As with many advances and changes in society, we are now seeing issues in divorces that are novel. Cryptocurrency is a digital currency, one of the most popular being Bitcoin. As cryptocurrency becomes more common, the issue will become a big one in divorces as well.
When people go through the divorce process, they are required to fully disclose all assets and liabilities. In Colorado, the failure to fully disclose assets can cause your divorce case to be reopened for up to five years after the final decree of dissolution has entered. Nearly all aspects of your life are required to be revealed, analyzed and divided. While the process can be painful and require more disclosure than comfortable, full disclosure is important for the couple to reach a fair result.
Only when all information is known and shared can the parties begin the process of trying to reach out of court settlements or property prepare their separate arguments for court. Divorce professionals each have their own approach and methodology to assisting couples in dividing their property. In Colorado, the law requires that the division be “equitable” which is a bit of a moving target.
As with any new type of property or technology, we have to navigate carefully when we determine how to divide something as seemingly esoteric as cryptocurrency. Judges, attorneys, and financial professionals need to understand the property itself before they are able to devise a way to equitably assess and divide it as part of a divorce. Equitable does not always mean equal, but rather a fair division.
There is a recent story out of the UK in which a couple is fighting over $830,000 of cryptocurrency. Digital currency is a new type of financial asset and regulations and laws have yet to keep up with this new trend. Family laws are no exception.
Cryptocurrency is unique because of its versatility. With cryptocurrencies you can:
- buy goods
- accept payment
Furthermore, cryptocurrencies are entirely digital. As digital currency becomes more and more prevalent, the law will begin to develop better strategies for its division in divorce. Until then, seek out the advice of experts before dividing anything.