3 challenges associated with dividing cryptocurrency in a divorce

3 challenges associated with dividing cryptocurrency in a divorce

On Behalf of | Aug 3, 2021 | Family Law, Property Division |

Estimates suggest that more than 20 million people own cryptocurrency, or digital currency, across Wyoming and the rest of the nation. This type of currency is becoming increasingly relevant in American divorce cases. Dividing up cryptocurrency is often more complicated and time-intensive than splitting up other investments and assets. So, you may encounter certain challenges during your attempts to do so.

When you or your spouse own digital currency, you may need to take extra steps to divide it appropriately amid divorce and make sure you each receive your fair share. Along the way, you may encounter the following challenges.

Placing a value on the cryptocurrency

The value of cryptocurrency often fluctuates from day to day and hour to hour, so it is not always easy to put a precise value on it. For this reason, you may need to divide cryptocurrency in your divorce using some type of preset formula.

Moving around cryptocurrency

Because digital currency is relatively new, there is not much of a precedent set with regard to how to transfer it from one party to the next. Transferring digital assets between parties may require the help of a financial professional with experience in this area.

Identifying tax implications

You may also find there to be tax implications that come with owning and transferring cryptocurrency. Understanding how receiving or transferring digital currency might affect your taxes may help you avoid financial trouble when it is time to file.

For some former couples, cryptocurrency represents a sizable portion of their assets. Neglecting to consider cryptocurrency in your divorce case may lead to financial losses.