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Crypto Assets and Divorce

Posted on by Lara Davies

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Crypto Assets and Divorce

By Lara Davies on October 29, 2024

Cryptocurrency and Divorce: What You Need to Know

With the surge in cryptocurrency’s popularity, it’s no surprise that crypto assets are becoming a key consideration in divorce settlements. As of 2024, over 23,000 different cryptocurrencies exist with a total market value exceeding £808 billion. This growth means that many divorcing couples are now facing questions about crypto’s role in their financial agreements. Here’s what you need to know if digital assets like Bitcoin or Ethereum are part of your marital assets.

 

What Are Crypto Assets?

Crypto assets, often known as digital currencies, are forms of electronic money using blockchain technology. Unlike traditional currency, which is controlled by banks and governments, crypto operates in a decentralised system. This means it is peer-to-peer and not subject to central authority oversight. Well-known cryptocurrencies include Bitcoin and Ethereum, but there are thousands of others in circulation.

While crypto assets are a modern form of money, they are recognised as items of value that can be owned, transferred, and therefore included in divorce settlements, much like other financial assets.

 

 Are Crypto Assets Considered in Divorce Settlements?

Yes, crypto assets are treated similarly to other financial assets in the UK. Divorce law requires both parties to disclose all assets during financial proceedings, including any cryptocurrency holdings. Under English and Welsh law, this “full and frank” financial disclosure ensures that all assets are accounted for when the court or negotiators divide the matrimonial estate.

The valuation of these assets can be a bit trickier than traditional holdings due to their volatility, but nonetheless, they form part of the marital assets to be divided.

 

How Are Crypto Assets Valued in Divorce?

Given the rapidly changing value of cryptocurrency, determining an accurate valuation can be challenging. Unlike more stable assets, like property or cash, crypto values can fluctuate greatly over short periods. For instance, a cryptocurrency may be worth thousands of pounds one day, only to drop significantly the next.

To determine the value of crypto assets, one would multiply the quantity held by the current market price. Given this volatility, timing is essential to ensure a fair valuation in settlement negotiations. This is especially important when accounting for potential tax liabilities, as gains from the sale of cryptocurrency could incur significant capital gains tax if the asset has appreciated since purchase.

For further reading on cryptocurrency’s role in financial settlements, you might explore this scholarly analysis on digital assets in divorce (1) and this in-depth review of cryptocurrency and UK tax considerations.

 

 Dividing Crypto Assets in a Divorce Settlement

There are a few ways to divide crypto assets in a divorce:

1. Transfer of Ownership: The court may order one spouse to transfer part or all of their crypto holdings to the other. This may require setting up a new wallet for the receiving spouse, ensuring that both parties retain a stake in the asset.

2. Liquidation and Division: Another option is to sell the crypto assets and divide the proceeds. However, the timing of such sales is critical given market volatility, which may affect the final settlement amount.

3. Offsetting with Other Assets: Some couples may agree to offset the value of cryptocurrency against other assets, such as property or savings, to simplify the division process. In this case, it may be wise to use an average value of the crypto over a period rather than a specific day to account for volatility.

 

What If Crypto Assets Are Hidden?

Full disclosure is essential in divorce cases, and this applies to cryptocurrency. If you suspect your spouse is hiding crypto holdings, you can take several steps:

Review Financial Transactions: Look for any transfers to crypto exchanges like Coinbase or Binance.
Forensic Investigation: Engaging an expert to analyse your spouse’s financial transactions can reveal concealed assets or irregularities.
Court Orders for Disclosure: If you can demonstrate that your spouse may be hiding assets, the court can order further disclosure, potentially from third-party exchanges, to verify holdings.

If a judge suspects assets are hidden, they may adjust the final settlement to account for any potential undisclosed crypto.

 

Protecting Your Crypto Assets in Divorce

If you are the crypto holder, transparency is crucial. Keeping a clear record of all transactions can protect your investments and avoid accusations of hiding assets. This includes the date of each transaction, the amount, and its current value. Seeking professional advice to understand the implications of disclosing and valuing these assets will help secure your position and ensure a fair outcome.

