With the rise of technology, divorce proceedings are becoming more complex. If you and your spouse have taken part in cryptocurrency and are now getting divorced, you may be wondering how that will factor into the division of assets. Continue reading for more information and contact a York County, PA property division attorney for representation.
What is Cryptocurrency and How Does it Work?
Cryptocurrency is an online form of currency. It provides users with the ability to purchase, sell, and trade digital currencies anonymously and without the use of a bank. Popular types of crypto include Bitcoin, Zcash, Litecoin, and more. They are digital assets and can be found in the form of coins, tokens, art, videos, memes, cards, etc. The virtual exchanges are stored in online databases that protect the privacy of the owner, as you need a secret number – called a private key – that acts as a numerical signature on transactions. There is no intrinsic value in cryptocurrency which makes them volatile and difficult to predict or evaluate.
Is PA an Equitable Distribution State?
Pennsylvania is an equitable distribution state, not a community property state. Assets are divided during a divorce based on fairness and equity as opposed to a 50/50 split down the middle regardless of the unique factors of the relationship. In this case, the value of any jointly owned cryptocurrency will not be divided in half and distributed equally, but instead evaluated and distributed equitably.
Is Cryptocurrency Joint or Separate Property in a Divorce?
Like any asset during a divorce, cryptocurrency must be evaluated to determine whether is it martial property or individual property. In general, crypto that was purchased during the marriage or with marital funds will be considered joint property and have to be included in the division of assets. However, if one spouse owned the property before the marriage it may be considered individual property and not be included. However, it is treated like any other asset, so if the other spouse contributed to it such as monitoring, selling, etc. a court may deem it eligible for division.
What Are My Options for Cryptocurrency in My Divorce?
There are a few options that can be considered when determining how cryptocurrency will be divided. The best option for you will depend on the circumstances of your relationship, divorce, and assets.
One way to divide crypto assets is simply selling and liquidating the assets into cash and dividing the amount equitably. This is one of the more simple ways, however, because of the unpredictability of cryptocurrency it can be risky. The amount of cash you receive from the liquidation will depend on where the currency is on that particular day. The following day the value could skyrocket or plummet, no one can be sure.
You can also have the owner of the currency transfer ownership of the other spouse’s share to their name which allows both parties to receive their fair share without taking the currency out of the digital space.
If you both agree to it you can also have the value of the crypto determined and then award the other spouse other assets such as cash or real estate that equals the same amount.
