In community property states like Texas, divorce lawyers assist their clients account for and disperse all marital property according to state law.
Dividing up physical property and even most financial assets is easy; however, now that cryptocurrency has entered the picture, divorces are getting more complicated.
Divorce attorneys are realizing that because of bitcoin’s very definition of being a digital-only asset, splitting it up isn’t the problem - finding it is!
Cryptocurrency An Issue In A Growing Number of Divorces
Though it is an idea that has only gained traction in recent years, there are estimated to be as many as 22 million Americans invested in cryptocurrency in one form or another.
As the popularity of bitcoin continues to grow, divorce lawyers are increasingly finding it becoming an issue in the divorces cases they oversee.
The reason is that bitcoin is not just easy to purchase; it is also easy to hide from spouses.
Due to the dramatic increase in its value over recent years, divorce attorneys now find that it has also become a cause for much contention between divorcing spouses.
Crypto Considered Community Marital Property
Divorce lawyers gaining the most experience dealing with the crypto issue in their cases can easily see that the issue lies in the fact that previously, not many people took bitcoin seriously, yet now those who own it are holding small fortunes in some cases.
Combined with the fact that bitcoin, which is accepted to be legal currency in Texas, is considered part of a couple’s marital wealth and subject to the state’s community property laws, suddenly attorneys see it becoming a hot point of dispute between many spouses.
Commonly, many do not even know their spouse invested in cryptocurrency and yet are still legally entitled ;to a portion of the collected cryptocurrency.
Because crypto is managed in virtual wallets as opposed to banks, stock brokerages, or in other regulated ways, the ability of locating, valuing, and dividing it is becoming a major issue in many divorces these days.
Hiding Crypto Is Easy - Finding It Is the Challenge
The biggest difficulty in dealing with cryptocurrencies during divorces according to many divorce lawyers is that there are not always ways to prove that someone owns it without doing extensive digging.
Beyond there being an initial purchase transaction from a bank account, cryptocurrency initially loaded into one virtual wallet can be easily moved to other wallets without a trace.
It can be hidden virtually or on personal devices and when it is mined as opposed to being purchased, it can be even more difficult to locate.
This non-traceability is what makes it a preferred currency for hiding assets.
In cases where the possibility exists that a spouse could be hiding crypto, divorce attorneys must frequently resort to enlisting the aid of forensic accountants and court orders to help.
When there is no suspicion that assets might be hidden and no reason to consider the ownership of bitcoin, some spouses are even able to get away without splitting off their ex's fair share.
On top of those issues, valuation is yet another concern, as the values rise and fall within minutes on any given day.
Being just as if not more volatile as stocks, determining value once a wallet is found can create additional disputes and require additional expert assistance.
Cryptocurrency Issues Needs An Experienced Divorce Attorney
The popularity of cryptocurrency is on the rise and with it, divorce lawyers are seeing an increase in disputes over it.
It has even been the focus of some very prominent divorce cases in recent years.
Bitcoin and other types of crypto are legal currencies in Texas and are subject to marital property division just like any other currency.
Anyone who has reason to believe their spouse owns or could be hiding any cryptocurrency should speak with a divorce attorney who is current on this topic of growing importance and can offer the solutions required to get to the bottom of that crypto wallet!
Schreier & Housewirth Family Law
1800 West Bowie Street, Suite 200-E
Fort Worth TX 76110
Gregory L. Housewirth is a Board-Certified Family Law Specialist practicing in Fort Worth Texas. With 30 years of family law experience, Mr. Housewirth has represented hundreds of clients in divorce, custody, CPS, modification, and grandparent cases. In addition, Mr. Housewirth is a qualified family law mediator and a member of Collaborative Law Texas, a practice group dedicated to promoting collaborative divorce in Texas.