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Bitcoin can negatively impact property division process

Many New Jersey readers are aware of Bitcoin, even if they are unsure of the exact purpose and scope of the service. Bitcoin is a cryptocurrency provider, which means that the company offers account holders a platform through which to store and transfer money with a high degree of anonymity. While there are a number of legitimate reasons why an individual would have a Bitcoin account, the service also appeals to those seeking to shield assets from the property division process.

Bitcoin users set up an account with the company, often linking to their personal or business bank accounts. From that point forward, users are able to transfer funds directly to their Bitcoin account. For spouses seeking to hide assets, transfers are often made in varying amounts over a lengthy period of time. That reduces the chance that one's partner will notice the missing funds.

When successful, these actions result in a significant "nest egg" for the spouse who made the transfers. For the other party, however, the end result is the removal of assets from the property division "pot." This is both unfair and a violation of divorce law that requires full disclosure of all marital wealth.

For those in New Jersey who are concerned that their partner may have actively concealed wealth using Bitcoin or a similar service, immediate action is necessary. Spouses should seek the services of a forensic accountant who will be able to review the family's financial records and look for areas of concern. Documenting cryptocurrency actions can have a great deal of impact on the property division process.

Source: The Huffington Post, "Hiding Assets with Bitcoin in Divorce", David Centeno, Feb. 23, 2017

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