Cryptocurrency, NFTs, and More with Sandra Radna
Divorce and Cryptocurrency
Hiding money from a spouse has been a part of divorce since divorce started, but what happens when it’s crypto? How about art in the form of NFTs? How should you handle these assets in your own divorce? Seth and Pete are joined in this episode by divorce attorney Sandra Radna to discuss how these assets in a divorce are similar and different from other assets.
About Sandra
Sandra M. Radna, Esq. is the owner of Law Offices of Sandra M. Radna, PC., a general practice law firm based in Long Island, New York. With 28 years of experience practicing law, representing divorcees since 1993, Radna founded Law Offices of Sandra M. Radna in 2012 and now leads an incredible team of attorneys. Radna was selected as the top 1% of Family Lawyers by the National Institute of Trial Lawyers, and was also chosen as a Lawyer of Distinction in the areas of Divorce and Family Law as recognized by the New York Times and USA Today.
Sandra has been recognized as a legal thought leader in Business Insider, Fox News, New York Observer, Washington Post, CNBC, Attorney At Law Magazine, The New York Law Journal, Decrypt Media, GOBanking Rates, Refinery 29, Shondaland, Scary Mommy, Ms. Magazine and more discussing crypto as a marital asset, child custody, legal advice, per and post nuptial agreements and more.
Links & Notes
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Pete Wright:
Welcome back to Season Six of How To Split A Toaster, a divorce podcast about saving your relationships from, true story, FM. Today on the show, what do you do when your toaster goes all in on crypto?
Seth Nelson:
Welcome to the show, everybody. I'm Seth Nelson, and as always I'm here with my good friend, Pete Wright. If you're a regular listener, you know how much we love to talk about marital assets. Helping you to figure out how to split everything you've collected over the course of your marriage is a big part of what we do. But the last two years, we've seen an evolution of the financial assets coming into the divorce table in the form of digital assets, from cryptocurrency to NFTs, couples are looking to split their bits in the divorce process. Sandra Radna is founder of the Law Offices of Sandra M. Radna P.C. But more importantly, the author of You're Getting Divorced, Now What? And she joins us today to share what she's learned in how digital assets are reframing the discussion of the financial separation. Sandra, welcome to The Toaster.
Sandra Radna:
Thank you, Seth and Pete. So nice to be here, and I'm excited to talk about this topic with you.
Pete Wright:
Well, it's so nice to have you. I feel like we're still at this point in the education curve around digital assets that we should define some terms. Can you help us define terms? What do you mean when you talk about crypto, cryptocurrency, NFTs?
Sandra Radna:
Okay, well it's a few different things. Crypto is a general term that's used to talk about cryptocurrency. And cryptocurrency is, instead of typical currency, which is our dollars and our cents, cryptocurrency is digital assets. So, most people are familiar with Bitcoin, they've heard of Bitcoin. But really, there's all types of coins that have been created, some of them are called altcoins. But some of them are really becoming mainstream as well. So, there's, in addition to Bitcoin, there's all types of ticker symbols for all different types of digital coins that people can purchase. And just like how you would have a stock market that would monitor how stocks are going up and down, there's people that monitor the value of cryptocurrency, such as Bitcoin, going up and down also. So, it's another type of asset.
Seth Nelson:
And that's really no different than how the dollar will fluctuate on the market versus the yen or the British Pound, right?
Sandra Radna:
Exactly. Yeah.
Seth Nelson:
So, it's just another form of currency that trades at different levels.
Sandra Radna:
So, cryptocurrency is the money, the currency. NFTs, that stands for a non-fungible token. So, something that's fungible is like a dollar bill, right? Like, if I give you a dollar, then it's mine and that's it. Non-fungible means that it can't be treated that way. So, it's more of a unique thing. So, people have heard of funny things like the first tweet was a non-fungible token that was sold for a lot of money. And what it is, is that people can own that asset, even if it's a digital thing, and it has value because people are interested in it and want it. So, an NFT is a non-fungible token. But the there's all other types of digital assets as well, right? Which I think we're going to get into talking about today.
Pete Wright:
Well, I hope so, because I think it's important, not for the least of which that it causes complication potentially in the divorce process, and that's what I want to get to, particularly because ... And this is the only experience I have in hearing about this complication of the divorce process is, "I think my spouse is hiding their assets in Bitcoin. What am I going to do? How do I get to the other side of this?" So, I am interested in your experience in how you manage the process of figuring out where conflict exists in the divorce process around crypto.
