Cryptocurrency and Divorce
For many high-net-worth and digitally savvy couples in the Charlotte region, bitcoin and other cryptocurrencies have been a welcome source of profit. While cryptocurrencies have certainly gone through their fair share of ups and downs over the years, many couples have earned significant amounts of money by jumping on this new trend. In some cases, the bulk of a couple’s fortune might come from smart cryptocurrency investments. So, what happens to these investments when a couple goes through a divorce in Mecklenburg County?
There are a lot of misconceptions about bitcoin and cryptocurrency, and you may be unsure about the finer details if your former spouse was managing your overall investment plan. If you are going through a divorce, you may be wondering about how these assets are divided in a divorce. Do courts even recognize these assets? How do you prove that your spouse even owns bitcoin? What is the best way to value and divide these assets so that you receive maximum value?
These are all questions that a qualified, experienced family law attorney can answer. A skilled attorney stays informed about all of the various assets that a couple might be divided in a divorce, including cryptocurrency. If you are concerned about a considerable bitcoin investment, it is probably a good idea to enlist the help of a lawyer who has experience with high net worth divorces and high conflict property division.What Does North Carolina Say About Cryptocurrency?
First, let us address the most important question: is cryptocurrency even recognized under North Carolina law? Although there were some questions about this years ago when cryptocurrency first started to make waves, these matters were settled conclusively in 2016 with 2016’s Money Transmitter Act.
According to this act, the definition of virtual currency was clearly laid out, and it is recognized under North Carolina law. All bitcoin traders in North Carolina must obtain licenses, which means that the practice is regulated. This means that when you get divorced, your cryptocurrency is recognized as an asset, and it will be subject to equitable distribution, just like a traditional stock portfolio or a savings account.How is Cryptocurrency Divided in a Divorce?
Because cryptocurrency is recognized under North Carolina law, it is divided in the same way as any other asset. First, you need to determine whether this asset is marital or separate. Marital assets include everything you accumulated during the marriage. If you purchased your bitcoin after your date of marriage, you will likely be required to account for these assets with your spouse in an equitable manner. If you purchased your cryptocurrency before the marriage took place, then this investment is usually classified as separate property, and it will likely not be subject to equitable distribution.
With all that said, cryptocurrency poses a unique issue when approaching the process of property division. These assets have risen astronomically in value over the past few years, and the court may take this factor into account. Even if you acquired your bitcoin before the marriage took place, you may be required to divide the assets based on the increase in value that took place during the marriage. This is especially true if you earned a significant fortune from a relatively small bitcoin investment years ago.Challenges with Cryptocurrency in a Divorce
The first notable challenge associated with cryptocurrency is its volatility. Over a few days’ time, the value of your assets could shift considerably. Selling and buying at the right time is critical. A classic method for dividing assets is to sell them and split the proceeds. But with bitcoin, this approach could be disastrous, especially if spouses are forced to sell at an inopportune moment. Some spouses may not want to sell their bitcoin at all. A more effective method would be to split the bitcoin wallet without actually selling them. This means that each spouse receives an equal amount of bitcoin. However, there are other ways to account for the marital cryptocurrency and the lawyers at Arnold & Smith, PLLC are available to help you evaluate your options.Enlist the Help of a Qualified Family Law Attorney
As you can see, dealing with cryptocurrency in a North Carolina divorce has become an increasingly necessary aspect to the process. The best way to address your concerns about cryptocurrency in your marital estate is to enlist the help of a qualified, experienced divorce attorney in the Charlotte area. The attorneys at Arnold & Smith, PLLC have experience in high-conflict divorces and high-net-worth separations, and we have dealt with virtually every issue imaginable. A divorce does not have to be complicated or needlessly stressful when you work with a professional. Reach out and book your consultation at our Mecklenburg, Iredell or Union county offices today.