Cryptocurrency as a marital asset is a relatively new concept for family law clients and their attorneys; cryptocurrency itself has only been available as an investment for about a decade. Cryptocurrency values have skyrocketed in the last several years, so many early investors are already seeing sizable returns on their initial investments. So when these investors decide to end their marriage, how is the value of cryptocurrency equitably divided during a divorce? The answer isn’t always straightforward.
Defining Your Marital Assets
Before determining how to divide any investment account, including investments in cryptocurrency, your divorce consulting attorney must determine whether they are a marital or nonmarital asset. If you acquired the investments prior to your marriage, it’s possible that some part of their value is not up for grabs in your divorce. Generally, only the appreciated value of an asset is considered marital property. Of course, there are exceptions to the rule, so you should speak with a divorce lawyer for men about whether this applies to your case.
If you purchased cryptocurrency after you were married, you can assume your spouse is entitled to an equitable division of those assets.
Dividing Your Assets with Crypto Investments
If your crypto investments qualify as marital property, their value will be added to the value of your other marital assets. The concept of dividing assets in high net worth divorces is not new, and experienced family law attorneys have seen just about every possible way to reach a settlement by now. One common misconception is that every asset is “split.” This is untrue for two reasons. One, an equitable divorce does not mean equal. Each party is not always entitled to 50% of the marital assets. Two, one party will often retain full control of one asset, like an investment account, while the other party receives other assets to compensate.
If you were the one to invest in cryptocurrency, you’re probably more likely to want to retain those investments after the divorce than your wife is. This is certainly something your attorney can negotiate. Unfortunately, many divorce attorneys for men have seen contentious negotiations where one or both parties request assets they don’t even want to spite their spouse. This may come up with cryptocurrency if you’re dealing with a high-conflict divorce. If your wife knows cryptocurrency is an enjoyable hobby for you and wants to hurt you, she may refuse any settlement where you get to keep the investments. Even still, a judge is likely to take into account who started and maintains the account when determining which party should get to keep the investments in the divorce.
Cryptocurrency is a lucrative investment, but it’s important to remember it isn’t exempt from being considered in your divorce. Any gains you make on crypto will have to be balanced out by sacrificing other assets to your spouse. Consider these issues carefully before you invest, especially if you believe a divorce may be in your future.