Dealing with Digital Assets in a Divorce

Divorce is never easy, often bringing forth a whirlwind of emotional turmoil and financial stress for everyone involved. Separating a life built together is undoubtedly challenging, and it’s during these times that couples must confront a myriad of intricate issues. One such complexity increasingly encountered is the management of digital assets.

Couples going through a divorce in Franklin now struggle with not only the emotional upheaval but also the intricacies of handling their digital wealth. These digital assets encompass a diverse range of items, introducing an additional layer of complexity to an already challenging process.

The surging popularity of digital assets

In today’s world, the significance of digital assets has grown exponentially. With the widespread adoption of technologies, our lives have become increasingly intertwined with digital platforms, and these assets have become central to how we manage and store our wealth, creativity, and investments. Now, these assets actually play a pivotal role in our financial, creative, and personal lives, making them a critical consideration in divorce proceedings.

Types of digital assets

Digital assets come in an array of diverse forms. There are many different kinds out there, and they’re only expanding.

Some examples of common digital assets are:

Cryptocurrency

Cryptocurrency, the pioneering digital currency, comes in various forms, each with its unique features and applications. It’s a type of digital or virtual money that uses cryptography for secure transactions and operates independently of a central authority, such as a bank or government. Popular cryptocurrencies like Bitcoin, Ethereum, and Litecoin exist, and many others continue to emerge. These assets are typically stored in digital wallets, which can be online, on hardware devices, or in software applications.

The challenge in divorce proceedings often lies in tracing cryptocurrency ownership, as transactions are typically pseudonymous, making it difficult to determine who owns specific assets. During a divorce, it’s important for couples to get help from experts and make sure they share things fairly, as well as adhering to Franklin’s legal regulations and guidelines.

NFTs

Non-Fungible Tokens, or NFTs, are unique digital certificates that prove ownership of a specific item or piece of content, often digital art, music, or collectibles. Unlike cryptocurrencies, NFTs are not interchangeable with one another, each one representing something entirely distinct. This distinctiveness is what makes NFTs valuable and sought after, as they can be hidden in the vast digital world.

NFTs can be hidden because they exist primarily on blockchain platforms. Think of the blockchain as a digital record-keeper that keeps track of who owns NFTs and any actions involving them. While the ownership of NFTs is recorded on the blockchain, the actual digital item or artwork they represent may be stored on various online platforms or marketplaces.

To find hidden NFT collections during divorce proceedings, couples often need to engage with specialists or use specialized software designed to track and identify these digital assets. In Franklin and elsewhere, divorcing couples should recognize that NFTs have become an integral part of digital wealth and require careful consideration in asset division.

Other digital accounts

While not all digital assets hold substantial monetary value, they can still possess immense sentimental importance. These assets often represent memories, personal history, and creative endeavors that are irreplaceable.

Some of these include:

• Music collections
• Streaming accounts
• Personal photo and video libraries
• Social media profiles and content
• Online gaming accounts and virtual items

Tennessee’s approach to property division

In Tennessee, property division during divorce is guided by the principle of equitable distribution. This means that the goal is to divide assets fairly, rather than necessarily splitting everything 50/50. The court takes into account various factors such as each spouse’s contribution to the marriage, their financial situation, and their individual needs.

The equitable distribution principle not only seeks fairness but also recognizes that each marriage is unique, and so should be the property division. The court considers factors like the duration of the marriage, the financial and non-financial contributions of each spouse, and their respective needs, especially when children are involved.

By ensuring that digital assets are appropriately valued, divorcing couples can help the court make more informed decisions that truly reflect the complexities of their individual situations. This process ensures that neither party is unfairly disadvantaged and that both spouses have a fair opportunity to move forward with their financial well-being intact.

Valuing your digital assets

The proper valuation of digital assets plays a pivotal role in ensuring an equitable and just distribution of property between the separating spouses. This process not only protects your financial interests but also upholds the principles of fairness and transparency during what can be an emotionally charged and complex period. Accurately assessing the worth of your digital assets helps achieve a resolution that reflects the contributions and investments made by both parties during the marriage.

Here’s how some values are determined:

• Cryptocurrency: Cryptocurrency values are unstable, making it tricky to pin down their worth. Determining their fair market value in a divorce often involves looking at the current market price, although this can change rapidly. A common approach is to use the average value over a specific period.
• NFTs: Valuing NFTs is a bit of a puzzle because they’re not as straightforward as traditional assets. Consider factors like rarity, demand, and the creator’s reputation when assessing their value. Keep in mind that NFT markets can be quite unpredictable, so the value may fluctuate.

The importance of full disclosure

When going through a divorce, open and honest communication is important. This principle also extends to the realm of digital assets. Both spouses should be forthcoming about all of their assets, including digital, ensuring that nothing is hidden or undisclosed. This transparency is crucial in divorce proceedings, as it helps maintain fairness and equity in asset division. Without full disclosure, the process can become needlessly complicated and drawn out.

If you find yourself navigating the challenging path of divorce, it’s important to safeguard your assets, especially the increasingly significant digital ones. As this process can be intricate and demanding, seeking professional guidance is essential. Contact the Law Offices of Adrian H. Altshuler & Associates to ensure your digital assets are properly valued and distributed. To schedule a consultation, reach out by phone or through our contact form. We proudly serve families in Franklin, Brentwood, Columbia, and throughout Middle Tennessee, providing the support you need during this time.