Divorcing Louisiana spouses may be using Bitcoin to hide assets

Baton Rouge spouses may feel hurt and angry when a marriage ends, but many never suspect an ex might try to take advantage of them. Louisiana divorce laws require spouses to divide shared assets and debt in community property agreements. The division often is an even split, unless spouses have some other legal arrangement like a prenuptial agreement.

A complete disclosure of marital assets is necessary before negotiations for distribution can take place and a property settlement is reached. Spouses who anticipate divorce often set aside funds to make the transition a little easier. There’s nothing wrong with squirreling away a divorce “cushion,” unless you try to keep assets hidden from a spouse.

Some spouses lie about marital finances and walk away from a divorce with more assets than they are entitled to have. Financial and legal advisers are aware of the methods spouses use to camouflage income and other property, especially when a business is among the assets. The latest trend in hiding property is exchanging cash for not-so-easy-to-trace Bitcoins.

Bitcoin is a virtual currency that allows anonymous Bitcoin holders to make transactions without a standard centralized bank or government. In short, transactions using the alternative currency may be hidden. However, there is a way to find out whether a spouse has converted funds into digital Bitcoins.

Assets a deceptive spouse converts often come from a traditional bank account. Clues are provided by tracking records of bank transfers. Tracing the Bitcoin trail gets harder when transactions have no record — for instance, when a spouse receives Bitcoin income through a business.

Suspicious spouses may try to investigate possible financial finagling on their own or delegate that sensitive job to an attorney or financial adviser. A fair divorce settlement requires spouses to lay all the cards on the table at settlement — not to keep an ace or two hidden up their sleeve.

Source: Daily Finance, “Bitcoin: The New, High-Tech Way to Hide Assets in a Divorce” Robert Pagliarini, Jun. 16, 2014