It’s no secret that divorces have drastically changed over the past few years, especially in terms of what assets are subject to division. As such, digital assets are becoming much more commonplace during these legal matters, and many are unsure how these assets are handled during these matters. If you or your spouse owns cryptocurrency and you don’t know what to expect during the property distribution portion of your divorce, you’ll want to keep reading. The following blog explores what you should know about this asset and the importance of working with a Long Island property division lawyer to help you explore your options.
What Is Cryptocurrency?
Cryptocurrency is a form of digital asset that functions similarly to cash or coins but does not have a physical form. This asset solely exists digitally through technology known as blockchains. These blockchains are the ledger used to verify and record transactions. It’s imperative to understand that, unlike traditional currency, crypto is decentralized, meaning there is no financial institution that controls these assets.
You should also note that crypto is often considered volatile, as its value can depend on a number of factors. As such, its value can change drastically, making it hard to determine how much it is worth.
How Do the Courts Divide This Asset?
First and foremost, it’s imperative to understand how the courts in New York divide any assets during a divorce. Generally, the first step is to determine what is joint versus separate property. Typically, any asset owned before the marriage or after the divorce is separate property and not subject to division. However, any asset obtained during the marriage is considered the property of both spouses, regardless of who made the purchase or technically owns it. These assets are subject to division during your divorce.
Once it’s been determined what assets are marital versus separate, it’s important to understand how the courts will split this property. New York adheres to the equitable distribution method, meaning it will divide property based on each spouse’s contributions to the marriage, both domestically and financially. As such, cryptocurrency is subject to these rules.
As previously mentioned, crypto is very volatile and difficult to value. If your crypto is deemed marital property and subject to division, the court will attempt to determine its value on the date of your separation to see how much the asset is worth.
Navigating cryptocurrency during a divorce can be incredibly difficult. That is why it’s in your best interest to connect with an experienced attorney with the Law Offices of Jay D. Raxenberg, P.C. We understand that navigating the emotions of a divorce is challenging enough, which is why our firm is committed to assisting you during these challenging times. When you need help, our firm is here. Contact us today to learn more.
