When a couple goes through a divorce, they must divide their assets equally. Because cryptocurrency is an asset, if a couple shares ownership of cryptocurrency, they will need to divide it alongside their other shared assets. This process can be simple or complicated, depending on the couple's unique circumstances.
Read on to learn the answer to "How is cryptocurrency divided in a divorce?" Then contact our attorneys at DiPietro Law Group for assistance.
Is Cryptocurrency a Marital Asset?
According to Virginia law, marital property includes any jointly owned property and all other property a couple has acquired from the date of the marriage until the date of the divorce. Meanwhile, separate property includes property purchased or owned before the marriage, received as a gift or inheritance during the marriage, or bought with income earned before the marriage.
Virtual currency is a type of asset that adheres to these property laws. If one spouse acquired the cryptocurrency during the marriage using money they earned during the marriage, the crypto would be considered shared property and be subject to Virginia's marital property division process.
How Does Virginia Divide Cryptocurrency in a Divorce?
Virginia is an equitable distribution state for marital property division. This means that if the court becomes involved in the divorce case, it would attempt to divide a couple's assets fairly and equitably.
In a divorce, a couple can attempt to divide their property independently. If they cannot agree on the property division, a judge can intervene to divide the property for them.
The judge would use the equitable distribution policy to split the property fairly between spouses. The judge may also consider the following factors during the property division process:
- Each spouse's income and debt
- Each spouse's age and health
- The length of the marriage
- Each spouse's ability to support themself financially
- Tax consequences of dividing certain property
With many types of property, a judge can easily determine a fair division for both parties. Because cryptocurrency is a more complicated asset without a clear value, this process may take more time.
Challenges of Dividing Cryptocurrency in a Divorce
A few factors can make dividing cryptocurrency more challenging than dividing other assets. These factors may include the following:
- Volatility: The value of cryptocurrency fluctuates frequently. The couple may need to liquidate it to determine its actual value.
- Tax consequences: Liquidating cryptocurrency that has increased in value can result in tax consequences on the gains. Couples may need to consider the post-tax value of their cryptocurrency during marital property division.
- Transferring assets: If a couple jointly owns the cryptocurrency, the judge may order them to transfer it into one of their names, which can be complicated.
- Tracing: Cryptocurrency can be easy to hide, which may encourage individuals to hide it from their asset inventories during the divorce.
Contact Our Qualified Virginia Divorce Attorney Today
If you're struggling with "How is cryptocurrency divided in a divorce?" or other aspects of the divorce proceedings, you need a qualified divorce lawyer on your side. Contact DiPietro Law Group, PLLC, today at 888-530-4374 to schedule your consultation.