The Emerging Conundrum of Digital Assets at the Time of Separation
You can’t read more than a handful of news pieces without encountering cryptocurrency terminologies like Bitcoin, Ethereum, and Dogecoin. Although cryptocurrency’s popularity has waned in recent months, it is certain to remain because of the explosive growth it has experienced over the past few years.
You may be curious about the treatment of bitcoin assets before, during, and after a divorce if either you or your ex-spouse owns any. Divorce is never easy, but with the guidance of a qualified divorce attorney at The Harris Firm, LLC, you can figure out how cryptocurrencies can factor into the division of your assets.
Cryptocurrencies and the Law
Cryptocurrency is considered an asset under the law like other types of property such as real estate or antiques are. Whether or not an asset is considered marital depends on when it was acquired (before or during the marriage) and whether or not it increased in value during the marriage. Cryptocurrency in Alabama will be shared according to the principles of equitable distribution rather than equally.
Separating Cryptocurrency During a Breakup
Cryptocurrency distribution is a difficult undertaking. To begin, there is a great deal of uncertainty in the bitcoin industry. Valuing foreign currency holdings is complicated since certain currencies’ value can fluctuate widely daily. There is a good chance that the value will have decreased by the time the divorce is finalised compared to when you were negotiating the split of assets.
You’ll also need to determine the proportions by which the cryptocurrency will be distributed. It’s possible that both parties would prefer to maintain the status quo of their respective bitcoin holdings if they are actively trading in the market. Each partner can then transfer the agreed-upon amount to their own digital currency wallet. Thus, there is no longer any problem with determining what the coins are actually worth.
If only one of you is into cryptocurrencies, the other could choose to be paid in fiat. The divorce valuation procedure can be complicated, but your attorney can help you understand it and determine how much your portion is likely to be worth. Someone who doesn’t desire bitcoin may agree to give all of it to someone else in return for something else.