Divorce proceedings used to focus primarily on tangible assets: the family home, vehicles, jewelry, and physical bank statements. However, the nature of wealth has evolved. Today, significant value is often held in the digital realm, from cryptocurrency wallets to revenue-generating social media channels. If you ignore digital assets in a divorce, you risk walking away from a substantial portion of the marital estate.
At the Law Offices of Michael A. Robbins, we have experience in high-asset divorces where complex financial portfolios are the norm. Understanding how to identify, value, and approach the division of these intangible assets is critical to securing a fair settlement.
How Is Cryptocurrency Divided in Divorce?
Cryptocurrency is not invisible to the law nor untouched in divorce. The IRS treats virtual currency as property, not currency, for federal tax purposes. In a divorce, this means Bitcoin, Ethereum, and other tokens are subject to equitable division, similar to property like stocks or real estate.
A primary challenge with crypto is discovery. Unlike a traditional bank account that generates monthly paper statements, cryptocurrency can be held in offline storage devices or decentralized exchanges that do not issue standard reports.
To ensure a fair division, we must first verify the existence of these assets. This may involve:
- Reviewing bank statements for transfers to crypto exchanges.
- Identifying public keys and wallet addresses.
- Working with forensic accountants to trace transaction histories.
Once identified, the assets must be valued. Because crypto markets are volatile, selecting the correct valuation date is vital to help you receive your fair share.
Are Online Businesses Subject to Division?
Online businesses can be marital assets like any other business, but they present unique valuation challenges compared to brick-and-mortar companies. Whether it is an e-commerce store, a monetized YouTube channel, or a consulting firm run via Zoom, the business has value that must be properly determined. We verify that the business is valued accurately and that the non-operating spouse is compensated fairly for their contribution to the marriage.
How Is Intellectual Property Addressed in Divorce?
Intellectual property (IP) includes patents, copyrights, trademarks, and royalties. If a spouse wrote a book, patented an invention, or developed software during the marriage, the economic value of that work is likely marital property.
Courts typically aim to keep control of the IP with the “creator spouse.” The “non-creator spouse” is often awarded an equitable portion of the future income streams, such as royalties or licensing fees. It is important to note that if an invention was created in the course of employment, the patent rights usually belong to the employer, not the spouse, meaning there is no asset to divide.
How Are Digital Bank Accounts Treated Differently?
Online-only banks and payment platforms like PayPal, Venmo, and CashApp are frequently overlooked during the discovery process. Because these accounts are often linked to personal email addresses rather than physical mailboxes, funds may be moved or hidden more easily than in traditional joint checking accounts. It is not uncommon for spouses to “park” cash in these digital wallets.
Legal counsel can confirm that all financial disclosures include a comprehensive review of digital transaction histories. Every dollar must be accounted for, regardless of location, to calculate the marital estate correctly.
Protecting Your Financial Future With Digital Asset Division
The landscape of asset division is changing in today’s digitally-focused world. If your divorce involves cryptocurrency, intellectual property, or digital business interests, you need legal representation that understands the technical and legal nuances of modern wealth. For over 30 years, Michael A. Robbins has been a nationally recognized leader in family law, helping clients through complex financial separations with confidence. Contact the Law Offices of Michael A. Robbins today to schedule a consultation.