There was a time when few of us had heard of digital assets and cryptocurrency but when you are separating in an age where almost everything is carried out electronically and online it is important that your divorce solicitors understand the range of assets that your husband, wife or civil partner may hold and how to trace them.
What are digital assets in divorce proceedings?
There is no definition of a digital asset in divorce proceedings. That is probably sensible because the world of digital assets can change so fast with the latest developments in tech and online options.
Divorce solicitors find it best to outline the type of digital assets that you or your spouse might own to trigger a discussion about what you or your husband or wife might hold digitally. It is important to do that as whilst you may not forget about the existence of a holiday home, a collection of watches, or your partner’s shares in the family business, you may easily forget about an online bank account or the cryptocurrency that your spouse told you seemed like a good investment at the time.
Digital assets can include:
- Online share dealing account
- PayPal account
- Air miles
- Online gaming and betting accounts
- Income-generating social media accounts
- Sentimental assets such as some types of social media accounts and photo libraries
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Is cryptocurrency relevant to divorce financial settlements?
Digital assets such as cryptocurrency can be family assets in the same way as a property, pension or business can be. Just because something is online and not physical does not mean that it is not relevant to your divorce financial settlement.
Reaching a fair divorce financial settlement involves:
- Working out what assets a husband and wife own individually or jointly or with a third party
- Tracing assets where there are valid suspicions that assets have not been fully disclosed by the other party to the marriage
- Getting the assets accurately valued
- Understanding if the assets should be treated as family assets – even if the asset is not a family asset the court can have recourse to it if it is necessary to do so to meet a husband or wife’s needs
- Negotiating a divorce financial settlement and if that is not possible representation in divorce financial settlement court proceedings
Dealing with cryptocurrency in divorce proceedings
A good divorce solicitor combines bloodhound tracing skills with technical knowledge and a large dose of pragmatism. For example, an eBay account may not sound significant but it is if it is the prime source of sales in a family business or if a spouse has been squirreling money away by keeping it in a PayPal account. Likewise, everyone talks of cryptocurrency but you need to track down the information to find the investment or be able to show the discrepancies between disclosed assets and lifestyle.
Whilst some digital assets, like photos or the dog’s Instagram account, may only have sentimental value they still are important to you so need to be sorted out fairly but without racking up massive legal bills. It is a question of knowing when a forensic digital expert is needed to help track down digital assets and when pragmatism and common sense is the best option to sort out sentimental digital belongings.
When dealing with digital assets in divorce proceedings it is important to consider:
- Drawing up a digital inventory – what you know that you or your spouse holds as digital assets
- What you suspect and why you suspect it – was the talk of bitcoin hot air or is there a basis to trace assets or gather evidence of their existence
- Are the digital assets capable of being shared and if not, who will keep them
- The fairness of one spouse keeping the digital assets and the other keeping non-digital assets. That consideration may be relevant where there is a large online share dealing account subject to stock market fluctuations but an equally uncertain property market if the other spouse is keeping the family home