Divorce can be emotionally devastating and financially complicated. One of the most contentious issues that must be addressed is how to divide marital property between the spouses. A relatively new asset that has become widely available and must be considered during divorce is cryptocurrency. While the process remains the same, there are certain complications that can arise when dealing with this sort of digital property. If you have questions or concerns regarding how cryptocurrency can be divided in your divorce, reach out to an experienced Montgomery County property division lawyer today.
What is Cryptocurrency?
Cryptocurrency is a digital or virtual currency that acts the same way standard money does, in the sense that it can be used to purchase goods and services. Traditional currencies are issued and regulated by the government. However, cryptocurrencies operate under a decentralized network that uses blockchain technology. A blockchain is a digital ledger that records transactions using cryptography for security. Cryptocurrency can be bought and sold on online platforms as well as stored in digital wallets.
Is Cryptocurrency Considered Marital Property?
One of the most important factors when it comes to dividing assets in a divorce is determining which assets are marital property, as in jointly owned, and which are separate property, as in owned by one spouse.
In Pennsylvania, marital property can include most assets acquired by either spouse during the marriage, and any property that both spouses have contributed to, financially or otherwise. If the cryptocurrency was acquired during the marriage, it is generally considered marital property and subject to equitable distribution, regardless of whose name is on the account.
If one spouse owned cryptocurrency before the marriage, it could be considered separate property. However, any increase in value that occurs during the marriage can be included in property division.
How is Cryptocurrency Divided in a PA Divorce?
When dividing assets in a Pennsylvania divorce, cryptocurrency is treated the same as any other piece of property. It must be valued and split between the spouses in a manner that is fair based on each individual’s financial situation.
When determining how much of the asset each spouse is entitled to, the court will evaluate a variety of factors, including the length of the marriage, each spouse’s income and earning capacity, contributions made to the marriage by each spouse, and more.
Because of cryptocurrency’s digital nature, the asset is often more difficult to track than cash or funds in traditional banks and other accounts. There is a risk that one spouse may attempt to hide assets. However, Pennsylvania courts require full financial disclosure from each party to ensure that asset division decisions are made with all relevant information.
Understanding your legal rights and options regarding property division is crucial. To learn more about digital assets in your divorce, reach out to an experienced attorney today.
