What You Should Know About Cryptocurrency and Divorce?
Regarding divorce, Maryland is an equitable division state, which means that all marital property will be distributed between you and your spouse in a manner the court deems fair. In addition to assets like marital homes, pensions, life insurance policies, retirement accounts, and other investments, cryptocurrency has become valuable in recent years.
Cryptocurrency has grown from being a digital curiosity in its early days to a major source of income, particularly for those who invested in the crypto market in its infancy. However, because cryptocurrencies are digital and do not rely on any central banking authority, they pose unique challenges for couples divorcing. If you and your spouse are getting a divorce, it is highly recommended that you contact an experienced divorce lawyer who understands the nuances of cryptocurrencies.
What Is Cryptocurrency?
Cryptocurrency is a digital asset or a currency that can be bought, sold, or traded on exchanges. They are not based on an actual asset, meaning they have no intrinsic value. The value of cryptocurrencies is based solely on supply and demand. As a result, they can be unpredictable and challenging to measure in terms of their value. Bitcoin is the most popular form of cryptocurrency, but other well-known forms include Ethereum, Litecoin, and Zcash, as well as specific tokens, works of art, trading cards, and high-value videos.
What Challenges Do Cryptocurrencies Pose in a Divorce?
When negotiating the terms of a divorce and how marital property will be divided, a judge will consider whether cryptocurrency is considered marital or separate property. If the cryptocurrency was acquired before the marriage, it is typically regarded as separate property and will not be subject to the equitable distribution principle. However, any asset or property, including cryptocurrency, purchased during the marriage is typically considered marital property. It will be divided in a manner deemed fair but not necessarily equal.
One main challenge with cryptocurrencies when distributing marital assets is that they are digital and not stored in traditional bank accounts. No records verify the existence of bitcoins and other cryptocurrencies, making them difficult, if not impossible, to track or locate. As a result, if your spouse purchased the cryptocurrency during the marriage, it is fairly easy to hide or obscure these assets, making the discovery and division process more complicated. Hiding cryptocurrency is becoming increasingly common, particularly if one spouse has little knowledge or understanding of crypto investments.
How Can I Locate Hidden Cryptocurrency Assets?
You and your spouse are required to provide an honest and thorough account of your marital assets. If you have concerns that your spouse may be hiding assets, including Bitcoin, Ethereum, or another cryptocurrency, there are ways to discover these assets. Your divorce lawyer may request a deposition, where they can ask your spouse questions about any crypto transactions while your spouse is under oath. In some cases, a forensic expert may be brought in to conduct a more thorough search and locate hidden assets.
Our Annapolis Divorce Lawyers at Oliveri & Larsen Handle Cryptocurrency Issues During Divorce
If you and your spouse are going through a divorce and have complex financial assets, do not hesitate to contact our Annapolis divorce lawyers at Oliveri & Larsen. To schedule a consultation, call us at 410-295-3000 or complete our online form. Located in Annapolis, Maryland, we serve clients in Ocean City, Anne Arundel County, Baltimore County, Baltimore City, Calvert County, Harford County, Howard County, Queen Anne’s County, St. Mary’s County, Worcester County, Kent County, and the upper and lower Eastern Shores of Maryland.