Sandra Radna:
Well, financial infidelity is nothing new to divorce, people have been hiding money from their spouses in divorce since, I guess the day divorce started. But to get-
Seth Nelson:
Hold on one second, let me just check under my mattress here, make sure I've got everything where it's supposed to be. Okay, I'm all good. Sorry for the interruption, go ahead.
Sandra Radna:
I guess back in the day, people would hide financial assets in the Swiss accounts, you know? You would always hear about, it's in a Swiss account or it's in an offshore account. So, what happened with cryptocurrency when it first came out and Bitcoin first came out, crypto means hidden, right? Like, cryptic, hidden. So, people who invested in it said, "Well, this is a great way to hide money from other people," including their spouses. But actually, we all know, if you're familiar with cryptocurrency, that there's something called the blockchain. And once you have the information, which looks like gobbledygook if you don't know what it is, but it's like an account number. You have a public key and a private key. But the public key is what's on the blockchain, and it shows what that account is.
So, if you had a transaction with somebody using cryptocurrency, it would be on the blockchain. And if you knew what that information was, then you'd be able to find every transaction that was done.
Seth Nelson:
Let's talk through that a little bit.
Sandra Radna:
Okay.
Seth Nelson:
Let's put some meat on this bone.
Sandra Radna:
Okay.
Seth Nelson:
So, Pete has his very first iPod he ever had. He says, "You know what? I'm ready to sell this. It's been near and dear to my heart. Seth, I'm going to sell it to you, but only if you pay me in Bitcoin." We'll just use that. So, I happen to have some Bitcoin, and so I transfer my Bitcoin to Pete, right? That's how the transaction takes place. Am I there so far?
Sandra Radna:
Yep.
Seth Nelson:
Okay. And that will then be on a blockchain, which I always think as just like a ledger, right?
Pete Wright:
Right.
Sandra Radna:
That's exactly what it is.
Seth Nelson:
Okay, and then somebody else, if they had the right kind of code to look at that blockchain, they could go in and they could say, "Oh," it wouldn't necessarily be my name. But for this sake, "Seth transferred 100 Bitcoin to Pete." Pete got the Bitcoin, and then it's up to Pete to make sure he FedEx's me out the very first iPod he ever had. Is that how it works?
Sandra Radna:
Seth, that's a perfect explanation in very simple terms for people to understand. That's exactly what it is. If you don't have that public key, which is that account number that's really just alphanumeric number of letter and numbers together, you wouldn't be able to track that transaction. But if you did have it, you would be able to track it. So, getting back to your question about what do you do in a divorce in order to find that? If the spouse has a suspicion that there was some type of digital assets, then we would look for it.
So, we joked around right before the show about mining. So, Bitcoin is something that people can mine. They have to have special equipment, computer equipment in order to do that. And usually those people will know that their spouse had a mining account because you really can't hide the equipment, you would know about it.
Seth Nelson:
So, let's talk about mining for a minute.
Sandra Radna:
Okay.
Seth Nelson:
If Pete and I do this financial transaction, but I'm at the bank and I write a check and I send it to Pete. And Pete goes to his bank and he cashes the check. And then his bank notifies my bank and the money transfers from my bank to his bank and the banks take care of that transaction to show the distance. Isn't that what miners do? They're the ones with the computer equipment that are showing the transaction, is that what they do?
Sandra Radna:
Well, what they're doing is, they're helping Bitcoin to show what all the different transactions are, and then they earn Bitcoin by doing it. So, that's the incentive for people to have mining accounts is to earn the money. But yes, that is basically what they're doing is, they're tracking the transactions on the blockchain, and they're helping the blockchain to document those transactions. And by doing that, they're earning Bitcoin.
Seth Nelson:
Right, and they don't have to be FDIC insured, they're not a bank. I could get a bunch of computer equipment and I could learn how to mine and I can say, "I'm a miner."
Sandra Radna:
Exactly.
Seth Nelson:
And I'm actually competing against all the other miners to be there first to get that transaction, isn't that right?
Sandra Radna:
That's exactly right.
Seth Nelson:
In case the law gig doesn't work out, Pete.
Pete Wright:
Yeah, I know.
Seth Nelson:
I'm telling you.
