Cryptocurrency – whether it’s Bitcoin or Dogecoin – has become an increasingly popular investment for people of all income levels. That means it’s also becoming an increasingly common asset to complicate divorce proceedings.
If you’re divorcing your spouse and crypto may be involved, here are some things to consider:
What crypto do you actually own?
Were you and your spouse both investing? Were you investing on your own? Was your spouse doing the investing? Since crypto’s allure is partially that it isn’t easy to trace, it can be very difficult to know what you actually hold.
Unless you’re absolutely certain you have a grasp on what crypto you and your spouse hold (or you really believe that your spouse is being honest when they reveal their holdings), you may need a forensic accountant to track down what’s been purchased – because you can’t divide assets you don’t know are there.
How do you value the crypto?
The cryptocurrency market is constantly evolving and very volatile. A tweet from a powerful figure can turn the market upside down overnight, as can big pushes from micro investors.
Trying to figure out the actual value of your holdings can require a lot of consultations with financial experts – including tax professionals. Long-term capital gains can be an unpleasant surprise when it comes to tax time.
When you and your spouse have complex financial holdings, don’t assume that your divorce is headed for litigation – and don’t assume it isn’t. You need experienced legal guidance with your property division to help you decide where there’s room for negotiation and where you need to hold fast to your demands.