Financial disclosure in divorce: tackling hidden assets and cryptocurrency
Divorce proceedings are often complex and can prove to be an emotional drain, especially when it comes to the division of marital assets. The rise of cryptocurrency has only added to this complexity, posing new challenges to achieving a fair resolution. These digital assets can create unique difficulties in obtaining a complete financial disclosure in divorce proceedings.
Understanding financial disclosure in divorce
The starting point of any divorce settlement is financial disclosure by both parties. This helps reveal all assets, liabilities, incomes, and expenditures. The process begins with both parties completing a Form E, which asks for detailed financial information. This form, alongside bank statements and other documents, serves as the baseline for negotiations.
Occasionally, a party may be tempted to conceal certain assets to influence the divorce settlement in their favour. This involves under-reporting income, over-reporting debts, or transferring assets to a third party. However, digital assets such as cryptocurrencies have opened up new avenues for asset concealment.
The rise of cryptocurrency in divorce
Cryptocurrency is a virtual currency that is stored in a digital wallet, making it particularly difficult to trace without the necessary knowledge or expertise. It operates independently from a central bank, making it appealing to those wishing to hide assets.
Legal strategies for unveiling hidden assets
Despite the complexities, there are legal strategies available for detecting hidden crypto assets in a divorce. These include:
- Bank statement analysis - Crypto assets are usually bought using conventional currency, leaving a trace in bank statements. An analysis of these statements can reveal payments to crypto exchanges, suggesting the existence of crypto assets.
- Forensic accounting - Forensic accountants can help trace complex financial transactions, including those involving crypto assets. They can examine bank statements, business accounts, and tax returns for indications of hidden crypto assets.
- Court orders for disclosure - If there's substantial evidence suggesting the existence of hidden assets, the court can order the non-disclosing party to provide specific information or documentation. They can also make orders against third parties, such as accountants or business associates, to provide necessary information.
- Use of technology - Specialist companies can trace the disposal or attempted disposal of coins from a disclosed or discovered wallet.
Ensuring financial transparency
Full financial transparency is essential for a fair divorce settlement. If you suspect your spouse has not fully disclosed their assets, you should seek legal advice. It's essential to consult experienced family lawyers who understand the nuances of digital assets and the approach of the family courts.
Divorce is challenging, and the complexities of financial disclosure, particularly when dealing with crypto assets, can make it even more so. To navigate these complexities, it's essential to understand the legal requirements of financial disclosure, the potential for hidden assets, and the strategies available for revealing them.
Understanding the role of cryptocurrency in divorce law and knowing how to detect hidden assets are crucial in ensuring a fair settlement. With professional legal advice and the right approach, it's possible to navigate the complexities of financial disclosure and reach a just resolution.
For further information and trusted legal advice regarding divorce, get in touch with us at Carlsons Solicitors.