Pete Wright:
I know, we've got the number lined up. And I would add, the blockchain is really important in this conversation, because as you said, it is like a public bank statement with anonymized names on it. You can go look at it. And I am on the Blockchain Explorer right now, and the first transaction that I see is, let's see, 2.848 Bitcoin that is being exchanged between two public keys that I can see, completely visible to me. And Seth, do you happen to know what the value of 2.8 Bitcoin is today?
Seth Nelson:
No, but I do have a good Bitcoin trading story that I'll tell later in the show, a little teaser there for you.
Pete Wright:
Well, this exchange was for $84,144 for 2.8 Bitcoin. So, one Bitcoin, which is what I would have charged you for that original iPod because I think you might have given it to me at this point, is very, very high. The market is in flux, but all of these transactions are public. Back to this divorce conversation, if you know the public key of somebody, you can find every transaction that they have made on the public blockchain.
Sandra Radna:
So, usually in my practice, what I do is if we have high earners that have low assets, so they're very high earners, they look like they don't have a lot of assets for some reason suddenly, maybe they did before, but it's not making sense, it's not adding up. The question I'll usually ask is, "Does your spouse have digital assets?" And sometimes they don't know, and sometimes they do know. You first need to have a suspicion, it needs to be a significant amount of money in order to start engaging forensic accountants and forensic computer analysts to look for it. But if there's a suspicion, a legitimate suspicion, and you think it could be a significant amount, as far as the discovery that an attorney would do is, one of the things you would get is the hard drive of the computer. You would have a forensic computer analyst who is going to go through, and they'll look for things like the ticker symbols, because the other thing they would look for is the first transaction that somebody made for digital assets had to be using traditional currency. You have to start there.
But then, the person might say, "Well, I had Bitcoin and I got rid of it and we don't have it anymore." Well, they might have just bought another digital asset. And that's where knowing the ticker symbols for these different types of altcoins, they call it, the different types of digital coins, comes in handy. And that's where you have someone who specializes.
Seth Nelson:
Right, I'm going to back up here a little bit.
Sandra Radna:
Okay.
Seth Nelson:
So, I'm going to unpack two or three things you said there. So, the first thing you said is, "Look, if you have a suspicion, you lawyers should be asking, 'Do you have Bitcoin or any cryptocurrency or any digital currency?'" Pete, believe it or not, Florida got something right for a change.
Pete Wright:
Oh, I can't wait.
Seth Nelson:
In Florida, check your local jurisdiction, ring the bell, on mandatory financial disclosures, what you're required to disclose now includes any digital currency. You're required to let us know up front. But shockingly, not everyone tells the truth. So, to Sandra's point, what happens is, I go through the bank statements. And somewhere in those bank statements, there is going to be the first transaction where you actually buy your cryptocurrency. And where would that happen? Like, on the bank statement, what might you look for there?
Sandra Radna:
Well, it would just say the transaction. It would say what you purchased. It's not an easy answer because there's all different places that you can buy that first transaction from. But if it says something like Coinbase or-
Seth Nelson:
Robinhood.
Sandra Radna:
I mean, you've seen the stuff like-
Seth Nelson:
There's all these different places to get you into. And so, if you're new to all this, which a lot of people are, I want you to think of this as, well, if someone's going to buy a stock, they could have opened up a TD Ameritrade account. They could have opened up an account with a different brokerage firm. So, think of these web-based websites like Robinhood and other type-
Pete Wright:
Coinbase is the big one.
Seth Nelson:
Coinbase is a big one. Think of those as like the TD Ameritrades or like that. You've got to get your money to them, and then from there you get to the stock market. You can't just go to the stock market directly, there's a step in-between. So, that's what you're looking for. And sometimes you can do it on a credit card statement. So, you've got to look at your credit card statements too. But once it's in, you can trade all the crypto you want from one crypto to another to all this different stuff. But if you want the cash, it's got to come back out.
Now, some businesses are starting to take crypto as forms of payment, so you can look at that. But that's where you get into these experts. I'm always just trying to break it down.
Sandra Radna:
That's really great. And Seth and Pete, I'll tell you something really interesting. If people are saying, "Well, how would I know the different types of exchanges that you can buy crypto on?" Just watch a basketball game or a baseball game and see who all the sponsors are. All of the sponsors-
Seth Nelson:
Smart.
Sandra Radna:
... Are all digital currency now, it's really interesting. You really can educate yourself pretty easily just by watching who's sponsoring everything, and that's how you know how mainstream digital assets are becoming, because it's everywhere. Venmo, everywhere. Everywhere you can think of, it's there.
