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August 5, 2025 • 13 mins

We all know that divorce settlements often get ugly. 

We hear stories about the couples who chainsaw couches in half, such is their disagreement over who is entitled to get what. So, who knew that, behind our backs, divorce settlements have been getting even messier? 

Today, legal affairs reporter Michaela Whitbourn on the new methods that couples are using to hide their assets.

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Episode Transcript

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S1 (00:01):
From the newsrooms of the Sydney Morning Herald and The Age.
This is the morning edition. I'm Samantha Selinger Morris. It's Wednesday,
August 6th. We all know that divorce settlements often get ugly.
We hear stories about the couples who chainsaw couches in half,

(00:21):
such as their disagreement over who's entitled to get what.
So who knew that behind our backs, divorce settlements have
been getting even messier? Today, legal affairs reporter Michaela Whitburn
on the new methods that couples are using to hide
their assets. So Michaela divorcing couples, they've traditionally fought over

(00:45):
property settlements, right. And things like that. But you've spoken
to family lawyers who've told you that they're now helping
married couples navigate really a new battleground as they part ways?
So what are people now fighting over?

S2 (00:57):
Yeah. That's right. So obviously, as the types of property
change over time. And we have a sort of a
new category of digital asset emerging. Couples are fighting over
those kinds of assets too. So we're talking about rewards points,
frequent flyer points, cryptocurrency, that sort of thing. And it
stands to reason that you would need to have a
reasonable number of any of those sorts of assets for

(01:20):
it to be worth fighting about. But lawyers are certainly
telling me that this is now a battleground in property disputes.

S1 (01:27):
And one family law specialist who you spoke to, Josephine Sergi,
she told you that frequent flyer points, they're often an afterthought,
like which I would have thought was reasonable and that
people sort of don't often provide details of those assets.
But the way they're being divided during divorce proceedings is
actually quite contentious, right? So why is that?

S3 (01:47):
Yeah. I mean, I don't find.

S2 (01:48):
It surprising that it's a category of asset that's an afterthought.
I mean, when you're thinking about the kind of assets
that are top of mind, it's going to be, you know,
any homes that you might own if you're lucky enough to,
you know, cars, that kind of thing. Frequent flyer points
for most people maybe are not in the category of
a prized possession, but it really depends. If you know
you're running a family business or something like that, you

(02:09):
might have racked up together a significant number of points,
and they're still useful. I mean, they could be used for,
you know, ferrying children around or whatever else. If you're a,
you know, frequent travelers, as you may well be, but
you do have a duty to disclose to your former
or soon to be former spouse all of your assets.
And they might be the kinds of things that, for
a time at least, sort of fall through the cracks.

(02:30):
But lawyers are obviously encouraging their clients or prospective clients
to make sure that they turn their minds to these
kinds of assets as well. And as we can see
in some of the cases that have actually made it
through to a court decision, because many of them settle,
they do become contentious. And if you've got a huge
number of them, in one case, it was millions of points.
That is a significant asset that can be divided up

(02:52):
by the court.

S4 (02:53):
And is there any suggestion.

S1 (02:54):
That people are sort of intentionally hiding this asset, because
you wrote about one family court case in 2017 when
the justice said that the de facto husband didn't disclose
the full details of the frequent flyer account, and there
was a combined 1.7 million points, like, are people doing
this intentionally?

S3 (03:14):
It's really hard to say.

S2 (03:15):
I mean, I'm sure that whoever had all those points
thought that they were quite valuable to them, whether or
not they just didn't remember to disclose them, or they
didn't want their soon to be former spouse to have
any of them, it's hard to say. But you can
imagine that there might be an unwillingness to part with
that many points.

S4 (03:30):
I honestly.

S1 (03:31):
I didn't know people racked up that many points, but
I mean, yeah, that's incredible.

S2 (03:34):
No, no. Turns out you don't rack them up from
just walking around suburbia.

S1 (03:38):
Yeah, exactly. But it isn't just frequent flyer points, right,
that people are now fighting over. And that can be
quite important assets really, because there's also cryptocurrency that you've
written about. It's the biggest growth area in digital assets
before family courts. But cryptocurrency is actually much easier to
hide compared to a traditional bank account or real estate. Right?

