Advancements in technology can have an unexpected impact on areas of family law. For example, five or 10 years ago, people may have never thought that online relationships or exchanges on social media sites like Facebook would end up being used as evidence in spousal support or child custody cases. However, this is becoming more common.
Recently, news outlets have been discussing how Bitcoin, the emerging electronic payment system, may also start coming up in divorce cases. It could be very important for New Jersey residents to understand what bitcoins are and how they could play a role in a divorce settlement.
Bitcoin is, as mentioned above, a digital currency system. It is not backed by banks or regulated by government and it has thrived in an environment of anonymity. People can buy bitcoins, which are then stored in an online “wallet.” Owners can use their bitcoins to pay for things, just like they would with U.S. dollars.
Bitcoin transactions are relatively anonymous. This means that a person could convert significant sums of cash to bitcoins and keep them in an undisclosed “wallet.” Tracking down this information could be very complicated.
If the money used to buy bitcoins is part of a marital estate (from a joint bank account, for example) it would be subject to equitable distribution in the event of a divorce. Failing to disclose this asset is unlawful and could have a serious impact on the division of assets.
While hiding assets using Bitcoin may not be common practice yet, it is very possible that the digital currency could come up in future divorce cases. Experienced attorneys can provide critical support and guidance when it comes to identifying all assets and debts that must be considered in the division of property.
Source: CNBC, “Bitcoin could be used to hide assets in divorces, warn lawyers,” Jane Croft, June 3, 2014