Divorce and Transitions: Mardi Winder-Adams
Today, most couples have a significant number of digital assets.
“Digital assets can be stored on a computer, personal smartphone, tablet, or cloud storage platform.”
These digital assets can range from online photo albums and backup copies of files to crypto wallets and virtual bank accounts.
Digital assets create a challenge in divorce, as they are easy to overlook. Or, even more problematic, easy to hide. Digital assets can be stored on a computer, personal smartphone, tablet, or cloud storage platform. For many individuals going through a divorce, knowing what digital assets should be considered in the property division is the first challenge.
In general, anything of value should be divided as an asset in the divorce proceedings. As long as it falls under the category of marital property. This is also referred to as community property in the nine states that recognize this designation. In community property states, any assets acquired or accumulated during the marriage are considered to be owned equally by both people. There are some exceptions, which is why an attorney is vital in understanding the specific laws in your area.
Photos And Videos:
Personal photos and videos are often meaningful to both parties in the divorce. There is no monetary value to these images, but they are treasured memories of kids, pets, vacations, and the good times in the relationship.
Making a duplicate digital copy is wise if you believe your partner may intentionally delete or destroy these records. Use a zip drive or a private, separate device or service to host your digital copy of the images and videos. Do not destroy or delete any of these images until you speak with an attorney.
In many cases, the mediated settlement or the court will stipulate how and when these files should be duplicated. And how they will be shared between the spouses. Offering to make a copy for the estranged partner can be a simple way. This is to help to re-establish goodwill and collaboration.
If there are images you no longer want floating about (you know the ones I am talking about!), talk to your divorce attorney immediately. Under revenge porn laws, which apply to married couples too, it would be illegal for your soon-to-be ex to post photos or videos. But that doesn’t always stop someone bent on revenge. Again, your attorney can suggest ways to handle the situation proactively. If photos do end up public, do not retaliate with the same type of post. It can result in legal action against you.
“If you do delete posts and accounts, it may lead to legal issues about destroying evidence.”
Shared Streaming And Social Media Accounts:
Typically, families share these accounts. These include movies, streaming services, the ability to make purchases, make posts, and the list of friends, and followers. Links to potential business pages are shared if you have a family business.
Do not delete, remove, or lock out the spouse from these social media and streaming accounts without consulting your divorce attorney. In addition, do not delete any posts or accounts you have privately or jointly. These can be discoverable and presented to the court in a divorce hearing. If you do delete posts and accounts, it may lead to legal issues about destroying evidence. You can make settings private and restrict access. But it is even more critical to stop posting and sharing anything about the spouse or the divorce until a final settlement is reached and these issues are settled in mediation or by a judge.
Everything from applications for credit cards to electronic bank statements and tax returns may be considered information relevant in a divorce. In most cases, these records are used in the divorce process to determine the financial state and accounts of the couple.
Do not remove, delete, or destroy any electronic records of any type. If they are currently on the computer, consider them as part of the divorce process, just as any physical item. Consult with your divorce attorney before doing anything with this information.
Cryptocurrency And NFTs:
Cryptocurrency or NFTs are an investment and considered an asset in a divorce. Each individual is required to declare any crypto holdings in their financial disclosure. In addition, as an asset, they are taxable and may include the payment of capital gains.
“The challenge with cryptocurrencies and NFTs is the widely fluctuating value.”
However, cryptocurrency also provides anonymity and is not regulated through a centralized banking system. This means that it can be easier to hide, and due to the nature of the investment, it cannot be seized or confiscated the same way as bank accounts or other physical assets can be in the process.
The challenge with cryptocurrencies and NFTs is the widely fluctuating value. The value listed in a financial disclosure may be radically different in the next hour.
Intangible Digital Assets:
Moreover, options for managing cryptocurrency holdings vary from jurisdiction to jurisdiction. Typically, the couple can transfer a portion of the cryptocurrency to the spouse, or it can be cashed out and the profits divided (with possible tax implications now and in the future), or the cryptocurrency and NFT could be set at an agreed upon value and offset with other assets during the mediation or through the courts.
In this situation, working with your accountant, financial advisor, and attorney will be the ideal way to determine how to manage these intangible assets.
*This article does not provide legal advice, financial advice, or information on any division of property in any jurisdiction. It is critical to have informed legal representation when making decisions during separation and divorce. *
About the Author:
Mardi Winder-Adams is an Executive and Leadership Coach, Certified Divorce Transition Coach, and a Credentialed Distinguished Mediator in Texas. She has experienced her own divorce, moved to a new country and started her own business, and worked through the challenges of being a caregiver and managing the loss of a spouse.
Handling life transitions and pivots is her specialty! In her professional role as a divorce coach, Mardi has helped hundreds of women before, during, and after divorce to reduce the emotional and financial costs of the process. She is the founder of Positive Communication Systems, LLC.