 

 Final Thoughts

Crypto assets are becoming an integral part of many divorce settlements. As such, they require careful consideration to ensure both transparency and fairness. Working with experts—both legal and financial—can be invaluable in navigating these complex assets. If you suspect significant crypto holdings are being concealed by your spouse, taking action early can ensure that these are accounted for, leading to a more balanced settlement.

 

Ready to discuss your situation with an expert?

Cryptocurrency can add complexity to divorce proceedings, but you don’t have to face it alone. Our specialist team at OLS Solicitors is here to help. Whether you’re starting divorce proceedings or simply looking to understand your rights, contact us today for tailored advice that takes the stress out of dividing digital assets.

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    The Importance of Prompt Financial Settlements in High-Net-Worth Divorces: Expert Advice

    Posted on by Lara Davies

    OLS Solicitors Blog

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    The Importance of Prompt Financial Settlements in High-Net-Worth Divorces: Expert Advice

    By Lara Davies on September 9, 2024

    Divorce is a challenging experience, particularly for high-net-worth individuals (HNWIs) who must navigate complex financial settlements. According to Lara Davies at OLS Solicitors, delaying the settlement process can have serious financial and emotional consequences. For those with significant assets, seeking prompt and thorough legal advice is crucial to minimise risks like asset dissipation, tax complications, and adverse changes in circumstances.

    1. Risk of Asset Dissipation

    One of the primary concerns during delayed settlements is the dissipation of assets. With more time, a spouse could attempt to hide, transfer, or devalue assets, complicating the division process. For HNWIs, this could involve intricate asset structures such as businesses, property, or offshore accounts. If these assets are transferred or concealed, it becomes difficult and expensive to recover them.

    Lara Davies advises initiating financial disclosure early on to mitigate this risk. Full financial disclosure ensures both parties understand the extent of their wealth and helps prevent the possibility of concealed assets. You can read more about how full disclosure is essential in protecting assets during divorce in this article from OLS Solicitors.

     2. Changes in Financial Circumstances

    Another risk of delaying settlements is the potential for significant changes in financial circumstances during the divorce process. This can happen if one spouse experiences a sudden financial windfall, such as receiving a large bonus or inheriting substantial wealth. While seemingly advantageous for one party, these changes complicate settlement negotiations as the other spouse may feel entitled to more, leading to drawn-out disputes and costly legal battles.

    Additionally, economic factors such as property market fluctuations or exchange rate changes can affect asset values. Delayed settlements expose individuals to these uncertainties, which may alter the terms of an originally fair agreement. To avoid these issues, it’s important to act swiftly. For more on how economic factors influence divorce settlements, check out this expert guide.

     3. Tax Implications of Delayed Settlements

    Tax consequences are another critical consideration for HNWIs during divorce. Specifically, capital gains tax (CGT) can come into play if asset transfers occur in different tax years. If settlements are delayed and assets like property or shares are transferred after the tax year ends, CGT may be applied, reducing the overall value of the divided assets. This tax liability can have a substantial impact, especially if proper tax planning is not carried out.

    High-net-worth individuals often have complex financial structures, including trusts, offshore accounts, and private businesses. A timely settlement helps avoid unnecessary tax liabilities and ensures that assets are divided efficiently. To learn more about the tax implications of divorce, particularly for HNWIs, visit this detailed tax guide.

    4. Emotional and Psychological Effects of Delays

    Beyond financial and legal ramifications, delayed settlements can also take a significant emotional toll. Divorce is inherently stressful, and drawn-out proceedings only exacerbate anxiety, frustration, and uncertainty for both parties. The longer the process continues, the harder it becomes for individuals to move forward with their lives.

    For HNWIs, these challenges can be amplified by the complexity of their financial portfolios, making it harder to achieve closure. Furthermore, prolonged settlements can affect children, especially if there is uncertainty about their future living arrangements, education, and overall financial security. Swift resolution helps to alleviate these emotional burdens, allowing both parties to begin rebuilding their lives.

    5. Advantages of Early Resolution

    By addressing financial settlements promptly, high-net-worth individuals can avoid many of the risks associated with delays. Timely settlements provide both parties with clarity and stability, enabling them to make informed decisions about their future. Moreover, acting quickly often helps preserve amicable relations, which is particularly important when children are involved.

