BEWARE: DISCLOSURE OF DIGITAL ASSETS IN NEW YORK IS NOT ADDRESSED IN THE 2016 REVISION OF THE OFFICIAL FORM STATEMENT OF NET WORTH: PART ONE
H. Michael Stern, Esq., a New York matrimonial and family law attorney and mediator with over 30 years of experience suggests that New York residents, where appropriate, one should strongly consider digging deeper, beyond the four corners of the Statement of Net Worth, for digital assets.
The official form of the Statement of Net Worth was updated in 2016. Each party in a contested matrimonial action is required to serve and file a Statement of Net Worth with the Court. It is mandatory financial disclosure in all contested cases. In many cases that are settled out of court, attorneys use the Statement of Net Worth as a representation under oath of the net worth of each party to the settlement. There is one class of assets that is omitted from the latest version of the official form. This may result in such assets being overlooked at trial or in a settlement. That class of assets are digital assets, assets which are intangible and exist only in electronic media. As there is no standardized definition yet of digital assets that is all inclusive (to my knowledge), I shall address some (but not all) digital assets in this blog which should be considered by divorcing parties and their attorneys.
The first example is the Bitcoin. I am not a mathematician, but here is a simple definition and it is unofficial. It is highly encrypted digital currency that is exchanged without any financial institution acting as an intermediary. If you believe this definition to be to simplistic, there are many online resources which define and explain Bitcoins and how they work.
The Statement of Net Worth deals with “Cash” and “Checking” and “Savings” accounts. The Bitcoin does not fit into any one of these categories. Omission of assets on a Statement of Net Worth can result in substantial penalties in New York matrimonial actions. Yet, some assets elude detection. Many highly trained forensic accountants and forensic data investigators would be hard pressed to track down Bitcoins, unless there is a financial trail leading into the Bitcoin purchase on the purchaser’s computer, tablet or mobile phone. Preservation and access to the unaltered computers and internet devices of the offending party become a necessity if Bitcoin purchases are suspected. The ways to elude detection go far beyond the scope of this blog. As I will NEVER assist any prospective client in perpetrating a fraud on the Court or the other party, it does not pay to ask me how this is done! Much has been written on data and computer preservation in divorce cases, but that is not the purpose of this blog.
The purpose of this blog is to discuss the potential concealment of the Bitcoin in divorce cases. If you are a middle to high net worth party in a divorce case, your attorney must be familiar with these concepts.
I have undertaken continuing education in this area. Focusing on the needs of the client and the results sought have always been a hallmark of my Long Island practice for more than 30 years.
Feel free to contact me, H. Michael Stern, Esq.,a Long Island divorce and family law attorney, if you are interested in discussing your matrimonial, divorce or family law matter at firstname.lastname@example.org or by phone at 516-747-2290.
My office is conveniently located in Nassau County adjacent to the Roosevelt Field Mall ring road at 666 Old Country Road in Garden City, Long Island, NY.
Written by, H. Michael Stern, Divorce Lawyer & Mediator