S2 (03:58):
Yeah. That's right. It's obviously not impossible to trace, but
it may be the case and is commonly the case
that it's much more anonymized. It's harder for family lawyers
to trace particular amounts of cryptocurrency back to a person.
Some of the experts have told me that, for example,
if you're paid in cryptocurrency, rather than converting cash later
into cryptocurrency, that can be really hard to trace. Forensic

(04:22):
accountants can help. So it's certainly not impossible. And obviously,
lawyers would be encouraging their clients, as is their duty
to disclose all of those assets. But it does appear
to be a way that some people are hiding some
of their wealth.

S4 (04:37):
And tell us about one.

S1 (04:38):
Case you wrote about, because you wrote about an instance
where a wife had only discovered that her husband had
all this cryptocurrency because of something she actually saw in person.
So tell us about that one.

S2 (04:48):
Yeah. That's right. So Josephine, Sergey told me that one
of her clients had spotted her ex-husband visiting a crypto ATM,
and that's how she became aware that he must have
some of that digital asset. And then that kind of
prompts lawyers to investigate a whole other line of inquiry, really,
like how are we going to find out if that's
a considerable holding? And, you know, there are ways to

(05:12):
go about trying to trace that information. So the biggest
problem with cryptocurrency is that there isn't really a central
repository that you can necessarily go to, or your lawyer
can go to, to access all of the records of
someone's cryptocurrency holdings. That doesn't mean there's no way to
track these transactions. That's absolutely not the case. It just
might be more of a forensic exercise. So, you know,

(05:33):
if a person has withdrawn cash from a traditional ATM
and they've used that to invest into cryptocurrency, you can
trace quite easily the initial withdrawal of the cash. And
it may well be that you can trace with relative
ease the subsequent transactions. It's just that there's not a
central repository. And ownership of cryptocurrency typically is somewhat anonymized.

(05:56):
So that's the key issue there, that it's just this
different category of property. And it is harder to trace.
It's going to be more difficult for lawyers, and they're
going to have to be more forensic about getting the
full picture of their assets.

S4 (06:10):
And so with digital.

S1 (06:11):
Assets being so volatile, I guess, how difficult is it
for family lawyers now to work out how these assets
are going to be divided so that it's actually fair
for both parties?

S2 (06:22):
Yeah, that's a really good question because valuation is also
going to be key because those assets, as you say,
are quite volatile and you might be needing to value
them more often than you would need to value a home.
That is kind of also relevant to whether or not
a person would necessarily want those assets as part of
a property settlement. I imagine that most people still want,

(06:42):
you know, a significant stake in a former home, and
they might not be as invested in finding out about
all of the cryptocurrency holdings or want any of it
transferred to them, because that might also have tax consequences.
But it really depends how much is there.

S4 (06:57):
And you also.

S1 (06:58):
Wrote that the various cryptocurrency exchanges such as Coinbase, Kraken
and Bitstamp, They actually sometimes assign different values to the
same coin. So does this just make it a painful,
painful process when people try to, I guess, decide what's
fair and actually get this stuff divided?

S2 (07:15):
Yes. And it can also be difficult for the court
because they can't infer that this cryptocurrency has a particular value.
They need the parties to be informing them, or experts
to be informing them about the value. And sometimes that
can be so hard that I've seen at least one
decision where a judge just sort of left that to

(07:37):
one side and didn't include the cryptocurrency in a property
settlement at all, because there was conflicting evidence about how
much an ex-husband might have invested in it and whether
or not he'd made a loss. And it was just
too difficult. I mean, obviously, in that case, it wasn't
suggested that it formed a significant part of the pool
of assets, but nevertheless, it was just too difficult for
the court on the evidence before it to get to

(07:58):
the bottom of that.

S1 (08:06):
We'll be right back.

S4 (08:11):
There was another.

S1 (08:12):
Thing you wrote about that. I thought a lot of
people are probably going to be like myself, and I
had no idea this was the case. But there's been
changes to the Family Law Act just this year that
actually make family pets now a new frontier for fighting
as well. So tell us about this.

