Dividing Digital Assets in a Divorce (e.g., NFTs, Cryptocurrency)

Dividing assets in a divorce has always been complex, but in today’s digital age, couples are increasingly dealing with cryptocurrency, NFTs, and other digital assets. These assets can be valuable, volatile, and difficult to trace, making them a crucial yet challenging part of divorce settlements.

At Magnuson Lowell, P.S., we help Washington clients navigate the division of digital property, ensuring they receive their fair share. If you or your spouse own Bitcoin, Ethereum, NFTs, or other digital investments, here are some things to know.

1.  Understanding Digital Assets in Divorce
Digital assets can include a variety of holdings, such as:

• Cryptocurrency (Bitcoin, Ethereum, Solana, etc.)
  
  
• Non-Fungible Tokens (NFTs) (digital artwork, collectibles, music rights)
  
  
• Online businesses and domain names
  
  
• Virtual real estate or gaming assets (Metaverse, video game skins, etc.)
  
  
• Digital royalties (YouTube, TikTok, e-books, music streaming)

Under Washington’s community property laws, assets acquired during the marriage are often subject to an equitable division. However, proving the existence and value of digital assets can be challenging.

2.  Identifying and Valuing Digital Assets
One of the biggest hurdles in dividing digital property is tracking ownership and assessing value. Unlike traditional bank accounts, crypto and NFTs are often stored in digital wallets that may not be easily visible in financial records.

To uncover hidden digital assets, you may need:

• Financial statements showing transactions (Coinbase, Binance, Kraken, etc.)
  
  
• Tax filings listing cryptocurrency gains/losses
  
  
• Blockchain transaction history
  
  
• NFT purchase records (OpenSea, Rarible, etc.)

Since digital assets fluctuate in value, it’s important to obtain a current appraisal before finalizing any division.

3.  Dividing Cryptocurrency and NFTs in Divorce
There are multiple ways to fairly divide digital assets in divorce:

• Direct Transfer: If both parties agree, cryptocurrency can be split by transferring half of the holdings to a separate digital wallet.
  
  
• Offset with Other Assets: One spouse may keep the digital assets while the other receives an equivalent amount in traditional assets (e.g., real estate, retirement accounts).
  
  
• Liquidation and Equal Distribution: The assets are sold, and the proceeds are divided between both spouses.

The best approach depends on tax implications, volatility, and the willingness of both parties to retain crypto investments.

4.  Protecting Yourself from Hidden Digital Assets
Because crypto can be easily transferred or hidden in anonymous wallets, spouses may attempt to conceal digital assets during divorce. Signs your spouse may be hiding cryptocurrency include:

• Unexplained withdrawals or large transfers from joint bank accounts
  
  
• Sudden decreases in reported income or financial resources
  
  
• Mentions of crypto investments that are absent from financial disclosures

A divorce attorney can work with forensic accountants to attempt to trace blockchain transactions and uncover missing assets.

5.  Tax Considerations for Digital Assets in Divorce
Cryptocurrency may be subject to capital gains taxes, meaning the timing and method of division can significantly impact tax liability. Always work with your accountant to determine potential tax liabilities before finalizing a divorce to avoid unexpected taxable situations.

6.  Work with a Divorce Attorney Experienced in Digital Assets
Digital assets bring unique challenges to divorce proceedings, but you don’t have to navigate them alone. At Magnuson Lowell, P.S., we help clients understand their rights, uncover hidden digital property, and work towards fair asset divisions. We offer free telephone case evaluations, so if you’re dealing with cryptocurrency, NFTs, or other complex digital assets in your divorce, contact us today 425-800-0576

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In today's world, divorce is more than just dividing assets and establishing custody agreements, it also involves untangling your online presence. Many divorcing couples in Washington State share financial accounts, social media profiles, streaming services, and even cloud storage. Failing to protect your digital footprint during a divorce can lead to privacy concerns, financial complications, and even legal issues.

Here are a few issues to consider:

1.  Update Passwords and Enable Two-Factor Authentication
If you’ve shared passwords with your spouse for banking, email, or social media accounts, it’s time to update them. Consider using a password manager to generate and store strong, unique passwords.

Additionally, enable two-factor authentication (2FA) on your most sensitive accounts, such as:

• Email accounts (Gmail, Outlook, Yahoo)
  
  
• Online banking and investment accounts
  
  
• Cloud storage (Google Drive, Dropbox, iCloud)
  
  
• Social media accounts (Facebook, Instagram, LinkedIn, Twitter/X)
  
  
• Shopping and subscription services (Amazon, Netflix, Apple ID)

With 2FA enabled, even if your ex-spouse knows an old password, they won’t be able to access your account without a secondary verification code.

