How divorce attorneys are adapting to digital asset hiding tactics

Dina S. Kaplan, a New York family lawyer with more than 25 years of experience, says divorce cases now require faster detection of hidden money, cryptocurrency and AI-faked evidence. The shift matters because digital tools are making concealment easier to attempt, while new rules and forensics are also giving attorneys more ways to catch it.

Why it matters: - Divorce disputes are moving deeper into digital territory, where hidden accounts, crypto transfers and fake evidence can change custody and property outcomes. - The rise of cryptocurrency ownership and AI-generated media is forcing attorneys and courts to adapt their evidence checks and tracing methods. - New IRS reporting rules for digital asset transactions create a paper trail that can make concealment harder.

What happened: - Dina S. Kaplan, a partner at Berkman Bottger Newman & Schein, discussed how modern asset concealment is changing divorce litigation. - Kaplan has more than 25 years of family law experience. - Kaplan said, "We're only as good as what we can detect." - Kaplan said attorneys can miss concealed assets when they do not carefully review bank, brokerage and credit card statements.

The details: - The National Endowment of Financial Education says almost 40% of spouses have committed financial deception during marriage. - IRS data shows roughly 25 million U.S. adults held cryptocurrency as of 2024. - Gallup and Pew Research data put U.S. adult cryptocurrency ownership at 14% to 17%. - A Reuters analysis from August 2024 found blockchain analysis tools recovered more than $1.2 billion in hidden assets in legal disputes over the prior two years. - Starting in 2025, IRS rules require cryptocurrency brokers to issue 1099-DA forms for digital asset transactions. - Kaplan said unusual transfers and undisclosed accounts often show up only after close review of financial statements. - Kaplan said money usually leaves a visible initiation point even if the trail becomes harder to follow after transfer. - In 2025, a court rejected an AI-generated voice recording that was created from old WhatsApp voice messages and used in a custody dispute. - Forensic analysis uncovered the manipulation, the mother was charged with fabricating evidence, and the father regained full parental rights. - A federal judicial panel proposal advanced in 2025 said AI-generated evidence now requires the same reliability standards as traditional expert testimony. - Michelle O'Neil, co-founder of the Dallas-based law firm OWLawyers, said courts are seeing a "real increase" in fake evidence created with AI. - O'Neil said judges are being trained at schools and conferences to stay alert to synthetic evidence.

Between the lines: - Digital concealment is getting more sophisticated, but forensic tools and reporting rules are also improving the odds of detection. - Kaplan's comments suggest the bigger risk is not that hidden assets are impossible to find, but that attorneys may overlook clues already in plain sight. - The AI evidence cases show the problem extends beyond money and into custody fights, where fabricated audio or video can affect parental rights.

What's next: - Divorce lawyers are likely to lean more heavily on transaction tracing, blockchain analysis and forensic review of digital evidence. - Courts will probably keep tightening standards for AI-generated material as synthetic media becomes easier to produce. - The IRS reporting changes may give spouses and attorneys more documentation to challenge undisclosed crypto activity.

The bottom line: - In divorce cases, the new hiding place is digital, but the new detection tools are digital too.