The division of assets during divorce is often one of the most complex and frustrating portions of the divorce proceeding. Parties must list and value all assets before beginning negotiations to determine who gets what. Although an intentional attempt to hide an asset is a serious offense that can result in repercussions for the offending party, there are also instances when both parties simply forget an asset.
But what happens after the parties finalize the divorce and realize they failed to account for an asset? This was the question asked in a recent case.
The case of forgotten cryptocurrency
In 2016, a couple in Indiana finalized their divorce with a property settlement agreement. The agreement awarded the husband all assets of their business, except for a few specific items given to the wife. A year later, the husband discovered that the business owned cryptocurrency, which both parties had forgotten during the divorce proceedings.
The wife petitioned the court to split the value of the cryptocurrencies. Upon review, the trial court initially ruled that the asset was omitted and divided its value. However, the Court of Appeals reversed this decision, stating the agreement’s use of the language “all” of the company’s assets to the husband except for specific, named items transferred to the wife applied to the forgotten cryptocurrency. The Indiana Supreme Court upheld this decision.
Courts can make post-decree modifications in some circumstances
Although the court in the case above did not allow for the division of the cryptocurrency after the parties finalized the divorce, there are circumstances when it will allow for a post-divorce transfer of assets. This can include situations where the following is present:
- An agreement between the parties authorizes the court to make the modification;
- A post-decree agreement to make the modification; or
- Instances where the agreement is tainted by fraud.
Although it is best to disclose all assets during divorce negotiations, it is possible to hold the other party accountable if the situation satisfies one of the above exceptions.
Steps to ensure full asset disclosure
It is important to conduct a thorough inventory to mitigate the risk of this type of issue. List all assets, including those that may not be immediately obvious, such as digital currencies or intellectual property. This can help to better ensure a comprehensive and fair asset division.
