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Protecting Your Digital Wealth Before, During, and After Divorce

In today’s interconnected, digital-first world, many of the most valuable and vulnerable aspects of your wealth may exist online. From cryptocurrencies and NFTs to online businesses, domain names, cloud storage, and intellectual property, digital assets are ever more common and ever more complicated when it comes to divorce. 

At Masters Law Group, we guide clients through the complexities of dividing traditional and digital assets alike. Below, we explain what “digital wealth” means, why it matters in divorce, and the practical steps you should take now to safeguard your interests.

What Is Digital Wealth 

Digital Assets and Divorce

When people think of marital assets, they often imagine houses, retirement accounts, investment portfolios, and physical property. But digital wealth encompasses a broad, evolving spectrum of assets, many of which have monetary, strategic, or sentimental value. Some examples include:

  • Cryptocurrencies and tokens (e.g., Bitcoin, Ethereum, stablecoins)
  • Non-fungible tokens (NFTs): digital art, collectibles, virtual real estate
  • Online businesses or side hustles: e-commerce shops, subscription sites, monetized blogs, SaaS platforms
  • Domain names, websites, digital app assets
  • Digital intellectual property: copyrights, trademarks, royalties, software code
  • Cloud storage/archives: photos, videos, personal files
  • Email, social media, and communications accounts
  • Gaming accounts, in-game currencies, or virtual goods
  • Subscription services, loyalty points, digital wallets, payment apps (PayPal, Venmo, Square, etc.)
  • Access rights and credentials: login credentials, private keys, password-protected accounts

These digital assets can hold significant value (sometimes hidden value), or they may represent streams of income or strategic leverage. Because they can be more opaque and portable than traditional assets, they can be targeted for concealment or misallocation during a divorce.

Courts increasingly recognize digital assets as part of the marital estate. For instance, state divorce laws generally require full disclosure of all assets, including digital property. 

Failing to properly identify, value, or protect digital assets can lead to:

  • Loss of control over important accounts and files
  • Undervaluation or improper division
  • Accusations of concealment or spoliation
  • Difficulty in reconstructing or recovering assets later
  • Tax complications

Therefore, anyone navigating divorce must treat their digital wealth with the same seriousness, and often more care, than physical or financial assets.

Key Challenges With Digital Assets in Divorce

Digital Assets and Divorce

Before we go into drafting your action plan, it helps to understand the unique challenges digital assets present:

1. Opacity and Concealment Risk

Because digital assets can be held under pseudonyms, encrypted wallets, or obscure accounts, they are easier to hide. A spouse could transfer cryptocurrency to a new wallet or move assets to offshore or anonymous accounts, making detection difficult. 

2. Volatility and Valuation Complexity

Cryptocurrencies, especially, are extremely volatile. Their value may swing dramatically even within days. NFTs are subject to speculative pricing and illiquid markets. For online businesses, you often must value future income, user base metrics, growth potential, and intangible goodwill in addition to hard assets. 

3. Intermingling/Commingling

Even if you brought a digital asset (say, a Bitcoin wallet) into the marriage, if you used marital funds to enhance it, or mixed it with assets acquired during marriage, courts may consider the increased value or proceeds part of marital property. 

4. Access and Control Issues

Ownership of a digital asset often depends on who controls the keys, credentials, or servers. Transferring, locking out, or restricting access to accounts can lead to disputes or court orders. 

5. Evidence Preservation

Deleting data, altering logs, or revoking access mid-divorce can be construed as spoliation of evidence, which can trigger penalties or imputed value.

6. Evolving Legal Landscape

Digital assets are relatively new in divorce practice, so courts are still developing standards. Judges and attorneys may vary in how they treat specific asset categories. 

A Step-by-Step Plan to Protect Your Digital Wealth

Digital Assets and Divorce

Below is a strategic roadmap to help protect your digital assets before or early in the divorce process. Always consult with a family law attorney (such as a team at Masters Law Group) before making any moves that might complicate your case.

1. Inventory Everything

Begin by building a detailed, documented inventory of all your digital assets. Be comprehensive. Include:

  • Asset type (crypto, NFT, domain, business, cloud files, etc.)
  • Platform or service (exchange, marketplace, hosting, blockchain)
  • Account name, username, email, server, host, wallet addresses, public keys
  • Access methods (passwords, 2FA, hardware wallets, recovery seeds)
  • Purchase history and transaction logs
  • Dates acquired, cost basis, current holdings
  • Any associated liabilities (loans, margin, obligations)

Don’t forget less obvious digital holdings like app store accounts, digital royalties, loyalty or rewards points, or gaming items. 

Documenting as much as possible early locks in the “starting point” and protects you from later accusations of hiding or changing things.

2. Classify and Understand Ownership

With your attorney, you’ll need to classify which digital assets are separate property (not subject to division) versus marital property (subject to division under applicable state law).

