Whether Bitcoin you owned before marriage is protected in a NSW property settlement depends on how it’s treated as property of the marriage. The key is not *when* you acquired it, but how you used and maintained it during the marriage – and whether it has increased in value.
What is considered ‘property’ for a settlement?
The Family Law Act deals with the ‘property of the parties to a marriage’. This includes financial resources and assets owned by either party, regardless of when or how they were acquired. However, the court must consider what is ‘just and equitable’ when deciding how to divide that property under section 79AA. This means pre-marital assets aren’t automatically excluded.
Can pre-marital assets be included?
Yes, pre-marital assets can be included in the property pool. The court will look at the contributions made by each party during the marriage, including financial and non-financial contributions. If the Bitcoin increased in value *during* the marriage, that increase may be considered a contribution made by both parties, even if you owned the Bitcoin beforehand.
What if the Bitcoin was a gift or inheritance?
The source of the Bitcoin – whether it was a gift or inheritance – is relevant for record keeping purposes. However, this doesn’t automatically shield it from being considered part of the property pool. Evidence of the original intention at the time of acquisition may be relevant, but the court will focus on how the asset was actually kept and used throughout the marriage.
The valuation problem
Valuing cryptocurrency presents unique challenges. Unlike real estate or shares, Bitcoin’s value fluctuates significantly. Establishing the value at key dates – the date of marriage, the date of separation, and the date of settlement – can be complex and require expert evidence. The court also needs to be satisfied that any proceeds of crime orders or forfeiture applications relating to the Bitcoin have been disclosed under sections 79B and 90M.
Questions to consider
- What records do I have to demonstrate the value of the Bitcoin at the date of marriage and throughout the marriage?
- How was the Bitcoin held – solely in my name, or jointly with my spouse?
- Could my spouse argue they contributed to any increase in the value of the Bitcoin during the marriage?
This information is general in nature and does not constitute legal
advice. For advice specific to your situation, contact JB Solicitors.