Divorce and Cryptocurrency in Florida: Asset Division in the Digital Age
People have widely varying opinions on cryptocurrencies, but there is no doubt that these novel investments are emerging as significant players in financial portfolios. Cryptocurrencies, by their very nature, complicate the asset division process, and how you handle them might have serious consequences.
If you are undergoing a divorce involving cryptocurrency assets, it’s crucial to have an attorney who is well-versed in both the legal and financial nuances of these digital assets.
Whether you are seeking to secure your fair share of cryptocurrency assets or need answers on how they are handled in a divorce, the team at The Bardine Law Firm is here to provide the expert support you need. Contact us today at (727) 605-7078 or through our website to discuss your case and explore the best path forward in your divorce proceedings.
The Emergence of Cryptocurrency in Marital Assets
Cryptocurrency has become an increasingly significant component of financial assets, sometimes to the chagrin of one spouse in a relationship. In Florida, as in many other places, the rise of cryptocurrency has thrown a wrench into how we look at income, assets, and equitable distributions in marriages and divorces. Unlike traditional financial assets, cryptocurrencies like Bitcoin, Ethereum, and others offer a decentralized, often volatile investment option.
Cryptocurrency At A Glance
- Differences from Traditional Assets: Cryptocurrencies differ from traditional assets in several ways. They are decentralized, not regulated by any central authority like a bank or government, and are stored in digital wallets. Their value is highly volatile – subject to rapid fluctuations based on market dynamics.
- Rising Prevalence in Marital Estates: Couples who have invested in or traded cryptocurrencies during their marriage are now finding these digital assets as key components in their asset division negotiations. However, without decades of case law, more and more unique situations continue to arise.
- Legal Challenges in Classification and Valuation: Determining whether cryptocurrencies are marital property, assessing their fair market value, and addressing the potential for hidden or undisclosed assets are all complex issues that require careful legal and financial expertise. Never before has there been an asset as varied and volatile as cryptocurrencies found in the assets of an everyday couple in Florida.
Addressing the Volatility in Valuation
The fluctuating market value of cryptocurrencies can see dramatic changes in a short period, making it difficult to establish a consistent and fair value at any given time. Due to a lack of established standards for valuing digital currencies, couples without expert help often cannot agree on their value at the time of separation.
Methods for Cryptocurrency Valuation in Divorce Cases
- Market Value at a Specific Date: One common method for valuing cryptocurrency is to assess its market value at a specific date, such as the date of separation or a date agreed upon by both parties.
- Average Value Over Time: Given the volatility, another approach is to calculate an average value over a specific period. This method can provide a more balanced view of the cryptocurrency’s worth in a rapidly fluctuating market.
- Historical Cost Analysis: Looking at the historical cost of acquiring the cryptocurrency can also be informative if the asset was acquired at a much lower value. If the cryptocurrency was a long-term holding of both parties, this may be considered the fairest option.
- Expert Valuation: In many cases, parties may opt to enlist the services of a financial expert specializing in cryptocurrency. These experts can provide a more nuanced valuation, taking into account current and past market values, as well as factors like liquidity and risk.
Hidden Cryptocurrency Assets?
Cryptocurrency’s potential to be used for hiding assets in divorce proceedings, while theoretically possible, is strongly discouraged and fraught with legal risks. Given its digital and somewhat anonymous nature, cryptocurrencies could be seen as convenient tools for concealing wealth. However, courts are increasingly adept at handling such cases and will not look kindly on someone attempting to hide marital assets.
There is a legal obligation to fully disclose all assets, including digital currencies, during Florida divorce proceedings. Courts can use forensic financial experts to trace digital assets by analyzing transaction histories, scrutinizing tax returns for crypto transactions, and examining cryptocurrency exchange and wallet activities. If found to be obscuring your crypto holdings, courts may respond by awarding a larger share of the marital assets to your former spouse or imposing additional legal sanctions. The transparency of all assets, including digital ones, ensures a fair and equitable division during divorce settlements.
Contact A Florida Divorce Attorney Today
The Bardine Law Firm is a dedicated, experienced law firm for the modern age. Johnny Bardine stays abreast of the latest developments and legal precedents to ensure your digital assets are accurately valued and equitably divided. If you are facing a divorce involving cryptocurrency, contact us at (727) 605-7078 or through our website to discover your options.