2.  Separate Joint Accounts
Many couples share digital financial accounts, such as Venmo, PayPal, or credit card logins. Work with your attorney to determine which accounts should be closed or transferred.

• Banking & Credit Accounts: If you have joint accounts, avoid making large withdrawals without legal guidance.
  
  
• Streaming & Subscription Services: Change logins or set up new accounts to ensure your ex-spouse does not have access.
  
  
• Cloud Storage & Shared Documents: If your ex has access to cloud-based storage, review what documents are shared and remove personal files as needed.

3.  Audit Your Social Media Presence
Social media activity can be used as evidence in a divorce case. Avoid posting about finances, vacations, or new relationships during the proceedings. Review your social media settings to:

• Restrict past and future posts to "Friends Only"
  
  
• Remove your ex-spouse from shared accounts or business pages
  
  
• Disable location tracking and check-in features
  
  
• Be cautious about mutual friends who may share screenshots

If you’re unsure about the impact of social media on your divorce case, consult a divorce attorney before posting online.

4.  Protect Your Personal Data on Shared Devices
If you and your spouse have shared a computer, tablet, or mobile device, ensure your private information remains secure.

• Sign out of shared browsers and clear saved passwords.
  
  
• Remove personal accounts from shared computers and devices.
  
  
• Back up important documents and messages before making changes.
  
  
• Check location-sharing settings (Google, Apple, or Snapchat) to prevent tracking.

If you're concerned about digital surveillance, consider resetting your phone or consulting a cybersecurity expert.

5.  Secure Important Digital Documents
Divorce involves a large amount of paperwork, including tax records, financial statements, and legal documents. Ensure these records are stored securely:

• Scan and save copies of important documents to a secure cloud storage service or external hard drive.
  
  
• Keep digital records of court filings, emails, and messages with your attorney.
  
  
• Change access settings for any shared business or personal accounts.

If you need assistance gathering or protecting sensitive documents, an attorney can help you navigate this process.

6.  Consult with a Washington Divorce Attorney
Your digital life is just as important as your physical assets during a divorce. We always recommend that you speak to an attorney before you make any changes to your account or profile information. At Magnuson Lowell, P.S., we offer free telephone case evaluations to discuss your concerns and guide you through the process 425-800-0576 - call today!

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Going through a divorce is challenging enough, but when you and your spouse must continue living under the same roof, the emotional and logistical complexities can be overwhelming. This situation is not uncommon in Washington State, where financial constraints, the housing market, or shared responsibilities for children might require divorcing couples to cohabitate during the process. At Magnuson Lowell, P.S., we understand how delicate these situations can be. Here’s are some tips based on real life situations we’ve encountered with clients over the years.

Establish Clear Boundaries
One of the first steps is setting boundaries to create a manageable living arrangement. Define personal spaces within the home to ensure each person has a place to retreat. Establish rules for shared areas, such as the kitchen, living room, and bathroom schedules, to reduce conflict.

Maintain Civil Communication
While it’s natural for emotions to run high, keeping communication civil is crucial. Consider using written communication or apps like OurFamilyWizard to manage schedules or parenting discussions. Avoid discussing sensitive topics that could escalate tensions.  Android: https://play.google.com/store/apps/details?id=com.ourfamilywizard&hl=en_US Apple: https://apps.apple.com/us/app/ourfamilywizard-co-parent-app/id497405393 

Create a Temporary Parenting Plan
If you have children, their well-being should remain the top priority. Often, working with your attorney to generate an immediate, temporary parenting plan allows for minimizing exposure to conflict. A clearly defined plan can reduce misunderstandings and help provide stability for your children.

Avoid Financial Entanglements
Continue to meet financial obligations while maintaining transparency about expenses. However, it’s essential to avoid joint purchases or significant financial decisions that could complicate the divorce process. Consult your attorney to ensure you’re protecting your financial interests.

Respect the Process
Living together during a divorce requires respecting legal boundaries. Avoid actions that could be perceived as harassment, stalking, or invasion of privacy, as these could affect court proceedings. If tensions escalate, consider discussing a temporary restraining order with your attorney.

Consider Mediation
Mediation can be a useful tool for resolving disputes while you’re cohabitating. It allows both parties to work through contentious issues, such as property division or parenting schedules, in a neutral environment.

Plan for the Future
Use this time to plan your post-divorce living arrangements. Start researching housing options, organizing your finances, and considering how to separate joint accounts. Being proactive will ease the transition once the divorce is finalized.

Consult with an Attorney
Living with your spouse during a divorce can present unique challenges that require careful navigation. At Magnuson Lowell, P.S., we can provide you with the legal guidance you need to protect your rights while maintaining peace in the home. Our experienced divorce attorneys are here to help, offering free telephone case evaluations to address your concerns, call today: 425-800-0572

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