W. Tyler Moore, PC

Do not try to hide assets in divorce

Touted as one of the largest types of cryptocurrency worldwide, Bitcoin is a digital currency that is not linked to a bank or credit union and is not backed by any sort of governing authority. This means that Bitcoin accounts can be kept secret, and transactions done over the Internet using Bitcoin can be kept anonymous. This makes identifying these assets difficult because there is no paper trail.

"Why is this important," a person in Texas may ask. It is important because it can be used as a means to hide assets in a high value divorce. While hiding assets is both unethical and illegal, some spouses try to do so to have the upper hand, when it comes to financial issues in a divorce, such as property division and spousal support.

That being said, any success a spouse might see in hiding assets using Bitcoin will not last long, and there could be serious consequences for doing so. In a divorce, each party must go through the discovery process, in which they execute sworn statements regarding the value of all their assets, as well as all their debts. In addition, lawyers can examine any bank statements provided for discrepancies in what a party says they have (or donot have).

If a spouse used money in their bank account to buy Bitcoin, their ex's attorney can call into question what happened to those funds. In the end, it is very difficult to conceal funds through the use of Bitcoin, as it would necessitate basically lying under oath.

As this shows, while it may be tempting to hide assets through the use of a cryptocurrency, doing so is both difficult and unlawful. Most likely, the spouse trying to hide assets will eventually get caught, and could face significant consequences in the outcome of their divorce. Honesty and transparency throughout the divorce process is the better way to go, so that the outcome of the divorce is fair to all involved.

Source: Bloomberg News, "Bitcoin the New Mattress Full of Cash for Divorce Cheats," David McAfee, Dec. 28, 2017

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