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Should you watch out for digital wallets?

On Behalf of | Oct 14, 2022 | divorce | 0 comments

Dealing with asset division in divorce is already a sticky subject. Things only get more complicated in the event that someone attempts to hide assets.

These days, more people turn to their digital wallets to do so. But how do digital wallets aid in asset hiding, and what can people keep an eye out for in these situations?

How digital wallets work

CNBC discusses the use of digital wallets in divorce. Digital wallets are used to store digital assets, which can include anything from credit or debit cards to cryptocurrency like bitcoin.

People typically use their digital wallets to make purchases online. Sometimes, people can also use them to grow their finances through the buying, trading and selling of cryptocurrency.

Until recently, many people outside of the community did not even know about cryptocurrency. However, it has recently attained such a level of popularity and commonality that even the IRS began to tax digital currency.

Hiding assets with digital wallets

When attempting to use a digital wallet to hide assets in divorce, a person will typically transfer non-digital assets like cash into digital assets like bitcoin. They then keep this money inside their digital wallet with the hopes that their spouse will forget to check. In some cases, their soon-to-be ex may not even know they have a digital wallet in the first place.

After the divorce gets finalized, they will either transfer those digital assets back, or they will continue to attempt to grow their finances through digital currency trading.

Regardless of how they go about it, attempting to hide assets is illegal and any spouse suspicious of it can take action to find more evidence.