Separate property typically includes assets you owned before marriage, gifts or inheritances to you alone, or assets explicitly excluded by agreement. Even separate digital assets can lose their separate status if commingled or enhanced by marital funds or efforts.

It is important to understand your state’s rules on equitable division or community property and how they apply to digital assets.

3. Don’t Panic, Avoid Erratic Account Moves

It may be tempting to immediately move things or change access to “secure” your assets. But doing so in a divorce context may backfire.

  • Avoid deleting, wiping, or altering data once divorce may be imminent; it can appear as spoliation.
  • Consult your attorney before making account changes, especially for shared or jointly held accounts. A court may require that you not alter account access mid-litigation.
  • If account access is shared, don’t unilaterally lock out your spouse unless ordered. Courts may view that as “tampering.”

4. Secure Your Access

Once you’ve documented and your attorney gives the go-ahead:

  • Change passwords on accounts that are solely yours (not shared)
  • Enable or strengthen 2FA (two-factor authentication) wherever possible
  • Move private keys or recovery seeds to secure storage (e.g., hardware wallets or secure offline backups)
  • Consider creating new email accounts for legal/financial correspondence (so that old shared accounts cannot affect you)
  • Back up important digital files or archives on external drives you control (but do so without triggering suspicion)

Always coordinate with counsel; avoid drastic changes to shared accounts that might be seen as hostile or obstructive.

5. Engage Forensic/Technical Experts Early

The complexity of digital assets often demands expert help:

  • Forensic accountants or cryptocurrency tracing specialists can help trace transfers, inspect blockchain activity, recover deleted files, or identify hidden wallets.
  • Valuation experts can provide reliable, defensible appraisals of volatile or intangible digital assets such as NFTs, online businesses, or intellectual property rights.
  • IT security/network forensics can review whether there’s tampering, unauthorized access, or hidden accounts.

Engaging experts early provides both you and your attorney a baseline, reduces surprises, and sends a message that you are taking matters seriously.

6. Consider Pre- or Post-Nuptial Agreements

If you’re approaching divorce but are still married, it may be worth exploring protective tools:

  • Prenuptial agreement (if you’re not yet divorced) or postnuptial agreement (entered after marriage) can explicitly define ownership and treatment of digital assets in a future divorce.
  • Separate legal entities (e.g., LLCs, corporations, trusts) may hold digital assets, create separation from personal property, and strengthen claims that the assets are business or intellectual property rather than purely marital. 
  • Confidentiality/non-disclosure agreements might help protect the value or sensitive information about business or IP assets during the proceedings.

These instruments can’t cure all problems, but they can make supervision and enforcement clearer.

7. Negotiate & Strategize Early

Digital-asset divisions are rarely straightforward splits. You and your attorney should strategize which assets to keep, which to liquidate, and how best to compensate the other spouse fairly. Some common frameworks include:

  • In-kind distribution: dividing a digital asset itself (e.g., splitting a fungible token). This works well for cryptocurrencies that can be subdivided. 
  • Buyout / Offset: one spouse keeps the digital asset, and compensates the other with cash or other assets of equal value.
  • Liquidation/sale + divide proceeds: sell the asset and split the cash. This avoids ongoing management or volatility concerns, but timing and tax consequences matter.
  • Continued ownership + compensation mechanism: perhaps one spouse keeps the digital business and pays the other over time or with royalties or profit shares.

Whatever approach you choose, your agreement should clearly state the valuation date, the method of valuation, who bears tax risk, and mechanisms for transfer or enforcement.

8. Preserve Digital Evidence

To help defend your rights and protect from claims of hiding or tampering, preserve evidence:

  • Take screenshots of current account balances, holdings, wallet addresses, and transaction logs
  • Export CSVs or PDFs of statements, trade histories, and tax filings
  • Keep copies of backups (offline)
  • Document any suspicious activity or impulse changes
  • Provide logs or metadata (dates, timestamps, IP addresses) where available
  • Avoid deleting or altering anything once litigation is likely

Courts often respond harshly to parties who alter or destroy digital evidence.

9. Ensure Transparency and Full Disclosure

While you’re protecting your rights, you must also comply with your legal duty to disclose assets fully and in good faith. Non-disclosure or concealment can lead to sanctions, a greater share awarded to the other spouse, or reversal of transfers. 

Your attorney can help you craft discovery responses, responses to interrogatories, and documentation that include your digital asset inventory.

10. Draft a Clear Agreement or Court Order for Transfer

Digital assets often require complex transfer instructions. A settlement or court order should clearly:

  • Name the digital property being transferred
  • Provide wallet addresses, keys, and credentials
  • Set a timeline or a supervised mechanism for transfer
  • State who bears fees, risks (e.g., volatility, network fees, lost keys)
  • Address tax consequences
  • If necessary, require escrow or third-party oversight of the transfer

Well-drafted orders reduce disagreements post-decree.

