If you own cryptocurrency and you are anticipating a divorce in the near future, you are likely wondering whether you will need to give up your cryptocurrency in the divorce case. In other words, you may be wondering if your cryptocurrency will be divisible property during the phase of equitable distribution. Whether or not you will need to give up your cryptocurrency will depend upon the specific facts of your case. The first question will be whether or not your cryptocurrency is considered to be marital property or separate property. Then, if your cryptocurrency is marital property, you may not need to give it up, but it will be subject to distribution. Our Michigan divorce attorneys can provide you with more information.
Understanding Cryptocurrency
To understand how cryptocurrency may be divided in a divorce, it is critical to understand exactly what cryptocurrency includes. According to NerdWallet, cryptocurrency, which is often known more simply as “crypto,” is “a class of digital assets created using cryptographic techniques that enable people to buy, sell or trade them securely.” Units of cryptocurrency are known either as coins or tokens, as NerdWallet explains. Bitcoin, which you might have heard of, is a type of cryptocurrency. It, along with other cryptocurrencies, is supported by something known as “blockchain.”
Valuing Cryptocurrency is Complex
In order for cryptocurrency to be divided in your divorce, it will need to be classified as marital property. To be clear, under Michigan law, the court will classify all assets as separate (or nonmarital) property or as marital property. Only marital property is subject to division. Accordingly, if your cryptocurrency is separate property, you will not need to give it up in your divorce case. Generally speaking, assets acquired before the date of marriage or during the marriage as a third-party gift or inheritance are the only types of separate assets.
If your cryptocurrency was purchased after the date of your marriage and is considered marital property, it will need to be valued and divided. As an article in CNBC explains, valuing cryptocurrency for purposes of dividing it in a divorce can be extremely complicated. Cryptocurrencies are notoriously volatile, and many people have recently lost money by owning cryptocurrency.
Options for Keeping Cryptocurrency in Your Divorce
If your cryptocurrency is marital property, there may be options to keep it. Depending upon the value of the cryptocurrency, you may be able to enter into a settlement agreement with your spouse so that you retain the crypto and your spouse receives a different asset (or assets). Even if you do not enter into a settlement agreement, the court might decide that you should retain the cryptocurrency and will divide the remaining assets accordingly, based on the equitable distribution factors used in Michigan divorces.
Contact a Michigan Divorce Attorney
Anyone who is getting divorced and has questions about complex property classification should get in touch with a Michigan divorce attorney as soon as possible. Cryptocurrency poses many different challenges in a divorce case, and it is essential to have an experienced lawyer on your side to assist you with your case. Contact the Law Offices of Michael A. Robbins to learn more about how we can assist you with cryptocurrency and other complex property division issues in your Michigan divorce.