Pete Wright:
And that's a really good point. You just made a really good point. And this is one of the reasons I think it can be hard to dissect the different kinds of currencies, because Venmo is ... Well, a lot of people use that to exchange fiat currency, right?
Sandra Radna:
Yep.
Pete Wright:
Like, that is just another normal way to exchange regular dollars, not altcoins. And so, it can be confusing to see or to have to parse where the money is in your relationship.
Sandra Radna:
Right.
Pete Wright:
Right.
Sandra Radna:
So, that's why it's not an easy answer. However, if there is a significant amount, and again, we're talking about high earners. We're not talking about someone who bought Dogecoin when it was in for a minute and they just had a little bit. We're talking about people who have significant assets, who maybe got Bitcoin early and really made some significant money. Then you're going to be investing the money in a forensic computer analysis, forensic accountant who specializes in digital assets, because they'll be looking for that and they'll know what to look for.
So, my job as an attorney isn't to find the assets. My job is to recognize that the asset exists, to find it out, and then to get the correct professionals to help us get that, because digital assets are marital assets too, and they would be divided during a divorce.
Seth Nelson:
You know, I'm looking, and again I've been just clicking around blockchain. As you've been talking, I've been navigating the different things that we're talking about, and I get to the top NFTs. And NFTs, again, you started it, in this case, they're digital works of art. I'm looking at the top NFTs are all Bored Ape Yacht Club, which are all digital. They're just images, like any other image you might create on your computer. If you're an artist or an animator, you create this image. But it becomes an NFT when you assign in that status and freeze it in the blockchain. That's when it becomes an NFT, and it is tradable like any other work of physical art, like a painting on the wall. And the top NFT today is priced at 170 Ethereum coins or $297,000 for a piece of digital art. At what point does digital art, in this case an NFT in the divorce case, become a point of contention? Have you run into that, where people are trying to figure out how to fight over an NFT?
Sandra Radna:
The NFT is fought over similarly to art. So, you're not going to want to split the NFT, you're going to want to have that asset. So, in New York where I am, we're what's called an equitable distribution state, which means you only get the marital portion of anything.
Seth Nelson:
Music to my ears right there, Pete, I love it. Same in Florida.
Sandra Radna:
Instead of a community property state, which is more difficult. But usually what we do is, we do something we call equalize and divide. So, you figure out what the total value of the marital estate is, and then each person's getting 50% of that marital estate. So, how that's divided up doesn't matter. So, you're not necessarily going to split the NFT. They might get that in exchange for not getting something else. So, it's the same thing as art, you would get that piece of art, or if you wanted to do the value of 50% of that, you could do that as well. But the value fluctuates with an NFT, just like it fluctuates with any other digital asset, brokerage account asset, you know? The value goes up and down. So, sometimes it's better to just say, "I'll take that piece of art or that NFT, because I'll wait and see when the value goes up and sell it in an up market," instead of just getting 50% of the value while it's a down market, for example.
Seth Nelson:
Yep, exactly.
Pete Wright:
You get the house, I get the Bored Ape Yacht Club image.
Sandra Radna:
Right.
Seth Nelson:
Right, you got it.
Pete Wright:
Yeah.
Seth Nelson:
You got it. So, this is where my amazing investment in crypto comes from. It was a few years back when crypto was really new, and I knew nothing about it. And you know me, Pete, being a law nerd and I want to learn what's going on in these cases, I dived into crypto. I was studying it, I was reading it, I was getting any article I could find on it. And just like most people, you learn from doing. So, I went onto Coinbase, I put in $50, and I bought some Bitcoin. When I say some Bitcoin, it wasn't even one full Bitcoin, it was a sliver of a Bitcoin, right/
Pete Wright:
Of a sliver of a sliver.
Seth Nelson:
And I totally forgot about it.
Pete Wright:
That's how you do it.
Seth Nelson:
And it was a couple years later, and it was $350, right?
Sandra Radna:
Wow.
Seth Nelson:
Which is 165% annualized return on my investment, which I told my son about this. And immediately he said, "Why didn't you put in 50,000?"
Pete Wright:
Nothing is every good enough for you, boy. Well, this actually leads me into our listener question. And if you would indulge me some reading, I would like to read and get the response from both of you. I read this post on Reddit of a renter looking for legal advice, who says that when they moved out of their apartment they received only $1,600 of the $3,000 they provided to their landlord as the initial security deposit. It's going to be hard for me to read the whole thing without chuckling, I apologize in advance.
