The courts in England and Wales are not tolerant of those who attempt to hide assets on divorce. Full and frank disclosure of the financial positions of both parties is required to enable a fair settlement to take place, and the expectation is that this will be something that the divorcing couple adheres to. However, there are many examples of divorcing couples where one partner has attempted to hide assets – and in the digital age in which we now live this asset hiding has evolved.
Form E is completed by both parties in divorce and is designed to set out a full picture of financial circumstances. It requires information about debts and assets, as well as income, and goes into some detail. Form E also has a statement of truth, which means that it can be used as evidence in a court of law.
Why is bitcoin different?
Cryptocurrencies, such as bitcoin, are both anonymous and virtual, which means that it's much more difficult to include them in a Form E. There are no accounts or statements to disclose and cryptocurrencies are never in physical form. Transactions that use bitcoin require only the owner’s ID to be processed. While it might be easier to trace bitcoin at the point at which they are used or redeemed, the rest of the time cryptocurrencies like bitcoin simply sit in a virtual wallet and are almost impossible to trace.
The problem with PayPal
PayPal is not a traditional bank account and yet it’s possible to transfer large sums of money to be held in a PayPal account for future use. PayPal is more traceable than bitcoin and other cryptocurrencies because it is linked to a traditional bank account or credit card. However, the risk with PayPal is that it’s still not something that is commonly used, especially by older generations, and unless it’s declared it could remain completely under the radar when it comes to declaring assets.
Why is asset hiding damaging?
It can damage relations between divorcing couples, something that is particularly challenging where there are children involved. The loss of trust caused by asset hiding can leave two exes completely at odds. It could also potentially affect any settlement that has been agreed. If it’s later found that asset hiding has taken place then the courts are often willing to overturn an existing settlement, even after it has been agreed to take account of the change in circumstances. Because asset hiding interferes with the court’s ability to make a fair judgment it can also be viewed as a conduct issue that may impact negatively on any future settlement.
What’s the solution?
Working with good legal representation will ensure that it’s made clear to all involved, from the start, that asset hiding won’t be tolerated, whether physical or digital assets are involved. A legal advisor will also provide support when it comes to following up any suspicions of asset hiding with information requests and, if necessary, disclosure orders.
For further advice please call 01524 386500.