When couples divorced in the past, they split their marital assets between them, and that concluded the property settlement. But with the rise in popularity of cryptocurrency assets like Bitcoin, dividing assets becomes more complex.
Read on to learn more about dividing digital assets in divorce.
Know what must be disclosed
During divorce, both sides likely will have to answer interrogatories and respond to requests for production of documents. This is when you may be asked about ownership of any cryptocurrencies or other digital assets.
Never lie in your responses to these questions and requests. That could result in a perjury charge. But understand that you only must disclose what is asked of you. You don’t have to volunteer information (and shouldn’t).
Bitcoin valuations vary wildly
The cryptocurrency market is highly volatile by nature. Since fluctuations are so common, it’s fair to conservatively value your crypto assets. Another thing to keep in mind is that no one needs to know that you trade in cryptocurrency because these transactions can be kept completely private as long as no one asks about their existence.
But make no mistake — cryptocurrency purchases are not completely untraceable.
How they can be traced back to you
Digital currencies use a distributed ledger to record each transaction that was made using the currency. This leaves a path of ownership that can lead straight back to you.
Digital currency investors can transfer digital assets to cold wallets, e.g., digital drives with private key access. Once that is done, their trail grows cold.
Protect your assets in a divorce
Your goal in your divorce should be to have an exit strategy that leaves you with the assets and resources needed to move forward to the next chapter in your life.
