Dividing cryptocurrencies or cryptos between spouses is a complex process because of their nature, which could cause tension in a divorce. If you are currently negotiating terms with your partner, understanding how crypto distribution works would be beneficial for both of you.
What makes dividing crypto assets challenging?
Compared to other marital assets, cryptocurrencies present unique challenges because of the following:
- Tricky appraisal: The value of crypto coins changes multiple times in a day, making valuations hard.
- Anonymity and potential for hidden assets: The anonymous nature of crypto could motivate you or your spouse to hide digital assets during declaration.
- Protected transaction history: Blockchain technology records all transactions but conceals the identities of buyers and sellers, complicating asset division further.
- Detailed accessibility: Crypto owners store their coins in digital wallets or protected hard drives. If you or your partner loses access to these, it would be impossible to retrieve the asset.
Despite the complexities of cryptocurrencies, dividing them between you and your spouse is still possible.
How does dividing digital coins happen during a divorce?
Courts in Denver divide assets fairly, which does not always mean equal distribution. The same logic applies to cryptocurrencies since courts see them as financial investments.
Your divorce attorney must follow these steps to help ensure a fair division:
- Declaration: Disclose all digital assets.
- Valuation: Estimate the value of cryptos. You and your partner may decide on a specific date of valuation or a different appraisal.
- Categorization: The court examines which cryptos are marital or separate property.
- Allocation: Once the court has found the assets as marital property, it will decide how to divide cryptos fairly.
The court may ask both you and your spouse to discuss how the division of cryptos will happen. You may choose to liquidate all digital coins to dollars and work from there or divide them in their digital state.
What can you do to ensure fair division of digital assets?
Collaborating with your spouse could help create a plan to divide your cryptocurrencies fairly:
- Separate your cryptos from your partner.
- Be honest in declaring the date of purchase to easily distinguish marital and separate properties.
- Discuss the amount you want to have and why.
- Be open and offer alternatives.
If you have irreconcilable differences during discussion, seeking assistance from a property division attorney may help provide clarity and guidance.