Digital assets are becoming increasingly popular, so it is important to understand how they are treated when it comes to divorce. To learn more about whether cryptocurrency is considered marital property, continue reading and contact a knowledgeable Suffolk County property division lawyer today.
What is Cryptocurrency?
Cryptocurrency is a digital asset that functions similarly to money but exists only electronically. It gets its name from the cryptography used to secure transactions and control the creation of new units.
Crypto is not managed by a central authority like a government or bank, but transactions are verifiable and recorded on an immutable ledger known as a blockchain. This enables peer-to-peer transactions and bypasses the need for traditional third-party institutions. While cryptocurrency can be valuable, its worth can fluctuate significantly and often.
Is New York an Equitable Distribution State?
Yes, New York is an equitable distribution state, meaning that courts divide assets between spouses in a way that is fair but not necessarily equal. The goal is a fair division of property and to ensure that one spouse is not disproportionately disadvantaged by the termination of the marriage.
Courts will consider a variety of factors when determining an equitable split of property, including the following.
- The duration of the marriage
- Each spouse’s income and earning capacity
- Each spouse’s age
- Each spouse’s physical and mental health
- Financial or other contributions to the marriage made by either spouse
Is Cryptocurrency Considered Marital Property in NY?
Marital property refers to any assets that both spouses are entitled to, while separate property is owned by only one individual and is not subject to property division during a divorce. Marital property generally includes real estate, vehicles, cash, retirement accounts, jewelry, and more.
Cryptocurrency is treated as any other type of property when it comes to New York’s equitable distribution laws. If the crypto was obtained during the marriage, it is generally considered marital property, regardless of whose name is on the account or digital wallet.
The only way that crypto would be considered separate is if one spouse acquired it before the marriage, or it was gifted or left to one spouse explicitly. However, it’s important to note that separate property has the potential to become marital property over time.
If the cryptocurrency increased in value due to the efforts of the other spouse or marital funds or if the asset was commingled with marital property, some or all of the value could be considered jointly owned by both spouses.
Cryptocurrency can be difficult to identify and value, so it is important that you understand your legal rights and options when dealing with property division. Reach out to an experienced attorney for more information and legal advice today.
