Don’t Worry: Your Spouse Cannot Hide Money in Cryptocurrency
It’s easy to be intimidated by the word “cryptocurrency,” especially if you fear your soon-to-be ex-spouse is hiding money in a digital underworld that operates outside of government boundaries.
According to Investopedia, “A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend.”
The key here is “asset.” Georgia divorce law treats bitcoin and other cryptocurrency like any other asset, and spouses must disclose them during the divorce process so that judges can determine whether they are part of the marital estate to be divided equitably. (To better understand what “equitable” means and doesn’t mean, see this blog post by my colleague Amy Saul Mollengarden.)
We first saw cryptocurrencies listed as assets in divorce cases a few years ago. Today, lawyers routinely ask their clients and their clients’ spouses whether they hold any cryptocurrency. Generally, divorce lawyers strongly urge their clients to be transparent about their assets because a judge will punish a spouse who willfully holds back information.
However, if our clients are concerned their spouses are not disclosing all that they should, we can hire forensic accountants and computer experts to verify what assets exist. We can subpoena tax returns, computers, phone records, texts, credentials for blockchains, and other material to find assets.
If cryptocurrency is an asset owned by the marital estate, a judge will have to assign a value to it so it can be considered in the division of assets. That can be challenging because one of cryptocurrency’s downsides is its price volatility. Often the spouses will agree to a price on a certain date – the same approach as when dividing stock accounts.
Sometimes, one spouse will agree to take the cryptocurrency while the other takes other assets considered to be equivalent in value.
Concern over cryptocurrency reflects a broader lesson we try to teach our clients: how understanding your family finances and knowing where documents are held can make your divorce proceed more smoothly.
Contact BCNTR Law
The lawyers at BCNTR Law understand how confusing and difficult divorce is and are ready to help you. Contact us today.