Bitcoin digital currency in a divorce
People in Ohio who are approaching divorce might be interested to learn about Bitcoins, a potential new way to hide assets from one’s spouse. Before and during a divorce, it is not uncommon for people to attempt to conceal all types of assets or income so that they won’t have to split those items duringproperty division. Bitcoins are a form of digital currency that lets people stay anonymous, making it a high-tech option for squirreling away cash.
During divorce proceedings, spouses are supposed to fully disclose all assets by providing a list of items such as vehicles, houses, stocks, bonds and jewelry. All cash and bank accounts should be included. But some people don’t offer complete lists. Theoretically, people could convert cash into digital currency that isn’t dependent on banks. Since it is anonymous, it would be difficult for spouses to catch their partners hiding money this way.
However, spouses might be able to catch their partners by checking bank accounts. Transferring money to Bitcoin would still show up on bank records from an individual’s account. It would be harder to catch someone using their business to hide assets though. There wouldn’t be any record if Bitcoin put money into a business account without an invoice. It would also be challenging to prove that someone owns an account once money was transferred to Bitcoins, but if someone showed clues of a Bitcoin account used by their spouse a court might order disclosure of the asset’s value.
Knowing that spouses have taken steps to hide assets could give people bargaining power in divorce negotiations. A family law attorney could work with a spouse to ensure fair division of assets by negotiating on their behalf or representing them in court.
Source: Daily Finance, “Bitcoin: The New, High-Tech Way to Hide Assets in a Divorce“, Robert Pagliarini, June 16, 2014