Arizona residents who use Bitcoin and are undergoing a divorce may be interested to learn about a budding issue relating to the electronic currency: divorce courts and lawyers are becoming increasingly aware of the ability of soon-to-be-spouses to hide assets using Bitcoins. During the divorce process, both spouses are asked to fully disclose their income and all financial assets. This information is used to help determine property division, as well as how much one party should pay in alimony or spousal support. Some would rather pay less, so they attempt to hide their assets.
Some have found that one way to do this is to transfer money to Bitcoins, which are largely anonymous, and then not include them in the financial divorce paperwork. However, before this trend takes off, lawyers and courts are stepping up to put a stop to it. According to one news story, lawyers may start including digital currency specificallly in the list of items for the other party to disclose. California courts have already issued search and discovery warrants specifically mentioning digital currency.
Arizona is a community property state, meaning that the marital property will be divided between the spouses. This could be done either equally, meaning fifty-fifty, or equitably, which may warrant something different than fifty-fifty. Courts will consider various factors when determining how to divide property, including the earning capacity of each spouse and if children are involved. In reviewing these factors, judges may determine that the property should be divided in a way other than fifty-fifty.
Usual items that are classified as property include salary, furniture and homes. Items that are often considered separate property and, thus, retained by one spouse include anything owned prior to the marriage, including gifts or inheritances. How property may be divided can be complex; an Arizona attorney with asset division experience can provide advice.
Source: CNBC, “Bitcoin could be used to hide assets in divorces, warn lawyers,” Jane Croft, June 3, 2014
