- It’s tempting to hide your crypto activities during a divorce to try and keep as much as possible
- Most states class crypto as an asset, meaning you must legally declare it up front
- Technically you could hide it, but it would be very hard to do and would see you break the law
It can be tempting for someone that has earned a small fortune in cryptocurrency to hide it from their spouse, particularly if the relationship is actively being dissolved. You might think that keeping your activities quiet will lead to your crypto haul not being discovered, or you might think that the nature of cryptocurrency means that you will be able to keep everything you earned. However, as a recent question to MarketWatch’s ‘Moneyist’ revealed, the reality could bite you hard.
Widow Discovered Husband’s Secret Bitcoin Haul
The question of crypto ownership was dealt by MarketWatch’s money expert yesterday after a widow discovered that her former husband had been squirreling away a crypto fortune while essentially living a double life, hiding his crypto earnings from her. After he died, she discovered that he had some $50,000 in bitcoin hidden away that he hadn’t told her about. The question was, was she entitled to half the bitcoin?
The Moneyist responded by saying that the rules can vary from state to state, but in Washington where the widow lived “everything earned during the marriage is community property” and as such she had a “strong case” that she owned half the bitcoin. The same rule would very likely apply to states that consider bitcoin as property or an asset, which is virtually all of them.
Of course if you’re dead you won’t be worried about your bitcoin holdings, but the situation is the same with divorce – whatever you acquired during the marriage is split 50/50%, with crypto, again, usually classed as an asset or property.
Don’t be Tempted to Hide To Your Crypto
Can you hide your crypto then, wait until the heat has died down, and start spending it? In theory there is nothing to stop you, but this would contravene the laws in any state that requires all assets to be laid out at the start of divorce proceedings, which is every state that offers divorce, which is all of them. Suddenly splashing the cash after a divorce might raise some eyebrows and could interest authorities if they suspect you’ve withheld the truth about your assets.
Even if you don’t go to those extremes, trying to hide a crypto portfolio during a divorce case when there could be all manner of breadcrumbs that could be uncovered by the divorce courts, it’s just not worth the risk.