Cryptocurrency has been around for decades, though it exploded in popularity in the late 2010s with the rise of Bitcoin. As such, many people have invested in these assets, from business owners and investors to college students and working professionals. Unfortunately, however, these assets can pose significant challenges when filing for divorce. As such, if you or your spouse owns cryptocurrency and has made the decision to end your marriage, the following blog explores what you should know about these matters, including the importance of working with Long Island property division lawyers to assist you through these complex legal matters.
Does New York Consider Cryptocurrency Marital Property?
It’s critical to understand that whether or not the cryptocurrency owned by you or your spouse is considered marital property will depend on when the investment was made or if it was co-mingled. Typically, in New York, an asset is considered marital property if it is purchased or obtained after a couple is legally married. This is true regardless of who owns the property or makes the purchase. However, assets that are obtained before the marriage may become marital property if they are co-mingled. For example, if you deposit funds from your crypto investment into a jointly owned account, they would become marital property. Additionally, if your spouse helps improve the value of the asset, they can be entitled to a portion of the funds obtained from their input.
As such, the court will examine a number of factors, like when the property was obtained, and how it has been handled over the course of your marriage, to determine whether or not it is considered marital property under New York Law.
How Are These Assets Valued?
Due to the fact that cryptocurrency is a decentralized asset, meaning it is not tied to any singular bank or regulatory system, it is considered an asset, as its value will fluctuate on a daily basis. While the fact that there is no central authority can impact the volatility of this asset, it is not the only thing that can impact the constant change in value. This means that determining the value of your assets can be incredibly difficult.
As such, it’s imperative to understand that you and your spouse may want to work with financial experts, as they can assist you in determining the value of the crypto that is subject to distribution during your divorce.
In some instances, the court may attempt to divide the asset based on its fair market value. This means that they will choose a valuation date, which is often the date on which you filed the divorce petition or the date on which your hearing is, to help determine how much the asset is worth.
Because cryptocurrency can be incredibly difficult to value and thus make a divorce complex, it’s critical to enlist the assistance of an experienced attorney. At the Sklavos Law Group, our team understands how overwhelming a divorce can be, especially when there are complex assets like cryptocurrency involved. If you are ready to file for divorce, contact our team today to learn how we can help you fight for the best possible outcome for your circumstances.