Crypto assets (such as Bitcoin, Ethereum and NFTs (non-fungible tokens)) are subject to the duty of disclosure in divorce proceedings, just like other assets; they must be disclosed to the other party and the court. If the crypto assets are consideredto be matrimonial in nature, then the starting point is that they will be divided equally between the parties.
Crypto assets now form part of many people’s financial portfolios, and therefore have been increasingly subject to financial disputes between the parties during a divorce. On divorce, courts can make orders in respect of crypto assets in much the same way as the more traditional assets. For example, a crypto holding can be transferred from spouse to spouse in its entirety or in a specific proportion by creating a separate crypto account. It is also possible for the court to order for a crypto holding to be sold and the proceeds divided.
Values for crypto assets can fluctuate enormously and therefore it is important that the values are regularly updated when addressing finances on divorce. Due to the unpredictability of such crypto assets, there is difficulty in ensuring a fair outcome and the courts are aware of this. Judges will often aim to ensure that both spouses walk away with a similar proportion of each type of crypto asset making them exposed to the same risk of loss and/or gain.
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During the process of divorce, one of the elements is the exchange of information relating to finances, known as disclosure. This is done in order to determine what a fair division of the assets will be. However, there are instances where one or both of the parties conceal or misrepresent deliberately the value of their assets. Should it be the case that certain assets are not included during disclosure, it cannot be divided, even if it’s the case that it is later discovered it is likely already be disposed of. These kinds of assets are known as hidden assets and should either party be discovered to be hiding assets, the court will take serious action against them.
All parties in a divorce are under a duty to provide “full and frank” disclosure. This means that they have to tell you about all their assets and income. Unfortunately, some wealthy spouses think that they can hide their assets – placing them under the control of companies, or moving them offshore.
Vardags are very experienced in these types of cases. Our in house forensic accountancy team can search for assets across the globe, and are experienced at understanding and unravelling complicated corporate structures.
The best way to ensure your assets are protected is to conduct a thorough and accurate valuation.
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