How Can Cryptocurrency Be Divided in an Illinois Divorce?

 Posted on May 27,2022 in Chicago divorce attorney

At least one in ten American adults currently owns cryptocurrency and that number is only expected to rise. Making payments using cryptocurrency is easy, inexpensive, and difficult to track - making cryptocurrency an ideal payment method for a variety of reasons.

Because cryptocurrency ownership is on the rise and divorce rates are still hovering around 50 percent, an increasing number of Illinois divorces will handle cryptocurrency as part of the marital asset division process. Like any other marital property, cryptocurrency must be divided fairly; however, the volatility of the cryptocurrency market and the ease with which cryptocurrency can be hidden can introduce significant challenges to the division process.

How Do I Know My Spouse is Telling the Truth About Our Cryptocurrency’s Value?

Spouses commonly divide household chores and when one spouse handles all or most of a family’s financial affairs, the other spouse may not be aware of the full value of their marital property. Although each spouse must create a financial affidavit under oath that discloses their full financial picture, people are not always completely honest.

Cryptocurrency is considered cash equivalent and must be disclosed on a financial affidavit, both to the divorce court and to each spouse’s attorney. Inaccuracies on a financial affidavit, whether intentional or mistaken, can cause punishments including being held in contempt of court. If your spouse has filled out their financial affidavit and you still suspect they are being dishonest about their cryptocurrency holdings, your attorney may need to subpoena records from cryptocurrency exchange companies where your spouse has bought or traded cryptocurrency.

How Do We Divide Cryptocurrency?

Because cryptocurrency markets are volatile and spouses may have owned some or all of their cryptocurrency before they got married, it can be very difficult to determine what portion of a cryptocurrency “coin” is marital property, what it is worth, and how it should be divided. The best option for spouses who trust each other or who both know their cryptocurrency’s value is to agree outside of court about an asset division settlement.

If this is not possible, couples may need to cash out cryptocurrency or pick a date and declare the cryptocurrency’s value. Once there is a firm value, spouses can negotiate over cryptocurrency and decide whether to keep it, sell it, or trade it in exchange for other marital assets. While the cryptocurrency market has tended to increase in value, it is likely not a good idea to trade extensive marital property with inherent value - such as a home or cash savings account - for cryptocurrency that could collapse in value at any time.

Contact a Geneva, IL Marital Property Division Lawyer

Dividing your marital property fairly is essential for protecting your financial interests now and in the future. If you are dealing with complex asset division issues, contact an experienced Kane County asset division attorney with the The Law Office of Matthew M. Williams, P.C.. We are committed to helping every client negotiate a favorable divorce agreement that takes their unique financial circumstances and future goals into careful consideration. Call us today at 630-409-8184 to schedule an initial case review at our Aurora offices.

Sources:

https://www.pewresearch.org/fact-tank/2021/11/11/16-of-americans-say-they-have-ever-invested-in-traded-or-used-cryptocurrency/

https://www.insiderintelligence.com/insights/us-adults-cryptocurrency-ownership-stats/