Law Offices of Matthew S. Schultz, P.C.

The rise of the Bitcoin could lead to new asset disclosure laws

It doesn’t matter whether you have been married for a year or twenty years, dividing assets during a divorce is often complicated. In fact, this can be one of the more contentious points when a couple is separating.

In the past, property division involved disclosing assets such as real estate, stock options and contents of bank accounts. With continued technology advancements, however, divorcing couples may need to start considering a new type of asset: the Bitcoin.

In general, the use of digital currencies has become more popular recently. It is a way for investors to stay anonymous - it can be very difficult to identify the owner of an account, or "online wallet".

For an individual trying to hide wealth from his or her spouse, converting dollars to Bitcoins may seem like the ideal solution. No one would know about it, and the owner of the online wallet would appear to have fewer assets, thus losing less money in the event of a divorce.

As with any new tech advancements, it takes time for laws to fully address the implications of the technology. While there are few, if any, laws that govern Bitcoins and digital currencies in the event of a divorce, one state has already begun including digital currencies in asset disclosure orders.

Requiring full disclosure of all currencies could ensure that assets are divided equitably and according to law in the event of a divorce. For someone going through a divorce, the thought of tracking down an estranged spouse’s possible online wallet may seem daunting. Working with a family law attorney can help with that process and help protect future interests.

Source: CNBC, “Bitcoin could be used to hide assets in divorces, warn lawyers,” Jane Croft, June 2, 2014.

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