    Lara Davies emphasises the need for early legal intervention, advocating for a multidisciplinary approach that includes solicitors, financial planners, and accountants. This ensures that all aspects of the financial settlement, including asset protection and tax planning, are handled with the utmost care and efficiency.

     

    Conclusion

    Delaying financial settlements in high-net-worth divorces can lead to a host of issues, including asset dissipation, changes in financial circumstances, and tax liabilities. Moreover, the emotional toll of prolonged proceedings can make an already difficult situation even harder to navigate. By seeking professional legal and financial advice early, HNWIs can ensure that their financial settlements are completed in a timely and fair manner. Acting promptly allows both parties to safeguard their assets, minimise tax burdens, and reduce the emotional stress associated with divorce.

    For more information on high-net-worth divorce settlements and legal strategies to protect your wealth, contact us using the call back request form.

     

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      Divorce and Immigration in England and Wales: Expert Insights from OLS Solicitors

      Posted on by Isabel Gillman

      OLS Solicitors Blog

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      Divorce and Immigration in England and Wales: Expert Insights from OLS Solicitors

      By Isabel Gillman on October 20, 2023

      "Passport control desk symbolising immigration issues intersecting with divorce, a topic covered by OLS Solicitors in England and Wales."

      Immigration and Divorce Advice: The Essentials

      At OLS Solicitors, we are seasoned in navigating the intricate challenges that intertwine divorce and immigration laws. Our wealth of expertise ensures that we offer nuanced insights to aid individuals in steering through these complex processes with ease. In this piece, we delve into the legal landscape of divorce and immigration in England and Wales, offering an in-depth analysis and practical steps for those confronting these dual issues.

      Spouse Visa Implications

      For those holding a spouse visa in England and Wales, it’s crucial to be aware of the potential effects of divorce on their immigration status. This visa is deeply rooted in the marital relationship, and its validity can be put in jeopardy when the marriage comes to an end. Our legal experts at OLS Solicitors are proficient in navigating these legal intricacies and are on hand to advise on the ensuing steps and alternatives available.

      Parent of a British Child

      Non-EU nationals with a British child have certain legal provisions that can aid their continued stay in the country post-divorce. Our adept team is well-versed in applying these intricate rules, ensuring that parents are equipped with essential information and guidance to uphold their child’s welfare.

      The Legal Framework in England and Wales

      England and Wales have their unique legal requisites for divorce, distinct from Scotland, without the necessity for an extended period of separation. However, the complex nature of immigration laws can still present challenges, particularly for spouse visa holders.

      Strategic Steps to Consider
      Professional Legal Advice

      Enlisting our skilled solicitors ensures that you’re endowed with personalised advice, sculpted to fit your individual circumstances. We are committed to offering clear, concise, and pragmatic legal solutions to alleviate the complexities intertwined with divorce and immigration.

      Timing and Strategy

      We at OLS Solicitors underline the pivotal role of strategic timing in commencing divorce proceedings, especially when intertwined with immigration issues. Every case is meticulously assessed to proffer bespoke advice on manoeuvring these concurrent legal challenges.

      Prioritising Children’s Welfare

      The welfare of children remains central to our legal practice. We are steadfast in ensuring that all legal decisions and actions are anchored in the paramount interest of the children, balancing varied elements to assure their holistic welfare.

      Understanding Immigration Laws

      Our expertise stretches to imparting a comprehensive grasp of the immigration laws in England and Wales. We empower our clients with intricate knowledge and insights, equipping them to make well-informed decisions through every legal phase.

      Conclusion

      At OLS Solicitors, our dedication lies in proffering expert legal counsel, adeptly navigating the entwined paths of divorce and immigration with precision and care. Each case bears its unique nuances, and our tailored approach ensures personalised, strategic advice for every client. For consultations or additional information, engage our team of legal professionals, committed to safeguarding your welfare and that of your children through every legal stride.

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        The pitfalls of not sorting out your finances before filing a divorce in England and Wales

        Posted on by Isabel Gillman

        OLS Solicitors Blog

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        The pitfalls of not sorting out your finances before filing a divorce in England and Wales

        By Isabel Gillman on April 6, 2023

        The benefits of mediation in family law cases

        Going through a divorce can be an incredibly stressful and emotional experience. However, it’s important not to overlook the financial aspects of divorce, especially in England and Wales, where the courts have wide discretion in how to divide marital assets. Failing to sort out your finances before filing for divorce can lead to a range of pitfalls that can have long-lasting financial consequences.