When they asked what happened to the rest of the money, the landlord explained that they'd put the money into a money market account that had lost value, and then admitted they'd actually invested it in Bitcoin. The landlord tried to claim that, "This is how a lot of landlords operate now," despite most likely falling afoul of guidelines on how landlords are supposed to hold deposits. Okay, this isn't a question about rent. But what do I have to worry about that my soon-to-be-former-spouse is rushing our divorce because she wants to pay out less cash based on the value of low Bitcoin? Thanks all. Does that make sense? Trying to game the market to get out of your divorce quick?
Sandra Radna:
I think people do that, and that's kind of what we were talking about with the NFT. What I advise my clients to do, and again, I'm always analogizing stocks when I'm talking about digital assets because of the fluctuation in the market, the stock market as well. But a lot of times, you don't want to take the value in a low market. So, if that spouse in the example that you're giving us, would say, "Here's 50% of the value today," I wouldn't advise my client to do that. I would say, "Take 50% of the coin. Get 50% of the Bitcoin, or whatever the digital asset is, and hold onto it until it's in an up market instead of a down market." And I think that's where people make mistakes if they don't understand, if they think, "There's nothing I can do, they're doing it during a down market." So, my advice to the listener would be, take 50% of the asset, not 50% of the value of the asset, and then wait until it increases in value before you get rid of it.
Seth Nelson:
Okay, Pete, good news.
Pete Wright:
Yeah.
Seth Nelson:
You've got two lawyers on the show talking now, and we're going to give you three opinions, okay?
Pete Wright:
Ain't that always the case?
Sandra Radna:
You have a different opinion, interesting.
Seth Nelson:
No, well first off, I agree wholeheartedly in your analysis. If you are thinking, "Hey, this is a down market, I don't want to take 50% of the value." So, let's just use numbers. There's $100 worth of Bitcoin and you have $100 in a checking account. But you're thinking, "Man, Bitcoin's going to go up." Don't take the $100 in the checking account. What you do, you give your spouse $50 out of the checking account, and you take half of the Bitcoin. Financially, it's the same right now. And that way, if you want to take the risk on Bitcoin and you think it's going up, you're going to have that benefit.
Now, I've added to Josh's question. So, I'm adding some facts here to show some different outcomes. So, I don't really disagree, I'm just adding more. In my hypothetical, if there's $100 in cash and there's $100 of value in Bitcoin, I would tell my client, "I don't care which one you take. If you think Bitcoin's going up and your spouse doesn't want to give up half of it, take the $100 in cash and go buy Bitcoin."
Pete Wright:
Right, just do it today.
Sandra Radna:
That's another way to do it.
Pete Wright:
And it's the same.
Seth Nelson:
That's another way to do it.
Pete Wright:
Yeah.
Seth Nelson:
But in my hypothetical, I made it easy because there's $100 in cash. Here's the problem, when there's no cash, or you know what? We've already divided the house, we sold it, or I'm keeping the house and I'm going to give you more of the retirement accounts. And we've divided everything up, right? And now you're left with the proverbial piece of art that can't get split. So, if it's an NFT, that's a problem. But if it's a Bitcoin or other cryptocurrency, then I totally agree that you just split the account.
Now, here's the thing, and this has happened in cases, there are tax consequences when you buy stock. So, Pete, if you buy stock at Apple at $100, and you're buying it every year on January 1st. The next time you go to buy it ... And you buy one share, $100. But the next time you buy it, the next lot you buy is $500. You have two shares, one you bought at $500, one you bought at $100. If you get divorced, if you could pick, you would want the $500 share because when you sell it, you have a higher what's called tax basis, cost basis. So, if you sell it for $600, you only have $100 in gains. You'll pay less tax on that capital gain. If you sell the $100 share for $600, you've got $500 in gain and the IRS is going to take more of that tax.
Pete Wright:
Okay.
Seth Nelson:
You with me?
Pete Wright:
Yeah.
