Following the warnings published on BBC News this week, Justine Woodcock, Chartered Legal Executive in Astle Paterson’s Divorce & Family Department, offers further guidance to divorcing couples in relation to Bitcoin.
When couples divorce, disputes can arise relating to who gets what from the couple’s money and other assets. When the couple cannot resolve the dispute, the Courts will decide what is a fair distribution of assets.
However with the recent rise of digital currency, such as Bitcoin, it is not yet entirely clear how the Courts will deal with these assets – given that the actual value of digital currencies currently fluctuates wildly from one month to the next. So how are the Courts likely to act?
Should a divorcing couple be unable to reach agreement on the division of their finances, the Court is asked to intervene. Both spouses will be asked to fill out a statement setting out in detail their financial picture. This includes money in bank accounts, property, pensions, shares and other investments. It is common practice for couples to complete this form voluntarily, even prior to either of them instigating Court proceedings, because it provides all the information required to negotiate a fair division of the assets. Only once a full picture of the assets held is known is it possible to decide on what is a fair division of those assets.
More often than not, the couple reach an agreement between themselves as to what a fair division should be. However, should they be unable to reach agreement, the Court will ultimately order what should happen. The Court will try to create a situation that is fair to both of the separating couple. Of course, what fairness looks like in reality depends on each couple’s individual circumstances.
Due to the anonymous nature of these currencies, it may be tempting for a spouse to hide these assets during divorce proceedings.
As digital currencies are an investment, it is essential that should you own any digital currency, it is disclosed in your divorce proceedings. Should a spouse be seen to be hiding assets, they are likely to be criticised by the Court and, should a final order have been made by the Court, the spouse runs the risk of the order being overturned on the grounds of dishonesty.
For further advice regarding digital currency in divorce cases, or in general, please contact Astle Paterson. Our solicitors are obligated to remain acutely aware of all legal nuances, and we are best placed to offer you up-to-date guidance.
Got a legal question about Bitcoin or other digital currencies? Contact Astle Paterson’s Divorce and Family department.
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