         

        One of the most significant financial pitfalls of not sorting out your finances before divorce is the potential loss of your pension. In England and Wales, pensions are considered a marital asset and can be subject to division upon divorce. However, if the pension is not properly valued or divided, it can result in significant financial loss to one or both parties.

         

        Pension specialists advise that the best way to protect your pension in a divorce is to seek advice from a qualified financial advisor or pension specialist early on in the process. A specialist can help you to understand the options available to you and can guide you through the process of valuing and dividing the pension. Failing to properly value or divide the pension can lead to future financial difficulties.

         

        Another common pitfall of not sorting out finances before filing for divorce is the failure to disclose all assets. In England and Wales, both parties have a legal duty to provide full and frank disclosure of all assets and liabilities. If one party fails to disclose an asset, it can result in the court setting aside the divorce settlement, which can be costly and time-consuming.

         

        It’s essential to seek legal advice and to be transparent about all assets, including investments, savings, property, and inheritances, to ensure that the division of assets is fair and equitable. Failure to disclose all assets can lead to financial losses and can prolong the divorce process.

         

        Another pitfall of not sorting out finances before divorce is the risk of being stuck with a mortgage or other debts. Joint debts, such as mortgages, loans, and credit card debts, can be a significant financial burden, especially if one party is unable to take over the debt or refinance it on their own.

         

        It’s important to seek advice from a financial advisor or mortgage broker to determine how best to handle joint debts in a divorce. In some cases, it may be possible to refinance or transfer the debt to one party. In other cases, the property may need to be sold, and the debt paid off from the proceeds. Failing to address joint debts can lead to financial losses and can prolong the divorce process.

         

        In conclusion, sorting out your finances before filing for divorce is essential to avoid financial pitfalls that can have long-lasting consequences. Seeking advice from qualified professionals, including financial advisors, pension specialists, and legal experts, can help to ensure that the division of assets is fair and equitable and can protect your financial future. With the right guidance, it’s possible to navigate the financial aspects of divorce successfully.

        References:

        “Divorce and Pensions: What You Need to Know” by Andrew Pennie, Forbes Advisor, July 22, 2021

        “The Importance of Disclosing All Assets in Divorce Proceedings” by Joanne Radcliffe, Solicitors Journal, May 4, 2021

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          Where can men get help in divorce proceedings?

          Posted on by Lucy Batstone

          OLS Solicitors Blog

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          Where can men get help in divorce proceedings?

          By Lucy Batstone on December 13, 2022

          We help men through divorce

          Are you a man going through matrimonial proceedings? Have you found it difficult to find online support and guidance that speaks to your needs? You’re not alone. Far too often, men feel left out and isolated in the midst of a divorce or other family law matter. That’s why we’re here to help.

           

          When you search online for information about divorce, you’re likely to come across a lot of resources that focus on what wives are entitled to in a divorce. But divorce affects both men and women equally. In fact, in England and Wales in 2021, over 55,000 men were involved in divorces between opposite-sex couples. That’s why it’s crucial that men have access to the legal support they need to secure a fair and equal outcome.

           

          At our law firm, we understand the challenges that men face during matrimonial proceedings. We’re here to provide you with the advice and guidance you need to reduce stress and anxiety and secure your rights.

           

          Whether you’re dealing with child proceedings, domestic abuse, a divorce, or a financial matter, we’re here to help. We believe that no one should be deprived of their right to adequate legal advice because of their gender. With our expert support, you can obtain a fair and equal resolution that takes into account your unique circumstances.

           

          We understand that men who are going through a divorce or other family law matter may feel like they’re at a disadvantage. But it’s important to know that each family is looked at individually, and with the right legal support, men can obtain the outcome they deserve. This includes securing a fair division of assets, obtaining maintenance payments, and obtaining custody or visitation rights for their children.

