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Can Bitcoins be used by parties to hide assets in a divorce?

Florida residents who are about to get a divorce should be aware of the possibility that their soon-to-be ex could potentially hide assets from court disclosure using Bitcoin. Bitcoin is the latest internet rage to hit the scene. It is essentially a form of Internet currency -- digital currency that can be used to make purchases. But unlike regular currency, it does not require access to banks or even governments for that matter. Thus, it can be easily used to obscure a person's assets since it can prove quite difficult, but not impossible, to track.

Most states require each spouse filing for divorce to submit detailed income and financial assets and liabilities disclosures to the court in order to get an accurate snapshot of each party's finances.

These forms typically require a detailed listing of all cash, vehicles, checking and savings accounts, real estate, bonds, jewelry, stocks and other assets. If a person holds Bitcoins or uses Bitcoins in any transactions, then they normally would be required to list all Bitcoins transactions or holdings under the other assets category.

However, it is quite easy for someone who doesn't plan on being completely forthright with the court about the nature of their assets to systematically convert cash or other assets into Bitcoins before a divorce financial inventory filing and not report it in order to conceal it from the court.

Bitcoins can make it easy to conceal assets because beyond the initial bank transfer required to convert cash to Bitcoins it would be hard to track the money trail, especially if the Bitcoins where held outside of the United States. Another Bitcoin avenue that can be misused for concealing finances is if one's spouse runs a business that accepts Bitcoin transactions.

In any divorce, parties may be tempted to conceal and not disclose all their income, and assets. However, it is very important for all parties involved in divorce proceeding to do their utmost to be forthcoming. Divorce is not an easy process, but one need not make it more difficult than it needs to be. When it comes to financial matters, property division and more, parties may want to enlist the help of a family law attorney to make sure all formalities are met.

Source: Daily Finance, "Bitcom:The New, High-Tech Way to Hide Assets in a Divorce," Robert Pagliarni, June 16, 2014

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