It is estimated that more than 20 million Americans own some type of cryptocurrency, which can create challenges during a divorce. Asset division that involves cryptocurrency is complex when compared to division of more tangible assets. During divorce proceedings, it is extremely important that all types of cryptocurrency are taken into consideration to prevent any financial disputes in the future.
Cryptocurrency basics
There are several types of popular cryptocurrencies. Bitcoin and Ethereum are two of the largest and most well-known. If one or both divorcing parties have any type of these alternative investments, the value must be disclosed when the assets are being divided. Knowing the actual value of cryptocurrency can be one of the most difficult parts of asset division in these cases.
Most types of cryptocurrency are very volatile. The value can change quickly, which makes it extremely hard to divide between the divorcing couple. Because asset division considers the value of all assets belonging to the divorcing couple, the addition of cryptocurrency can create a complication when trying to value the assets as a whole.
Considerations for those divorcing while holding cryptocurrency
It is important to consider tax implications during divorce proceedings, especially when related to cryptocurrency. If the currency purchased had a considerable gain, the purchaser may be subject to capital gain taxes if they choose to sell and split the proceeds. Splitting cryptocurrency between divorcees is usually no easy task.
There are many challenges that come with divorce. But dividing assets in a way that satisfies both parties can be quite problematic, especially when non-traditional assets like cryptocurrencies are concerned. Anyone who is going through a divorce can seek legal advice from an attorney with experience in asset division. This can significantly increase the odds that both parties come to a reasonable agreement that splits assets in a way that is both legal and fair.