One of the inevitable consequences of a divorce is the division of marital property. However, property division can become contentious and stressful if both parties are not clear about what amounts to marital property and what does not.
With more and more people investing in digital assets like cryptocurrencies, it is not uncommon for divorcing couples to have questions regarding how digital assets are handled during the divorce process. To answer these questions, it is important to start by understanding what digital assets are and how Illinois marital property laws work.
So what exactly are digital assets?
Basically, digital assets are intangible properties. These can include electronic versions of music, books as well as any non-physical asset that has financial value like cryptocurrency.
Determining the value of digital assets
During the divorce process, one of the most important considerations is usually the division of the marital property. Before this can take place in accordance with state law, both parties must disclose their assets and liabilities.
However, thanks to their volatility, valuing digital assets like cryptocurrency can be quite challenging. The value of the cryptocurrency at the time of asset declaration and formally filing the divorce papers can significantly vary from their value several months down the road when the court makes final pronunciations on asset division. As such, one of the approaches the couple can consider is coming up with a formula that takes into account the volatility when dividing such property.
So who gets the cryptos?
Under Illinois marital property law, any property obtained by either party while in marriage is treated as marital property and distributed equally during the divorce. Thus, any cryptocurrency purchased by either spouse before getting married shall be treated as separate property. However, if a spouse sold the cryptocurrency they bought before getting married and deposited the proceeds in the family account, then such proceeds shall be treated as marital property.
There is more to getting divorced than a change in relationship status. If you have invested in cryptocurrency before or during the marriage, it is important to understand how these assets will be handled during the divorce process.