Did you know that hidden digital assets can dramatically alter a divorce settlement? In New York state divorces, spouses are required to fully disclose their assets and liabilities, whether material or digital. As digital wealth becomes more common, hidden digital assets—especially cryptocurrency, NFTs, online investment accounts, and digital businesses—can significantly affect the outcome of a divorce settlement.

What to Know About New York State’s Mandatory Divorce Financial Disclosure Forms

If you’re filing for divorce in New York, one of the most important requirements is full financial disclosure. The court expects both spouses to provide complete and accurate information about their income, expenses, assets, and debts. Failure to do so can result in penalties and may negatively affect the final divorce settlement.

Specifically:

• New York Domestic Relations Law § 236(B), known as the Equitable Distribution Law, requires full disclosure of marital assets and governs the division of marital property.
• 22 NYCRR § 202.16 contains the requirements for the Statement of Net Worth and financial disclosure in matrimonial actions.
• The New York State Unified Court System Statement of Net Worth form is the mandatory financial disclosure document used in divorce proceedings.

Recent changes to New York’s divorce financial disclosure forms specifically address cryptocurrency, digital wallets, NFTs, and other blockchain-based assets, reflecting the growing role of digital wealth in matrimonial litigation.

The revision was designed to address growing concerns about undisclosed digital wealth in divorce proceedings and to promote greater transparency during the equitable distribution process. Spouses who fail to disclose these assets may face court-imposed sanctions, adverse findings, or awards that grant a larger share of marital property to the other party.

What to Know About New York’s ‘Statement of Net Worth’

The primary financial disclosure document in a New York divorce is called the Statement of Net Worth. This sworn document requires each spouse to disclose:

• income from all sources;
• bank accounts;
• investment accounts;
• real estate holdings;
• retirement accounts;
• business interests;
• debts and liabilities;
• monthly living expenses; and
• other assets owned individually or jointly

And as digital wealth has become more common, New York has expanded disclosure requirements to address modern assets. Digital assets may include:

• cryptocurrency (Bitcoin, Ethereum, etc.);
• NFTs and digital collectibles;
• online brokerage and investment accounts;
• PayPal, Venmo, and other digital payment accounts;
• monetized websites, blogs, YouTube channels, and social media accounts;
• domain names and digital intellectual property; and
• digital wallets and decentralized finance (DeFi) investments.

Because the form is signed under oath, intentionally providing false or incomplete information can have serious legal consequences.

The purpose for disclosing digital assets in addition to material assets is to prevent spouses from hiding wealth in digital form during divorce proceedings. Courts generally treat digital assets as property for equitable distribution purposes, although valuation and tracing issues may make them more complex than traditional financial accounts.

In New York, digital assets acquired during the marriage are generally considered marital property and may be subject to equitable distribution. Assets owned before marriage may be separate property, although appreciation attributable to marital efforts can sometimes become subject to division.

Why Full Disclosure of Digital Assets Matter

New York is an equitable distribution state, meaning marital property is divided equitably  not  automatically split 50/50. The court can only make a fair division if it has a complete picture of the marital estate.

Accurate disclosure helps determine:

• separate property;
• property division;
• spousal maintenance;
• child support;
• attorney fees; and
• overall settlement negotiations.

Incomplete disclosure can distort the value of the marital estate and lead to unfair results.

Because many digital assets are stored electronically and can be transferred anonymously, some spouses attempt to conceal them during divorce proceedings. Cryptocurrency is particularly challenging because it can be held in private wallets outside traditional banking systems.

If a spouse successfully hides digital assets:

• the marital estate may appear smaller than it actually is;
• the other spouse may receive less property than they are entitled to;
• child support or spousal maintenance calculations may be affected; and
• settlement negotiations may be based on incomplete financial information.

Consequences of Concealing Assets

New York courts take asset concealment seriously. If a judge finds that a spouse intentionally hid assets, the court may:

• award a greater share of marital property to the other spouse;
• impose monetary sanctions;
• reopen a settlement if the fraud is discovered later;
• draw adverse inferences against the spouse who concealed assets.

How Are Hidden Digital Assets Discovered?

Attorneys and forensic accountants may uncover hidden digital assets through:

• review of bank and credit card statements;
• tax return analysis;
• examination of electronic devices;
• subpoenas to cryptocurrency exchanges such as Coinbase or Gemini;
• blockchain transaction tracing; and
• analysis of online business revenue streams and digital wallets.

What is an Example of Hidden Digital Assets?

Suppose one spouse purchased Bitcoin during the marriage and transferred it to a private wallet without telling the other spouse. If that Bitcoin has grown from $20,000 to $200,000, it could represent a substantial marital asset. Failure to disclose it could lead to a court awarding a larger portion of the remaining marital assets to the innocent spouse or imposing other penalties.

How to Handle Digital Assets During a Divorce

Cryptocurrency, NFTs, online accounts, and digital businesses are often treated like other marital property and must be disclosed. Attempting to conceal these assets can result in severe legal and financial consequences, while proper identification and valuation can help ensure a fair settlement.

If digital assets may be involved in your New York divorce, your attorney should have a complete picture of your financial situation and any concerns about undisclosed assets. Hidden digital assets can significantly affect property division, support calculations, and settlement negotiations.

The more information your divorce attorney has about potential digital assets, the better they can protect your interests. In New York, full financial disclosure is required, and courts can impose serious consequences when a spouse intentionally conceals cryptocurrency or other digital wealth.

A knowledgeable divorce attorney can work with forensic accountants and digital asset experts to identify, value, and properly divide hidden assets, helping ensure a fair settlement.

Tully Rinckey attorneys understand that the issues involved in matrimonial matters can be challenging, and they will handle your matter with the attention and tact it deserves. If you have questions about cryptocurrency, hidden assets, financial disclosure obligations, or property division during a divorce, the attorneys at Tully Rinckey can help you understand your rights and protect your financial interests. Please call 8885294543 to schedule a consultation, or schedule a consultation online.

Michael J. Belsky is a Partner in Tully Rinckey PLLC’s Latham office. For years, Michael Belsky, Esq., has been relentlessly fighting for the rights of children, spouses, parents, and grandparents in virtually every aspect of family and matrimonial law. Michael provides representation in matters relating to divorce, parental alienation, separation agreements, annulments, child custody, child support, modifications to child support and child custody, enforcement of divorce decrees, spousal maintenance, pre-and post-nuptial agreements, orders of protection and family offenses. He can be reached at info@tullylegal.com or at (888) 529-4543.