Over the past few decades, the assets divided during divorces have changed due to the technological boom of the 2000s. However, one popular asset that can still be tricky to handle during a divorce is cryptocurrency. Like NFTs, crypto has become increasingly popular, and with the rise in popularity, it can be difficult to navigate. As such, if you or your spouse owns this type of asset, the following blog explores what you should know about how it can be divided. You’ll also learn why it is in your best interest to connect with Somerset County property distribution attorneys to help protect your best interests during these matters.
What Is Cryptocurrency?
Cryptocurrency is a type of digital asset that represents money without being tied to a physical form. This means if you own cryptocurrency and use it to make a purchase, you are not exchanging funds, per se, but rather a key that represents the value of the digital currency. Its value is dependent on several factors, not unsimilar to how the stock market works. This means the value of crypto can change on a daily basis, making it a relatively volatile asset.
It’s also important to understand that, unlike physical cash, there is no central system to oversee this market. Instead, computer networks are utilized to verify transactions. This is reflective of the blockchain technology utilized to record all transactions that occur on public networks.
Cryptocurrency is obtained through a process called mining, which occurs when computers solve difficult math problems to produce the asset. However, it’s also possible and common to purchase crypto from brokers.
How Is this Handled During a Divorce?
Understanding how cryptocurrency is handled during a divorce is critical to protecting yourself. Generally, the most important thing to consider is whether or not this is considered marital property. In New Jersey, for an asset to be deemed a joint asset, it must have been obtained by one or both spouses after the marriage. As such, if your spouse purchased crypto following your legal marriage, it can be considered marital property. This means it is subject to division during your divorce.
However, it’s also important to understand that marital property is divided according to New Jersey’s equitable distribution process. This means that your assets are not automatically split evenly, but rather divided based on each spouse’s contribution to the marriage.
You should note that one issue with cryptocurrency and divorce is that it can be hard to determine the value, as it is constantly changing. As such, the court will attempt to value the asset based on its worth on the day you and your spouse separated.
When you are going through a divorce and your spouse owns complicated assets, it’s imperative to understand your options. At the Siragusa Law Firm, our dedicated team will do everything possible to help you receive the best possible outcome for your circumstances. If you need help, contact our team today to learn how we can assist you through these difficult matters.