Family law attorneys working in Illinois may be familiar with the processes involved in dividing assets in a divorce. Cryptocurrency assets are throwing a wrinkle in the equation, making it challenging for attorneys to advise their clients on the best ways to divide assets.
One of the reasons why dividing cryptocurrency assets during a divorce can be a challenge is that the value of cryptocurrencies fluctuates drastically. While a cryptocurrency may have a value of $80,000 in November of one year, it could skyrocket into the millions a few months later. A few months after that, the value could drop back to where originally it was or lower. This rapid fluctuation in value is a real challenge when it comes to valuations. As a result, it may be necessary for cryptocurrency valuations to be carried out multiple times during the divorce proceedings.
In many divorce proceedings, asset values are determined on the date that the divorce complaint is filed. However, when it comes to passive assets, such as cryptocurrencies, many are recognizing that the date of distribution may be the more appropriate date to determine the value of an asset. This is because passive assets fluctuate wildly based on market conditions.
Another challenge in dividing cryptocurrencies during the divorce process is how easy it is for one spouse to hide cryptocurrencies from the other. The initial investment may have been made without the other spouse knowing about it. Therefore, the cryptocurrency could grow in value secretly. If the purchaser knows what they are doing, they may be able to keep this sizable income hidden.
A family law attorney may represent a soon-to-be ex during their divorce proceedings. They could advise the client on how to address issues connected to cryptocurrencies, property division as well as asset valuation. During the divorce proceedings, the family law attorney may help their client deal with any practical financial issues that come to the fore.