In the modern world of technology, life continues to become more advanced. Everything is online now which can be convenient for everyday life. When it comes to a divorce, however, it can make things more complicated. The division of assets can be complex to figure out during a divorce, and with new-age assets such as cryptocurrency, it can feel confusing and overwhelming. Acquire the services of a Memphis, Tennessee property division lawyer to help you navigate your divorce and division of property.
What is Cryptocurrency?
Cryptocurrency is a digital currency that can be bought, sold, and traded through virtual exchanges. These exchanges live in what is known as a blockchain. A blockchain is a database that records and stores transactions and allows people to transfer their crypto assets without a bank. The most notable cryptocurrency is Bitcoin, which can be found in the form of digital coins, tokens, artwork, memes, trading cards, and more.
One major issue with cryptocurrency when it comes to a divorce is that it can be difficult to identify and track ownership. One spouse may be hiding assets through the use of cryptocurrency as a way to avoid paying their ex. Without a private key (a secure number signature on transactions), there is no easy way to locate and calculate crypto assets.
What is Equitable Distribution?
Tennessee is an equitable distribution state. This means that during a divorce assets are split between each spouse in a manner that is fair, not necessarily equal. In some cases, an equitable split will be 50/50. However, depending on the individual relationship, it could look more like 60/40 or some other variation.
Is Cryptocurrency Marital Property?
To figure out how cryptocurrency is divided in a divorce, the first necessary step is to determine if it is marital property or separate property. Crypto that was bought or acquired during a marriage and/or with the use of joint funds will be considered marital property and be distributed between the two spouses. If one spouse already owned the cryptocurrency before the marriage it will likely be considered separate property.
How Will Cryptocurrency Get Split Up in My Divorce?
Once the cryptocurrency has been located and accounted for, you will need to agree on how to divide the assets. It is largely treated like any other physical asset, but because of its unstable nature, cryptocurrency is constantly fluctuating in value. This can complicate things, but there are a few ways to determine the distribution, including:
- Simple division, where one party is given their fair share of the cryptocurrency when the divorce is finalized.
- Liquidation, where the owner of the cryptocurrency liquidates the assets into cash, and the money is divided. Because there is no intrinsic value in digital currency, the amount of cash it can be turned into will vary depending on the day.
- Custodial holding, where a neutral third party receives and holds a portion until the divorce is finalized.