Seth Nelson:
Okay. Gets a little technical, but here's what you need to know; ask your lawyers, if you're dividing assets like a brokerage account and you're going to split the account evenly, or the Bitcoin evenly, you want to talk to them about like kind exchange, because then the $100 share of Apple, you get half of that share and your spouse gets half. And the $500 share, you get half of that share and your spouse gets half, that equalizes the tax burden. This can be a huge savings or cost to you if it's not done right. So, just put a little check next to this, write it down. If you have these types of accounts, talk to your lawyer about a like kind exchange, even if you don't understand my example, I'm doing the math in my head. And you're driving in your car and you can't write it down, but this is a big issues and it can be the same with cryptocurrency.
Sandra Radna:
Seth, that is so important what you just said, and that's really one of the reasons why I always advise my clients, and I'm sure you do the same thing, that they should always talk to an accountant and their financial professional to talk about how any settlement that they're entering into for their divorce would be tax impacted, because people don't realize capital gains. And that is so great that you brought that up, because yes, the amount that you original paid for it makes a big difference when you're figuring it out. So, how you take your settlement, even if it's the same amount of money, makes a huge difference. So, that's a great point that you've brought up. I'm so glad you did that.
Seth Nelson:
Well, thank you. Don't compliment me too much, it makes Pete nauseous.
Pete Wright:
Yeah, don't do that in front of me. I kindly request you leave that kind of stuff off the show. I mean, you talk about the tax implications, and because we've already started the conversation early with the unregulated nature of talking about crypto, how often do you run into this case where people didn't think about their tax burdens at all and have sort of infused the divorce proceeding with this unexpected tax burden? Just the act of investigation into their finances have revealed that they forgot to take into account the tax burden.
Sandra Radna:
As the attorney, when we're working out a settlement, I always try to have them talk to, like I said, a financial professional and their accountant, just to see how it's going to be tax impacted or what the implications are. In New York, equitable distribution is not taxable where maintenance, or what everybody else calls alimony, New York calls it maintenance, does have tax consequences only on the state level. On the federal level, they changed that. But these are things that we talk about, how they're taking it.
For example, I had someone who came to me once and they got the same, their 50% share, but they were only in their 30s and their 50% share was all in retirement money. So, she had no liquid assets and she thought that she could just take that money. And she didn't realize that there was going to be a penalty and tax implications if she did that. So, she had gone to a mediator that she found online and they just prepared this. And so, she really did get 50% of the marital estate, but in the worst way she could have gotten it because she couldn't use that money for so long.
So, I think that's why it's important, and Seth brought up that every settlement's not the same. Like, you really do have to look into the consequences of how you're taking that money, because it can make a huge difference, really a life altering difference, because if you thought you were going to be able to use that money, for example to buy another house or buy some place to live, and you have no access to it without severe taxes and penalties, well that's like you took a lot less money than what you actually got.
Pete Wright:
Yeah.
Seth Nelson:
And back to what we started the show with, where we said, "Hey, people have been hiding money from their spouses for years," and what we call financial infidelity or they just don't manage the money well. And Pete, you raised the question, well, you didn't see this tax burden coming, or here it was. What you will be surprised at, Pete, more often than not when you have people who don't manage their money well, one of the big things they fail to do is file their taxes. So, you will be in the beginning of a case, and I'll say to my client who might not be the one who's been managing the money, they're trusting it's all getting done. I'll say, "Okay, well let's get your tax returns." She's like, "Oh, I never see them." Or he'll say, "I never see them, she handles them."
And then, mandatory disclosure's last three years of tax return, they don't have them. They're not filed. So, now we have this literally from one side of the transaction for the spouse that thought they were being filed, an unexpected tax burden that has penalties, interest, and the original tax due. In Florida, that's still a marital debt.
Pete Wright:
Yeah.
Seth Nelson:
So, that's a problem, right?
Sandra Radna:
In New York as well.
Pete Wright:
Yeah.
Seth Nelson:
Yeah. So, it is ... Just once again, we've talked about it on the show before, it never hurts to become educated on where the money's coming in, where's it going out, make sure you see your taxes every year. And I'm not saying go through a fine-toothed comb on everything, but some basics never hurt. And if your spouse is unwilling to share that information, then I think you need to have some other discussions.
Sandra Radna:
Or don't sign a tax return that you don't know anything about. A lot of people say, "I just signed it and I didn't read it." But once you sign it, you're responsible, so it's hard to make that claim.
Pete Wright:
Seth, it's back to school season. Oh my goodness, back to school season. It's hard enough for any parent and child. But if you're in the middle of a divorce, it can be a doozy.
