When you’re getting divorced, or even if your marriage is strained and you are only considering getting divorce, one thing you want to monitor is how your spouse is maintaining your financial assets. Some spouses will hide assets. Though the separation and divorce process has mechanisms to force both parties to engage in financial disclosures, much of this relies on self-reporting and the good faith participation of you and your spouse. While you are supposed to disclose all the assets that you have acquired throughout the marriage, some people are not always as forthcoming as they should be. Hiding assets is one trick a party may use to keep those assets from a former spouse.
One way that people have been doing this in recent years is by investing in cryptocurrency. This is somewhat of a risk since the market is so volatile, but it is also very extensive and unregulated. This can make it incredibly hard to track down the funds, much less discern their current value.
Additionally, the cryptocurrency wallets, which essentially “hold” cryptocurrency assets and the data to access the same, are all based online and many of the servers are located overseas. This creates an easier way for some spouses to hide money, especially when their significant other has no idea that they’ve even invested in cryptocurrency and probably won’t miss the assets if they’re not disclosed.
So what should you do?
To uncover these assets, you usually have to look at where they came from. For instance, your spouse may have had to initially fund their account on an international server by transferring money directly from your bank account. There may be information about past cryptocurrency acquisitions and sales on prior joint tax returns. Identifying suspicious transactions on your financial records is a good way to begin tracing from where money originated, and to where it may have been headed. You may not know that they have a cryptocurrency wallet and you may not know what they’ve invested in, but the first step could be discovering that transaction. After that, you can begin looking into where the money ended up and how much it is now worth. Crafting comprehensive discovery requests as part of your divorce case can also help disclosures.
This is just one way that people will often try to hide assets during a divorce. Be sure you fully understand all of your legal options.