When Illinois couples get a divorce, they may need to divide property such as retirement accounts, art collections, and a home. One of them might also have a bitcoin account. This cryptocurrency used to be little-known and not worth much, but as its value increases, it might start to have an effect in these situations.
However, the role of bitcoin in property division also raises other issues. One is about concealing assets. Some websites encourage people to hide bitcoin assets during a divorce, and it would be difficult to trace this activity.
Other questions are raised about how to value and distribute a bitcoin account. Even if a person is forthcoming about an account's existence, it may be unclear whether the account's value should be assessed at its purchase price or at the current value. Furthermore, there might also be different options for distributing the bitcoin. A person might choose between getting a lump sum distribution or taking a percentage over a fixed period of years.
Dividing property in a divorce may be a difficult process whether or not bitcoin is involved. There could be complications in assessing the value of other types of assets, and some property might carry emotional weight as well. For example, a person might struggle with the idea of giving up the home. This could be particularly true for a custodial parent who feels the home would be a more stable place for the children. However, it is important to understand that the home could depreciate in value or that the upkeep, taxes, and insurance as well as the utilities in a family-sized home might be hard for a person on a single income to manage. On the other hand, there could be taxes and penalties associated with withdrawals from a retirement account that reduce its value.