Words like “Bitcoin,” “Ether,” and “Dogecoin” were completely foreign to the general public until approximately ten years ago. Since its inception, cryptocurrency has surged in popularity. Some estimates put the total value of the top ten cryptocurrencies at $1.2 trillion. If your spouse has invested in cryptocurrency and you plan to divorce, you may be entitled to a share of the currency’s value. Unfortunately, the mutable nature of cryptocurrency makes it hard to value in a divorce. Even more importantly, cryptocurrency is not stored in a bank like traditional forms of currency which makes it a popular vehicle for hiding assets in a divorce.

Underreporting Digital Currency in Divorce Case

When two spouses divorce in Illinois, an important part of the process involves both spouses disclosing their property, debts, and other financial information. The spouse’s financial circumstances influence everything from child support to property division. Consequently, lying on the financial disclosure forms by failing to disclose Bitcoin or other digital currency can dramatically impact the case’s outcome. If you or your spouse own cryptocurrency, it is important to work with a divorce attorney who has experience handling complex assets such as digital currency. If you suspect that your spouse is hiding some digital assets, your attorney may suggest working with a forensic accountant. The accountant can search for clues that point to undisclosed assets and income.

Understanding Ownership and Digital Currency

In Illinois, marital property includes assets that either spouse acquired during the marriage. This includes cryptocurrency. If your spouse purchased cryptocurrency with marital funds, you are entitled to an equitable share of the cryptocurrency’s value. You may decide to split the currency between you and your spouse, or you may offset your spouse’s cryptocurrency by taking assets of similar value. Of course, when addressing cryptocurrency in a divorce, one of the hardest questions to answer is how much the crypto is worth. Divorce cases can take several months or a year or longer to resolve, and the price of Bitcoin can vary wildly during that time. There may also be significant tax implications associated with Bitcoin and other cryptocurrencies.

In today’s world, it is increasingly common for couples to handle the divorce process collaboratively and amicably, without significant intervention from the court. This can work well when there are few conflicts or intractable disagreements that get in the way of negotiation, but there are other scenarios in which trying to resolve a divorce without litigation is simply too dangerous. One common example is a situation in which one spouse is not being honest with the other as their marriage is coming to an end. When many people think of deception in a marriage, they think of affairs and cheating, but there can also be a financial side of deception in the form of hidden assets.

Hidden Assets and Revenue

When a spouse attempts to hide assets before or during the divorce process, they usually do so in an effort to prevent them from being considered as part of the marital estate, and therefore subject to division in the divorce. This puts the other spouse at a major disadvantage unless they can work with an attorney to discover that the hidden assets exist and take legal action to rectify the situation.

There are several warning signs that your spouse might be hiding assets, including but not limited to:

Negotiating the division of property in a divorce begins with identifying the properties that you and your spouse own. Marital properties are the ones that you will equitably divide between each other. Non-marital or separate properties belong to only one of you, though knowing their value is relevant when deciding on financial matters in your divorce. You and your divorce attorney will at times need to cooperate with your spouse to obtain records on your marital and separate assets. However, spouses sometimes hide valuable assets during divorce so that they do not have to share them or to make it appear that they have fewer financial resources. Hidden assets can skew the financial balance of your divorce agreement, and you need to work with your attorney if you believe that your spouse may have hidden assets.

What Are You Looking For?

Hidden assets can be secret financial accounts or luxury items that your spouse is holding in a place that you are not aware of. A spouse can more easily hide assets when they own a business or are the only one who manages their marital finances. If you are unsure whether your spouse has hidden assets, you can start by obtaining copies of their income tax returns or loan applications. In those documents, you are looking for:

• Unidentified assets
• Unexplained transactions
• Discrepancies between the income they told you and the income they reported

If your attorney finds suspicious information, they may trace it to a separate bank account or discover that the assets were temporarily transferred to another person.

Many couples going through a divorce will agree to sell their marital home rather than deciding on which one of them will keep it. The size and cost of the house may be impractical for one person, and including the house in the division of property can make it more difficult to equitably divide the properties. By selling the house, the divorcees can more easily divide the money that they receive from the sale. However, what can you do if your spouse will not agree to sell your house? You may have legal remedies that will allow you to sell your home, depending on whether your spouse is being unreasonable in obstructing the sale.

Reasoning

Before trying to force the sale of your marital home, you should consider why your spouse is objecting to the sale. They may have a good reason for not wanting to sell the house or wanting to wait before moving forward with the sale:

• They may want to settle other financial issues related to the divorce so they will know whether they can still afford the marital home.
• They may be trying to avoid uprooting your children during the school year.
• They may have a personal connection to the house if it belonged to a relative.
• They may believe that you need to make renovations to the home before selling it.
• They may believe that the housing market will become more favorable if you wait.

Your spouse may also try to prevent the sale for impractical reasons, such as wanting to delay having to move out or being spiteful towards you.

You and your divorce attorney will spend much of the process going over your finances to determine how you will divide them with your spouse. Your attorney needs official documentation to have accurate financial information and know if your spouse is telling the truth during negotiations. While your attorney is skilled at finding these documents, you can save yourself time and legal expense by providing them yourself. You can anticipate that your attorney will need several documents during your initial meetings about your divorce:

1. Proof of Income: How much money you and your spouse make will determine the division of child support and whether spousal maintenance will be awarded. Copies of your and your spouse’s recent check stubs will show your regular pay and how much money you have earned this year. Recent income tax returns will give a larger picture for the last several years. You may need other financial records if you or your spouse are self-employed, such as check registers and bank statements.
2. Financial Statements: Speaking of bank statements, you will need statements showing the current balances of financial accounts, both shared and individual. You will divide the money from your joint checking and savings accounts, as well as any joint investments, such as mutual funds, stocks, and bonds. Individual investments, such as retirement accounts, can be subject to division if they were accrued during your marriage. It is also wise to know your spouse’s non-marital financial assets, which are part of their total worth.
3. Property Records: You should have the contracts for any major properties you purchased during your marriage, such as the deed to your home and the titles of your vehicles. You should also present any statements related to loan payments on these properties, such as your mortgage. These records will help your attorney determine the actual value of these properties and whether one of you has a stronger claim to a property.
4. Debt Statements: Spouses divide their debts during their divorce, just as they divide their assets. Besides the previously mentioned property loan statements, you should present statements for any other debts, such as credit cards, medical bills, or bank loans.

Contact a McHenry County Divorce Lawyer

Providing all of these documents will give your attorney a head start in preparing for your divorce. At Botto Gilbert Lancaster, PC, we know that the search for financial information does not stop there. A Crystal Lake, Illinois, divorce attorney will thoroughly search for any hidden or overlooked assets from your marriage. Schedule a free consultation by calling 815-338-3838.

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