How Is Cryptocurrency Treated In A Florida Divorce?
In 2020, the Florida Supreme Court implemented revised disclosure rules relating to financial disclosures made during divorce. According to the new rules, parties in any family law case are required to disclose any virtual currency transactions that occurred within the past 12 months. The new rules require spouses to further provide a listing of all current cryptocurrency holdings. The updated requirement was necessary after it became apparent that more Americans were investing in cryptocurrency regularly.
In Florida, which is an equitable distribution state, the marital estate is divided during divorce. Assets that were acquired during the marriage are considered a part of the marital estate. That means that if one spouse purchased cryptocurrency during the marriage, that cryptocurrency would be subject to equitable distribution under the state’s rules. In other words, cryptocurrency is treated the same way as any other asset.
Complications related to cryptocurrency
Generally speaking, banks and investment brokerages don’t handle cryptocurrency. Instead, transactions are made with digital wallets, and it’s more difficult for an attorney to track down cryptocurrency holdings than traditional investments. Uncovering recent transactions and holdings can, therefore, be problematic during a divorce. This is especially true when one spouse is attempting to hide assets from the other. This puts pressure on attorneys to look for signs of digital currency transactions and address the issue with their clients.
Attorneys will have to look at banking records for unexplained transfers or spending. They can also review how a party purchased items. Forensic accountants can be vital here. They can pull data from personal devices and computers to find evidence of cryptocurrency transactions. A forensic accountant may be able to gain access to a digital wallet to uncover the holdings.
Equitable distribution and the marital estate
While the new rules require that spouses disclose their cryptocurrency holdings during a divorce, that doesn’t necessarily mean that they will. In many cases, lawyers have to search for those holdings to ensure their client is fairly compensated during the divorce.
Any acquisition that was made during the marriage is technically considered a part of the marital estate. That means that asset would be subject to equitable distribution under Florida’s rules. Transactions that were initiated prior to the marriage or after the divorce was initiated are considered the separate property of one spouse. However, transactions that occurred in the last 12 months are reviewed by the court to determine whether or not the asset is a marital or personal asset.
If a spouse initiated the crypto transaction during the marriage, it is likely that the cryptocurrency is the property of the marital estate. That means it’s subject to be divided during asset distribution.
Talk to an Orlando, FL Divorce Lawyer Today
If you suspect that your spouse is holding cryptocurrency or otherwise hiding assets, you will need an experienced family law attorney to ensure that you are properly compensated during the divorce. Greater Orlando Family Law has decades of experience helping Orlando couples during contested divorces. Call our Orlando family lawyers today to schedule an appointment and learn more about how we can help.
