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There's a new twist on asset hiding and disclosure in divorce

An attorney who focuses on divorce and property division matters may have unusual stories about spouses hiding assets from each other. However, it’s unlikely that an attorney has heard of the latest scheme: Bitcoin.

For readers unfamiliar with Bitcoin, it’s an electronic currency that seems to be gaining acceptance by many businesses. Unlike a bank account, it offers greater anonymity to investors. In fact, it may even be hard to trace Bitcoin investments back to an individual.

According to one account, spouses may be turning to Bitcoin in an effort to hide assets. With a lower marital estate valuation, a spouse may not have to divide as much of his or her property, pursuant to equitable distribution rules.

However, an attorney knows that various discovery tools are available to parties in a divorce. When the marital estate is being valued, an attorney might specifically obtain a search and discovery order from a court that includes Bitcoin or other digital currencies. In fact, one commentator notes that disclosure orders are already being updated to account for new technologies, such as expressly including Facebook and Twitter in search lists.

Yet marital estate valuation can be difficult even with full asset disclosure from both parties. If a couple holds assets in trusts, there may be issues regarding whether such funds should be considered non-marital property, such as in the case of inheritances. Valuable antiques and jewelry may also be hard to value, as are deferred income and stock options. When property division matters become complex, an individual would do well to consult with a divorce and property division lawyer.

Source: CNBC, “Bitcoin could be used to hide assets in divorces, warn lawyers,” Jane Croft, June 3, 2014

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