May 07, 2024
Navigating the complex waters of divorce is challenging under any circ*mstance. Introduce cryptocurrency into the mix, and you have a legal landscape that’s as volatile and intricate as the digital currencies it contends with. Cryptocurrency, the once niche investment now hitting the mainstream, is more than just digital dollars; it’s an asset that carries significant implications for the dissolution of marriage.
If you’re a divorcing spouse looking to demystify the crypto-clad challenges of separation, you’ve landed in the right digital arena. Robbins & Licavoli, PLLC is here to shed light on this emerging digital asset, helping you navigate the complexities and understand the implications.
Understanding Cryptocurrency
To begin, understanding cryptocurrency and its distinction from traditional currency is crucial. Cryptocurrency is a digital or virtual currency that functions independently of centralized banks and government oversight, with examples including Bitcoin, Ethereum, Litecoin, and many others. Now, with over 420 million investors worldwide, the relevance and impact of cryptocurrencies cannot be overstated.
One key difference between cryptocurrency and traditional money is its decentralized nature. Unlike traditional currency, which a central authority controls and issues, cryptocurrency operates on a decentralized network of peer-to-peer computers. This absence of centralized control makes cryptocurrencies difficult to trace and regulate, highlighting their unique position in the financial landscape.
Cryptocurrency Is a Marital Asset
Under the law, cryptocurrency is considered a marital asset and subject to division in divorce proceedings. This means that if either spouse invested in or acquired cryptocurrency during the marriage, it will be included in the assets to be divided.
The challenge lies in accurately valuing and dividing these digital assets. Cryptocurrency values can fluctuate greatly, making determining an accurate, current value challenging. Additionally, due to its decentralized nature, tracing and identifying cryptocurrency assets can be difficult.
Moreover, there are concerns about spouses attempting to hide or transfer cryptocurrency assets to avoid division during divorce proceedings. This can complicate matters even further and make reaching a fair and equitable division of assets challenging.
Our Recommendations for Handling Cryptocurrency in Divorce
Given the complexities of dealing with cryptocurrency in divorce proceedings, we strongly recommend seeking professional help from a legal team experienced in handling these cases.
Here are some recommendations for handling cryptocurrency:
- Disclose all cryptocurrency assets: It’s crucial to disclose all cryptocurrency assets during divorce proceedings. Attempting to hide or conceal these assets can lead to severe legal consequences.
- Obtain a professional valuation: To accurately divide cryptocurrency, obtaining a professional valuation from an experienced cryptocurrency attorney or forensic accountant is essential.
- Consider tax implications: Be aware of any potential tax implications that may arise from transferring or retaining cryptocurrency assets during divorce proceedings.
- Work with a professional mediator: Mediation can be an effective way to navigate the complexities of dividing cryptocurrency assets in a divorce. A neutral third party can help parties reach a fair and equitable settlement.
- Update legal agreements: If you have a prenuptial or postnuptial agreement that includes provisions for cryptocurrency, be sure to update it accordingly during divorce proceedings.
Our Professionals Are Here to Support You
Cryptocurrency is a rapidly evolving and complex asset, especially when it comes to divorce proceedings. It’s crucial to seek professional help from experienced attorneys who understand the intricacies of dealing with cryptocurrency in divorce cases. By following our recommendations, you can confidently navigate this emerging digital asset. For more information on cryptocurrency in divorce, contact us to schedule a consultation. Let Robbins & Licavoli, PLLC, help you achieve a successful outcome in your divorce case.