           

          If you’re a man going through a divorce or other family law matter, we urge you to seek specialist advice from a family law solicitor. Don’t rely on information you find online or advice from well-meaning friends. With our support, you can navigate the complexities of matrimonial proceedings and secure your future. Contact us today to schedule a consultation and find out how we can help.

          If you’re a man going through matrimonial proceedings, it’s important to know that you don’t have to go through it alone. There are many support groups and resources available that are specifically designed to help men through divorce and other family law matters. Here are a few resources you may find helpful:

           

          The Men’s Advice Line: https://mensadviceline.org.uk/ – A confidential helpline for men who are experiencing domestic abuse or violence.

           

          ManKind Initiative: https://www.mankind.org.uk/ – A UK-based charity that supports male victims of domestic abuse and violence.

           

          Dad.info: https://www.dad.info/ – An online community that provides information, advice, and support for dads going through separation, divorce, or other family law matters.

           

          OnlyDads: https://www.onlydads.org/ – A website that provides practical advice and support for dads who are raising children on their own.

           

          CALM (Campaign Against Living Miserably): https://www.thecalmzone.net/ – A UK-based charity that provides support and resources for men who are struggling with mental health issues, including those related to divorce and separation.

           

          Remember, seeking support is a sign of strength, not weakness. Don’t be afraid to reach out for help if you need it. With the right support, you can get through this difficult time and emerge stronger and more resilient.

           

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            Joint divorce applications – How to save money and keep it amicable

            Posted on by Lucy Batstone

            OLS Solicitors Blog

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            Joint divorce applications – How to save money and keep it amicable

            By [Lucy Batstone] on October 18, 2022

            It is becoming more common for separated couples to remain amicable in the lead up to and throughout divorce proceedings. Whether it is to avoid extra costs, to resolve the matter quickly, or to maintain a stable and loving environment for children, many spouses no longer want to instruct a solicitor each just to unnecessarily thrash the matter out through complex correspondence.

            Typically, it would be a conflict of interest for one solicitor to act for both spouses in a divorce. However, under the new ‘No-Fault Divorce’ law, as of 6th April 2022, couples can now jointly instruct a solicitor to assist them both throughout the process.

            We understand that a marriage can irretrievably break down for many reasons, the need to apportion blame only heightens animosity, but a solicitor acting for both parties can provide reassuring guidance and encourage harmonious and conflict-free discussions and resolutions.

            Previously, one party’s solicitor would not be permitted to advise the other party, meaning an unrepresented party could spend up to ninety-minutes on the phone every time they sought to obtain an update from Court. Instead, having just one solicitor who can support both parties, means that you will both receive the most accurate and up to date information and expertise, at the same time. A joint application of course also means there is no longer the need to pay separate legal fees just to receive the same updates from two different solicitors.

            Enabling parties to jointly instruct a solicitor means that both parties are on a level playing field, with access to the same family law specialist. There will no longer need to be unrepresented parties overwhelmed with incoming legal paperwork, a jointly appointed solicitor can handle the legal jargon and court process for you.

            The Court fees for filing a divorce can also be burdensome, but by filing a joint application, parties can consensually agree to divide the costs between them as they see fit. This takes the onus away from a sole Applicant who would typically carry the costs throughout part, or even the entire process.

            If you are unsure whether a joint application is right for you, maybe because there is a chance, albeit currently amicable, your relationship will deteriorate, we can continue to support you.

            The law allows for a joint application to be switched to a sole application at certain points throughout the divorce. By having a solicitor managing the proceedings for you, means you do not have to worry if the process begins to take a toll on the relationship. If your formerly joint application needs to become a sole application, we can use our specialist knowledge to ensure the transition is a smooth as possible to reduce any undue stress and pressure, on either party.
            Single Lawyer Divorce Service
            OlS Solicitors have recently launched a single lawyer divorce service, named De-Couple Single Lawyer divorce service.  The idea of the service is to allow couples to end their marriage and sort their finances in an amicable way, without having to resort to expensive litigation.

            Using one divorce lawyer can save you an average of £2,300 each where the average divorce  and settlement using two sets of lawyers is £7620.

            If you want your divorce negotiations to remain amicable and non judgmental then this service will be ideal, especially where there may be substantial assets such as properties and pensions to be settled and divided.

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