Seth Nelson:
Welcome back to school. You've got to get the backpacks and the uniforms and the list of-
Pete Wright:
Lunches.
Seth Nelson:
Well, not lunches, you've got to just do the supply list. I mean, that's a nightmare. And then on top of that, it's especially true going back to school when alcohol and child safety's a concern.
Pete Wright:
This is the real stuff, this isn't just protractors, this is the real stuff. And you know on How To Split A Toaster, we are a divorce podcast about saving your relationships. And our mission is to help divorcing couples prepare for co-parenting in the best possible way they can during back to school.
Seth Nelson:
And as you know, that's one of the reasons we've partnered with Soberlink, to help offer resources to help you navigate the upcoming back to school season. And as you know, Soberlink is a remote alcohol monitoring technology created to help prove sobriety in cases which just gives a party to say, "Look, I'm not drinking," even if you always knew you weren't drinking, this lets you just say, "Here is third party independent verification evidence that the kids are safe when they're with me."
Pete Wright:
These devices, the Soberlink device, they're amazing. The system itself includes a breathalyzer, this high tech device. It has facial recognition that shows you, it allows you to received realtime updates from monitored co-parents anytime, anywhere, allowing for swift intervention for improved child safety.
Seth Nelson:
I've worked with them at the firm on more than one occasion, I know they've helped hundreds of thousands of people document proof of sobriety in realtime for peace of mind in child custody cases. They're currently offering a free back to school and divorce packet that includes questions and answers with top divorce attorneys, back to school checklists, communication tips, and much more.
Pete Wright:
And you can get this back to school packet, and this is fantastic, if you go to soberlink.com/toaster, one, you're going to help us out. Not going to lie, that helps us out, soberlink.com/toaster. But two, you get the gift of scrolling down and seeing picture of Seth Nelson. He's right there on the page, that's how you know you've arrived at the right place. Visit soberlink.com/toaster, the gift of knowing you're helping the show, you're helping your own co-parenting relationship, and you're also getting the gift of Seth Nelson.
Seth Nelson:
Well.
Pete Wright:
How can you go wrong with that?
Seth Nelson:
Maybe two out of three's not bad.
Pete Wright:
Thanks, everybody. And thank you so much to Soberlink for sponsoring How To Split A Toaster. Last question as we get to wrapping up, which is about the ... We've already sort of led into this when you talk about the discovery process. Is there anything different about dealing with somebody with Bitcoin assets, particularly if they are ... If you're worried about them hiding Bitcoin assets that you have to do different from the perspective of uncovering these assets? I know that just because the market is so volatile and it is so private, what is the risk of your spouse, soon-to-be-former spouse ... I don't know, trashing hard drives, doing something to further obscure the nature of the investigation?
Sandra Radna:
What I advise attorneys to do in this new world where there are digital assets that you really have to be paying attention to in order to protect your clients is that with the summons and complaint, when you file your divorce action, along with that in New York we have something called automatic orders, which says you can't dissipate marital assets. But you should also include in that, which is not on our automatic orders, preservation of digital assets and hard drives, because if you serve it with the summons and complaint and say they're not supposed to do that, and then they start destroying things, the courts will have remedies available for your clients if they do that. And really, why are you destroying a hard drive if there's nothing to hide?
So, you could ask for something, what we call in New York a negative inference if somebody does that, which is an assumption that there was something there to be found if you've destroyed the hard drive. But another thing that I think that we should talk about before closing is that, in addition to the digital assets that you might have from Bitcoin or gains such as purchasing a stock or digital coins is, there's something called the metaverse. And in the metaverse, people can actually buy, for example, advertising space or they can buy digital real estate. And all those things derive income. So, in addition to just owning coins, there could be income that's being derived from the metaverse that would also be something that a spouse would be entitled to because that would be part of your income. It might not necessarily show up. So, that's something that's important for them to note as well.
And the other thing is, some people are now taking part of their income, part of their salary in digital assets. So, for purposes of calculating child support, you really want to be careful, because since the value of the digital assets goes up and down, you want to make sure that your agreements protect that so they're always getting the correct amount of child support. In other words, if your child support obligation is a certain amount, and the person wants to pay it in partially digital assets, I wouldn't agree to that because that money goes up and down. And if they're taking their income partially in digital assets, I would want to see whatever the employment contract was to make sure what the guaranteed amount of income is, even if part of it's in digital assets. So, there's a ... We're getting a little bit technical, but there's a lot to look into to make sure that your client is protected.
