As long as there has been divorce, spouses with high net worth have found sophisticated ways to try to shield their wealth from their exes.
Attorneys in Texas familiar with divorces in which complex asset valuation and division are factors know the extent to which some spouses can and do go to protect what they consider to be theirs. Strategies might include use of foreign bank accounts, offshore holdings, bearer bonds or burying ownership under multiple court layers. Conducting a reliable accounting can require a whole team of legal and financial professionals.
And now, some legal observers a new channel represents a possible challenge. It comes in the form of Bitcoin, the virtual currency of the digital age.
For readers who may not be aware, Bitcoin is an unregulated online currency that only came into being within the last few years. In the short time it has been around, it has gained a lot of traction. Some individuals use it to pay for online transactions. And, as risky as it is, trading in the currency is not uncommon.
Why it would be attractive to a spouse seeking to hide assets is easy to understand. Because it is electronic currency, it can be moved around in the blink of an eye. The online environment makes it possible for individuals to set up accounts anonymously. And it can be very difficult to tie funds to a particular individual.
There do not seem to be any cases yet of digital currencies being used as a tool to avoid property division in divorce, but one attorney in London says she knows of cases in which husbands visited online forums to explore how Bitcoins might be used for that purpose.
That being the case, it would seem to be fair to say that it will only be a matter of time before courts consider Bitcoins assets worthy of disclosure in divorce cases.
Source: CNBC, "Bitcoin could be used to hide assets in divorces, warn lawyers," Jane Croft, June 3, 2014