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How to Divide Cryptocurrency in a Michigan Divorce

Posted on in Divorce

Novi asset division attorneyCouples have been getting divorced for centuries, and while the process may be standard, societal changes can cause divorce attorneys to adjust their approach. One recent issue that may complicate the asset division process is dividing cryptocurrency. The concept of cryptocurrency can be confusing for most people because it is a relatively recent invention. However, if you do own a form of cryptocurrency, such as Bitcoin, and are going through a divorce, finding a qualified divorce attorney who understands how to divide cryptocurrency should be your first step.

What Is Cryptocurrency?

Cryptocurrency is a type of financial exchange that is conducted through the internet. It does not belong to a bank, so there are no fees needed to keep it in an account online. Cryptocurrency is governed by computer code, and its computer technology limits the number of virtual "coins" in circulation. When either spouse owns cryptocurrency in a divorce, it is treated as intangible property. 

How to Value Your Cryptocurrency

Cryptocurrency is hard to value, and the market can be extremely volatile. Due to fluctuating exchange rates, virtual currency owned when a divorce commences could be worth 300 times its value by the end of the settlement, or it could be 300 times less. During the divorce process, the value of a cryptocurrency can be determined by calculating the Fair Market Value, or what it would be worth if exchanged for cash. 

Fair Ways to Divide Cryptocurrency

Because of the inconsistency of the value of cryptocurrency, it may be unfair to have the spouse who owns the cryptocurrency pay the other spouse for half of its value in dollars. To divide virtual currency evenly, it may make more sense to divide the cryptocurrency itself, transferring ownership of half of the virtual coins to each spouse's virtual "wallet." However, one spouse might not want to set up a wallet or deal with cryptocurrency at all. If one spouse was the primary owner of cryptocurrency, while the other spouse was not involved or experienced in these matters, the other spouse will most likely prefer to retain cash or other assets. In some cases, the best option may be to liquidate the total amount of cryptocurrency and divide the monetary value fairly between spouses. 

Contact an Oakland County Divorce Attorney

The tricky part of cryptocurrency is that it can be very hard to trace and divide. A divorce attorney can help you ensure that all of your assets are divided fairly, including addressing ownership of virtual currency or other assets that are not as easy to place a value on. Finding an attorney who will prioritize your financial interests throughout the course of your case is crucial. Our knowledgeable Farmington Hills, MI asset division lawyers can provide the legal help you need as you work to reach a favorable divorce settlement. Schedule a free consultation today by calling 248-344-9700.

 

Sources:

https://www.bankrate.com/personal-finance/divorce-cases-cryptocurrency-assets-new-battleground-bitcoin/

Oakland County Bar Association State Bar of Michigan Collaborative Practice Institute of Michigan WCCDBA Woman Lawyers Association of Michigan
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