In a high-asset divorce, cryptocurrency often becomes a central and contentious part of the negotiations. While its volatile nature makes digital currency a difficult topic, these assets can be divided according to California’s community property laws. An experienced Huntington Beach divorce attorney can help you understand how these laws apply to the factors in your case.
Why your digital assets are subject to division
Under California law, courts presume that any asset acquired during your marriage is community property. This means your crypto is likely subject to a 50/50 split, regardless of whose name is on the digital wallet.
If you acquired digital assets before marriage, they may count as your separate property. However, it is important to note that you must clearly trace their separate origin and that you have not commingled them with marital assets.
Why crypto is different from other assets
Bitcoin, Ethereum and non-fungible tokens are volatile or have unpredictable valuations. Your holdings can drastically change in value daily, making it a significant hurdle during property division.
California courts generally value assets near the time of trial, though a party may request an alternate valuation date upon a showing of good cause. Forensic accountants can then use cryptocurrency exchange platforms and trackers to determine an asset’s fair market value on the determined valuation date.
How cryptocurrencies cause conflict in divorces
Unlike houses or bank accounts, you or your spouse can store cryptocurrency in a cold hardware wallet or on a decentralized exchange. These do not send monthly paper statements, making them hard to track.
These features can make it tempting to hide digital assets during a divorce, but California law forbids this. The state imposes a strict fiduciary duty on both spouses to provide a full and accurate disclosure of all assets. Attempting to overlook crypto can lead to severe court sanctions.
Taking action to ensure equal division
Property division can be a sensitive topic in high-asset divorces. Instead of facing the matter with emotions, approach it with objectivity. Seeking counsel from an experienced attorney is wise for navigating blockchain nuances and the legal process of divorce.