Dividing assets in a divorce is often one of the most contentious parts of the divorce process, though child support, custody, and alimony are also debated topics. One of the reasons the division of marital property can be so challenging is that identifying and effectively valuing marital property is often difficult. Particularly with high-net-worth divorces, calculating the full value of the divisible property involves accurately categorizing the entirety of a couple’s estate as divisible or non-divisible, valuing each item effectively, and determining how the pool of marital property is split. In this process, various types of assets may have unique nuances and challenges.
One of these more complex categories in divorce settlements is digital assets. In recent years, digital assets such as cryptocurrency and non-fungible tokens (NFTs) have become increasingly popular, with some even serving as forms of investment. As with any large investment or retirement account, most digital assets that are marital property must be divided in a divorce settlement. As such, without expert input, accurately valuing these assets in South Carolina, North Carolina, and Tennessee can be difficult.
A skilled Tennessee divorce attorney from King Law Offices may be able to assist with digital asset valuation in divorce settlements. Call now at (888) 748-5464 to learn more from an experienced lawyer in a free consultation.
What Are Digital Assets?
While most people understand assets as physical things they own that have value, this is not a complete definition of an asset. Assets can also be intangible things that still hold value, which can include digital assets. Some of the more common digital assets that are evaluated and divided in a divorce settlement include cryptocurrency, NFTs, and online businesses such as profitable social media accounts, online stores, or monetized blogs. The list of viable digital assets is constantly growing and evolving as innovations in technology increase. Digital asset valuation can be challenging because of how often these assets fluctuate in value.
Valuation of Digital Assets
As with physical assets, the value of digital assets is constantly changing. Online businesses are impacted by the choices of the owner and the fluctuations of the market. Monetized social media accounts can fluctuate drastically based on popularity and management, and may even function similarly to a piece of intellectual property like a brand. This is the same with cryptocurrencies and other online investments. Therefore, during divorce settlements, it can be challenging to understand the digital asset valuation. A trained expert may be able to help similarly to an appraiser, giving an expert opinion on the worth of the digital property.
A skilled South Carolina, North Carolina, or Tennessee divorce attorney from King Law Offices may be able to help with digital asset valuation and divorce settlements.
How Are Digital Assets Divided in Divorce?
Digital assets, despite the complexity of digital asset valuation and categorization, are divided according to standard state law. This means that digital assets can be divided in divorce settlements if they are classified as marital property. This process of distribution will generally require parties to determine which of their digital assets are separate property and what is marital property. Marital property is jointly owned by both spouses and is thus subject to division in divorce settlements. Separate property was purchased or owned before the marriage, or was specifically gifted or bequeathed to one individual, not the couple together. However, according to the Tennessee Bar Association, assets can become “comingled” in certain circumstances, which may complicate the division of assets.
Marital Property Division in Tennessee
Tennessee subscribes to a philosophy of equitable distribution, which means that marital property is not distributed evenly, but according to the needs, contributions, and potential of marital misconduct with both spouses. In a divorce settlement, the distribution of assets is determined by agreement of the spouses. Sometimes this is an easy and painless decision, but other times it may require the intervention of a mediator or even litigation in family court. If the courts get involved, they have their own methods and calculations for determining the division of marital property, including digital assets.
Strategies for Dividing Digital Assets
When it comes to digital asset valuation and distribution, there are many things to consider and take into account. Privacy and transparency can be an issue in the disclosure of these assets, particularly when one party has the login information for these accounts. Ensuring clear communication and transparency can help reveal what digital assets must be divided, and can help foster constructive conversation about how to divide them.
While some items may be simple, such as purchased digital media and other digital media with a fixed price. However, investments like cryptocurrency and others may pose an issue in digital asset valuation. Bringing in an expert with experience in digital assets can be a significant benefit, allowing clarity in the process and confidence in the valuation of these digital assets.
Once digital asset valuation is complete, the spouses must then determine how to divide these assets. How this is accomplished often depends on the types of digital assets involved. Some assets can be liquidated and divided according to their monetary value in divorce settlements. Others that cannot be divided in this way, such as businesses and profitable social media accounts, may be offset with other property or assigned to one individual. Additionally, some digital assets that hold sentimental rather than monetary value, such as photos and cloud accounts, could be duplicated so that both parties can have a copy.
Speak with a Tennessee Divorce Attorney Today
Digital asset valuation can be a challenge, and may be unfamiliar to those finalizing divorce settlements. A technology expert may be able to help clarify what counts as a digital asset, assist in valuing the property accurately, and communicate how to transfer or otherwise manage these assets in divorce. Expert opinion may help divorcing spouses make informed decisions when creating divorce settlements in North Carolina or South Carolina, as well as in Tennessee.
As digital asset valuation can be so critical in these processes, having clear guidance and expert advice can help divorcees have peace of mind about their divorce settlements. For those pursuing a divorce with digital assets, consider speaking with a skilled Washington County, Tennessee divorce lawyer from King Law Offices who may be able to help with digital asset valuation. Consider scheduling a free consultation by calling the offices at (888) 748-5464.
