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Working Through Untouchable Assets
Property division is a normal aspect of every divorce, yet that step gets more complex when digital assets are involved. Digital assets are becoming more mainstream, so it’s important to understand what happens with these assets in a divorce.
Digital Assets and Community Property
The first question of whether or not digital assets need to be divided in divorce lies with understanding California’s community property guidelines. Under state law, any property that is acquired by either spouse while they were married is considered community property and will be divided in the divorce. So if either spouse acquired any cryptocurrency, nonfungible token, or other digital assets while they were still married, then that asset will be divided in the divorce.
One important note to remember, however, is that gifts designated toward one spouse do not count as marital property. Instead, gifts are considered separate property; any digital asset that was gifted or inherited in such a manner does not need to be divided.
Challenges of Digital Assets
That then leaves one important question: how do you transfer assets that cannot be touched? Digital assets such as cryptocurrencies or NFTs are primarily stored in digital wallets; these assets can be transferred from one wallet to another. Therefore, should a digital asset like this be given to one spouse, then that spouse can simply create their own digital wallet for asset transfer.
However, if passwords are involved, then that creates additional complexity. Online privacy laws must be followed, even in a divorce. In order to best navigate these challenging scenarios, be sure to speak with your family law attorney for guidance.
Perhaps one of the more difficult aspects of digital assets is their value. Like stocks, the value of a cryptocurrency or NFT can change rather quickly. You should consider working with an outside expert who understands how to best appraise digital assets.
Ask Questions of Your Attorney
The role of digital assets in a divorce is still somewhat new and, therefore, requires the help of someone who understands how to expertly handle them. Your family law attorney can be a great resource of information for assets in a divorce. At Schweitzer Law Partners, we work to ensure that our clients are provided with the most accurate information at every stage of their divorce so that they can make the best decision for their future.
Learn more about divorce in California by calling our office at (626) 788-5225. You can also visit our website to learn more information or to request a consultation.