How cryptocurrencies are putting a new spin on divorce
Many Illinois residents have seen firsthand how challenging it can be to divide assets during the divorce proceedings. Cryptocurrencies, which were first introduced to the public in the late 2000s with the likes of Bitcoin, have only recently started to have an impact on divorce proceedings. Part of this impact has to do with an increased public awareness about the value that cryptocurrency could have. Now, family law firms are dealing with individuals who have high net worth in cryptocurrencies. They are struggling to figure out how to deal with this currency.
Part of the difficulty comes from the simple fact that many family law attorneys do not truly understand what cryptocurrency is, how it is valued and whether it can be distributed among divorcing parties. As a result, divorces where cryptocurrencies need to be valuated are taking longer and costing more.
There are two major challenges that an attorney and divorcing individuals face when trying to put a value on a spouse’s cryptocurrency savings. The first challenge is finding out whether the cryptocurrency exists and where it is stored. Because of how easy it is to hide cryptocurrency, many have referred to cryptocurrency as the new offshore banking. It has allowed individuals to invest a relatively small amount of money and end up with a massive fortune that no one knows about, no one can monitor, and no one can access.
The second challenge is determining the actual value of cryptocurrencies. An individual may have an investment in cryptocurrency that’s worth $100,000 when the divorce proceedings begin. By time the divorce proceedings end and assets are distributed, that same investment could have grown to millions of dollars.
Dealing with cryptocurrencies is just one example of unique financial issues couples face while going through the divorce process. A family law attorney may be able to assist a divorcing individual by giving them insight on how to place value on properties and accounts that they have. The attorney might explain laws for dividing properties and how joint and separate accounts should be handled during the divorce process.