Who gets the crypto and the Trust fund? New trends in property settlement
Digital assets and cryptocurrency are becoming more common in Australian families and therefore are making a greater appearance in property settlement cases. Family Trusts have been used for many years to hold matrimonial assets.
So, who gets what in 2026?
Under Australian family law, cryptocurrency and digital assets will be considered property and are subject to mandatory full and frank disclosure by both parties. Similarly, disclosure in relation to the structure, control and assets of the Family Trust may be required to determine control of the trust and whether the assets of the Trust form part of the property pool or are a financial resource.
Digital assets could include:
- Cryptocurrencies like Bitcoin (BTC), Ethereum (ETH)
- Non-Fungible Tokens (NFTs), which are unique digital assets that may hold significant value
- Digital Wallet Balances, often containing a mix of crypto assets
- Online Accounts, which could include shares in digital platforms, digital businesses, or even valuable online gaming items
The challenge in dealing with cryptocurrency during a property settlement, is the volatile nature of their worth. Cryptocurrencies can swing dramatically in value, sometimes by more than 20 per cent in a single day.
In some cases, Courts may consider the value of the assets at different stages, such as the date of separation, the date of hearing, or the date of sale, depending on the circumstances.
Digital assets are also very easy to hide. Uncovering them can be an exhaustive process, and can involve reviewing bank and credit card statements, examining tax returns, trawling through emails, and even issuing subpoenas to crypto exchanges.
Whether assets are held in “hot wallets”, cold wallets stored offline, or exchange accounts, they must be disclosed in full. This includes wallet addresses, exchange account statements, transaction histories, and current balances.
Failing to disclose cryptocurrency holdings carries significant legal consequences.
What about the Family Trust?
There may be a misconception that Family Trusts are a way to hide assets during divorce proceedings and property settlement.
However, if the Court determines the assets of the Trust to be the property of the parties to the marriage, the assets may be considered in any property division.
The Court will consider several factors when looking at a Family Trust during a property settlement, including:
- Who has control of the Trust
- Who is a beneficiary
- The history of benefits and distributions from the Trust
- The timing and creation of the Trust
Trusts set up prior to the relationship are not immune from being part of the property settlement, however if the Trust was created long before the start of the relationship and was used mostly to benefit other family members, the assets of the Trust may be treated as a financial resource of a beneficiary rather than property.
If the parties (or one of them) control the trust and jointly contributed to a Trust created during the relationship, Courts are more likely to treat the assets of the Trust as part of the asset pool.
At Michael Lynch Family Lawyers, we understand property settlements can be an emotional undertaking. Our family law experts are here to help ensure the process runs smoothly for you and your family. We can help you with every aspect of a property settlement, including searching for hidden assets.
To make an appointment, contact our office today on: (07) 3221 4300 or email: [email protected]
