Earlier this month, news sources reported that cryptocurrency is now an asset subject to distribution in divorce… in South Korea. While your divorce likely won’t be adjudicated using the laws of South Korea, this new development half a world away is still a significant reminder that digital assets like crypto are an ever-increasing portion of married couples’ asset portfolios and, in Maryland, they are (and have been for several years) subject to equitable distribution in a divorce in this state. If you have questions about your digital assets and equitable distribution, be sure to seek out answers you can rely on by talking to an experienced Maryland divorce lawyer.
In Maryland, we have the Marital Property Act. That statute says that all marital property is subject to equitable distribution. That includes digital assets like Bitcoin, Ethereum, Tether, and other forms of crypto, but these assets present some unique challenges in a divorce. Two of the biggest are: finding it and valuing it.
Let’s tackle the latter first. Valuing crypto is inherently complicated because crypto’s value is much more volatile than other assets. Take Bitcoin, for example, which went from 62,800 to below 32,000 to 52,700 to 42,100 to 67,000… in a span of just seven months in 2021. This rapid and radical shifting can make pinpointing an accurate value of your (or your spouse’s) crypto assets particularly problematic.
One way to avoid these challenges is to work out an agreement. If you and your spouse share 10 Bitcoins (current value <$900,000 US,) and you agree that each of you will leave the divorce five Bitcoins, then that could circumvent the need to do the sort of deep dives into the Bitcoins’ value that would be necessary if one spouse were to receive all of the Bitcoin assets, given that 5 Bitcoins = 5 Bitcoins, regardless of the Bitcoins’ value.
The Peril of Hidden Assets
The other, often thornier, problem is finding all digital assets subject to equitable distribution. Crypto is generally not stored in a bank (either brick-and-mortar or online) and can be housed as discretely as simply on a portable USB (flash/thumb) drive. Crypto purchases/sales/trades are not documented to the same formal degree as banking or investment transactions, making it much easier to offload crypto without creating the sort of hardcopy or electronic paper trail that a sale or gift of something like, for example, stocks would.
Depending on how much crypto you think your spouse may be hiding, your divorce case could benefit from forensic accountants or other specialized experts who deal with crypto. Blockchain experts, for instance, can do in-depth investigations across multiple platforms to see if your spouse has hidden digital wealth.
Additionally, if your spouse tried to hide crypto by giving it away – perhaps to a paramour – that could constitute “dissipation of marital assets.” If the judge in your case concludes that your spouse dissipated marital assets, that finding could entitle you to a greater chunk of the equitable distribution or a larger monetary award.
Digital assets like crypto are just one example of how the parameters of divorce and equitable distribution are always changing. Divorces involving digital assets can be highly complex, presenting an especially high need for skilled legal counsel. If you are considering (or going through) divorce and have questions about equitable distribution, get in touch with the knowledgeable Maryland family law attorneys at Anthony A. Fatemi, LLC. Our team is here to do what is needed to ensure you get a fair share of your marital assets. Contact us today at 301-519-2801 or via our online form to set up your consultation.