency’s value during the marriage can also make it a marital asset, even if you purchased the currency before the marriage took place. This is especially the case if both spouses were involved in using the cryptocurrency.
When Can Bitcoin Not Be Divided?
If you look at cryptocurrencies such as Bitcoin, you will soon see that they are treated in the same way as any other asset during a divorce. If the transaction took place before the marriage or if it was given as a gift, or inherited, then this is the only way that it is not considered as being marital property. For this reason, it cannot be divided. If the transaction happened during the marriage, then it can be divided. When Bitcoin is marital property, the easiest way to find an agreement that suits both parties would be to split the value 50%-50%. Bitcoin can be cashed out at any time, and this makes it easier for both spouses to get their half. Another way to get around splitting Bitcoin would be if other marital property was exchanged. One spouse may want to keep the Bitcoin and therefore may be willing to give up martial property. This has to be in line with the current value of the currency.
Misinformation and Crypto Assets
Unfortunately, it is easy for a misinformation gap to happen when dealing with cryptocurrency. One example of this would be if one person is involved in the cryptocurrency market, but the spouse does not have much knowledge of the investments or how they work. This kind of gap can lead to one person not really having a clue as to what to look for when it comes to uncovering holdings throughout the process of asset division.
The Growing Awareness of Bitcoin
At the end of the day, there is a strong and growing awareness of cryptocurrency, and this has led to even more attorneys trying to find ways of dealing with any grey areas. A spouse may suspect that their partner has hidden cryptocurrency holdings, or they may notice that their spouse suddenly has access to funds that are clearly not tied to existing employment or even investment.
So how are assets like this discovered, when the spouse may not be remotely aware of them? Right now, the easiest currencies to find out about are Ethereum and Bitcoin. Other currencies, as of right now, have very high levels of anonymity. They are however, less valuable and much more volatile, so it is not as likely for them to hold as much value. In most cases, a forensic expert will be brought in, and they will look for statements, financial documents, login credentials, currency tickers and keys for digital wallets.
Dividing Assets during a Divorce
If you are married, it is essential that you have a solid understanding of your income and your investments, as well as that of your partners. If you can ensure that you have a great deal of knowledge about finances and the situation between you and your spouse, then this will make it much harder for your partner to hide things, should a divorce happen. If you have great concerns about your spouse having cryptocurrency assets or if you want to know more about the process of asset division, then we highly recommend that you get in touch with us today. When you do, we can then give you the advice you need to ensure that you get a fair share of the assets at the end of the divorce.
You can contact us by phone or by email at any time. Our team can’t wait to help you get the assets you are entitled to.