In the employment law area, you see a lot of cases that are coming out of people that are violating, employers that are violating wage and hour laws by paying people with digital assets, because when the market fluctuations, they're not getting the right amount. So, I would argue that we as divorce attorneys, matrimonial attorneys, should be paying the same type of attention for our clients in the area of child support and maintenance, which is what New York called alimony.
Pete Wright:
Well, this gets back to Josh's question about the renter, right? The landlord's just going to give you 1,600 on your three grand back because of Bitcoin.
Sandra Radna:
Right. So I would be looking at the contract. So, if that wasn't disclosed, they're entitled to the full amount.
Pete Wright:
Right.
Seth Nelson:
Yeah. Josh hit it on the head when he goes, "I'm sure they're skirting some other rules on what landlords are supposed to be doing. But to Josh's point, this isn't really his question, but it does raise it, about hey, this stuff fluctuates.
Pete Wright:
When it crosses the transom into the fiat world, right? That's something we have to take into consideration.
Sandra Radna:
Now that we know about this, if people are getting married and they're doing a prenuptial agreement or a post-nuptial agreement, when you're listing the assets, which at least in New York, a prenup or a post-nup is not enforceable if you don't list all the assets that the person owns at the time that you entered into the agreement, make sure that the public key is on there. If there's digital assets that are being disclosed, include the public key, because that's not revealing anything, it's not the private key, but you'll be able to trace that asset if someone tries to say later on that they no longer have it. And if you don't have that public key, you wouldn't be able to do it.
Seth Nelson:
That's a great point. Pete, did you see a recent transaction on Bitcoin that just happened? Do you still have that website up?
Pete Wright:
This makes me very nervous.
Seth Nelson:
What makes you nervous about that?
Pete Wright:
Why, Seth? What are we doing? It's going so fast, man, 899, 500. Somebody just did $61,000. I've seen a lot of transactions.
Seth Nelson:
Okay. Well, I'm just letting you know, we might have just sold the show, okay?
Pete Wright:
Oh, wait, there it is for $249, got it. Yeah.
Seth Nelson:
Oh no, that guy overpaid.
Pete Wright:
As attorneys, are either of you accepting alt currency for your work?
Sandra Radna:
I'm not.
Seth Nelson:
I refuse to answer that question on the grounds that may incriminate. No. I am not accepting that as currency for our hard work and time that we put into our cases.
Pete Wright:
Neither am I. It's a brave new world, we just might not be a part of it yet.
Seth Nelson:
We're so old-school, Pete.
Pete Wright:
Yeah, we're old-school.
Seth Nelson:
You know?
Pete Wright:
Well, hey, Sandra, thank you so much for hanging out with us, for teaching us a little bit, and having this conversation.
Sandra Radna:
Thank you. This was a lot of fun. It was really great and very interesting talking to both of you. Thank you.
Pete Wright:
Where do you want to send people to learn more about your work? We'll put links in the show notes to every place appropriate.
Sandra Radna:
My website is radnalaw.com, R-A-D-N-A-L-A-W.com.
Pete Wright:
Got it, got it. Thank you so much.
Seth Nelson:
If you're in the great state of New York, the Empire State, got some questions, give her a call.
Pete Wright:
Yeah.
Sandra Radna:
Thank you so much.
Pete Wright:
Absolutely. I'll tell you, we are thrilled to be embarking on season six of this show. We've got a great lineup of folks coming to sit in with us and talk to us about the divorce process and you. In the meantime, don't forget, send us questions, howtosplitatoaster.com/askaquestion. You can ask us your divorce questions, just like Josh G. did. Be just like Josh, ask us a question, we'll talk about it on the show. We want to help you out. Again, on behalf of Sandra Radna and Seth Nelson, America's favorite divorce attorney, I'm Pete Wright, and we'll catch you next time right here on How To Split A Toaster, a divorce podcast about saving your relationships.
Outro:
Seth Nelson is an attorney with NLG Divorce And Family Law, with offices in Tampa, Florida. While we may be discussing family law topics, How To Split A Toaster is not intended to, nor is it providing legal advice. Every situation is different. If you have specific questions regarding your situation, please seek your own legal counsel with an attorney licensed to practice law in your jurisdiction. Pete Wright is not an attorney or employee of NLG Divorce And Family Law. Seth Nelson is licensed to practice law in Florida.