S2 (08:26):
Yeah. That's right. So family pets have for many years
been part of property settlements. But as the name suggests,
they've been considered just a type of property really, like
any other inanimate object, which obviously doesn't reflect how most
people think about their treasured pooch or, you know, other
furry friend. And so the courts have effectively been given

(08:46):
these new powers now in the Family Court Act that
kind of provide a different lens through which to view
the family pet. They're still a form of property, so
they're not considered a person or anything like that, but
the kind of analysis that the court does when it
considers who is best placed to be given ownership of
the pet. It will be assessed differently. So, you know,

(09:07):
factors like who has been caring for the pet, who
is best placed to continue caring for them. Those kinds
of things will wane. The court's reasoning. And of course,
that probably did factor into court's reasoning before, but it
now it's much more explicit in the legislation. And so
it's easier to do.

S1 (09:24):
Okay. And there was one line in your piece that
honestly gave me pause. I couldn't believe it, because family
law expert Jody Lee Bartel told you that the court
could only grant ownership of the pet to one party. Okay.
So no shared custody, and it could also order that
it be sold or order that its ownership be transferred
to a third party if that party consented. So tell us,

(09:44):
like the court can order that your family pet be sold.
What's happening there?

S2 (09:50):
Yes. Now, I mentioned the circumstances in which that happened
would be really uncommon, but you can imagine that some
family pets are actually quite valuable, even in a monetary sense.
Of course, there's a lot of other, you know, value
attached to these animals that is not tangible in a
financial sense. So I can't imagine that would be happening often. But,

(10:13):
you know, it reflects the fact that pets remain property
under the law, even if they do have this elevated
status now.

S1 (10:20):
Wow. I'm just wondering if you can reflect on, like,
what are we to make all up of these changes
to the assets that couples are now fighting over in
divorce settlements, like, does it say anything in particular about
where our relationships are at, or is it perhaps a
nod to our ongoing cost of living crisis? And people
are sort of just fighting for everything they can get
to keep up, like what's going on?

S2 (10:42):
I don't think it necessarily reflects cost of living unless the,
you know, as I say, the holdings of particular types
of digital assets are really considerable. It's probably not necessarily,
you know, going to be sort of the crux of
any property settlement, but I think it just reflects the
types of property are evolving. And this is very much

(11:04):
a category of property that is new. It's not like
it's specifically mentioned in the Family Law Act, but family
law is obviously need to keep on their toes and
recognize the evolving nature of property, including the elevated status
of pets.

S1 (11:17):
And there was something you told me before we started
recording that was so interesting and I didn't realize, which
is that divorce rates are going down, which is very interesting.
So is that maybe because it's just so expensive to
split that people are thinking, okay, we're just not even
going to go there? Is that what's happening, or is
it something else?

S2 (11:34):
Anecdotally, some family law experts have suggested to me that
it is the cost of living and indeed the cost
of housing that might be sort of the glue that
is keeping some couples together. But I wouldn't say that
that's necessarily. Well, it certainly isn't all couples. There could
be other reasons, including that, you know, there's not as
much societal pressure to be getting married anymore. So perhaps

(11:57):
those that take those vows are fairly committed to them,
but who knows? I guess that's a question for a
social demographer.

S1 (12:05):
Oh my goodness, what a battleground nevertheless. So thank you
so much Michaela, for your time.

S2 (12:10):
Pleasure.

S1 (12:20):
Today's episode of The Morning Edition was produced by Josh towers.
Our executive producer is Tammy Mills. Tom McKendrick is our
head of audio. To listen to our episodes as soon
as they drop, follow the Morning Edition on Apple, Spotify,
or wherever you listen to podcasts. Our newsrooms are powered
by subscriptions, so to support independent journalism, visit The Age

(12:43):
or smh.com.au. Subscribe and to stay up to date, sign
up to our Morningedition newsletter to receive a summary of
the day's most important news in your inbox every morning.
Links are in the show. Notes. I'm Samantha Selinger. Morris.
Thanks for listening.
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