11. Post-Divorce: Update Your Digital Estate & Access Plans

Once the divorce is final:

  • Update beneficiaries, permissions, or access to digital accounts
  • Change login credentials, passwords, and 2FA to exclude your former spouse
  • Review and update your estate plan or digital-asset instructions
  • Ensure proper handling of ongoing income streams (royalties, ad revenue)

Case Study: Crypto & Online Business

Digital Assets and Divorce

To illustrate, consider this composite (fictional but realistic) scenario:

Jane and Alex have been married for 8 years. During the marriage, Jane bought various cryptos and NFTs (some pre-marriage, some during). She also built a subscription-based content website that generates steady ad revenue. Alex suspects that Jane has hidden additional crypto holdings in a cold wallet.

How Jane should proceed:

  1. Inventory all known wallets, exchanges, transaction logs, website accounts, domain registrations, revenue statements, and archives.
  2. Preserve evidence by exporting all statements, screenshots, backups, and metadata.
  3. Avoid hiding or moving more funds once Alex has indicated the intention to divorce; doing so may be reversed or penalized by the court.
  4. Engage experts: a blockchain forensic specialist to address Alex’s suspicion of hidden crypto, and a business valuation expert to value the subscription site.
  5. Negotiate: Jane may propose keeping the site and paying Alex a buyout, or splitting crypto holdings fungibly, or liquidating a portion and dividing proceeds.
  6. Document transfer in settlement: including wallet addresses, private keys (in escrow or supervised), timeline, tax allocation, and liability assumptions.
  7. Post-divorce cleanup: Jane updates credentials, secures access. Alex receives compensation per the agreement.

Through proactive steps, Jane can reduce disputes, maintain control, and protect her interests, while still complying with legal disclosure obligations.

What Happens If Your Spouse Tries to Conceal Digital Assets?

Sometimes, even with your best efforts, the other spouse may attempt to hide or move digital assets covertly. Here’s how the legal system can help you:

  • Discovery tools: Your attorney can issue subpoenas, requests for production, interrogatories, or forensic inspections of devices, email, cloud servers, and exchange accounts.
  • Blockchain tracing: Forensic accounting experts can trace transfers on public blockchains and detect suspicious movement patterns.
  • Court orders/sanctions: Courts can order asset freezes, preservation orders, or require credential disclosures. They can also impose monetary sanctions, adverse inference (imputing hidden value to the concealing spouse), or even award the entire asset to the other party.
  • Imputed value: If a spouse fails to preserve or disclose, the court may impute a higher value or assign the disputed value to the non-offending party.
  • Forensic audits: In complex cases, the court can appoint neutral forensic experts to audit digital records.

These tools help level the playing field, even when one party has a technical advantage.

Your Digital Asset & Divorce Timeline 

Remember: Digital assets are complex and require careful legal and technical handling. Consult family law attorneys experienced in digital property to protect your interests throughout the divorce process.

Common Questions & Pitfalls

Q: Can I just change all my passwords and lock my spouse out?
A: Not always. Changing passwords on accounts you alone own might be okay, but unilateral changes to shared or marital accounts can be viewed by courts as tampering or concealment. Always coordinate with your attorney before drastic account changes.

Q: Are digital assets always marital property?
A: No. Assets acquired before marriage, inherited, or gifted (if not commingled) may remain separate. But courts look carefully at commingling, efforts, and how the value changed during the marriage. 

Q: How is crypto valued?
A: Typically, courts pick a “valuation date” (e.g., date of separation or date of filing) and use a market reference (exchange price or average). Crypto volatility is taken into account; parties often negotiate valuation windows or averaging periods. 

Q: What about NFTs?
A: NFTs (non-fungible tokens) are treated like unique property. Because they lack fungibility, division often occurs via transfer to one spouse with offsetting compensation to the other. Valuation is often market-driven and can be speculative. 

Q: My spouse ran a digital business we built together. How should that be divided?
A: You’ll need a business valuation expert. Options include one spouse keeping the business in exchange for buyout payments, splitting the value, or even continued joint ownership (rare). Your settlement should specify who keeps the platform, content, domain registrations, user databases, and intellectual property rights. 

Q: Can the court force password or private key disclosure?
A: Yes, courts can order parties to produce credentials or key access, sometimes under protective conditions. They may also appoint custodians or escrow agents to enforce fair transfer. 

Final Thoughts 

Digital Assets and Divorce

In the digital age, your wealth extends beyond bricks and mortar; it spans blockchains, servers, domains, and data. If you’re approaching divorce, protecting your digital wealth isn’t optional; it’s essential. Mistakes or omissions can cost you significant value, privacy, or leverage.

At Masters Law Group, we help our clients:

  • Build comprehensive digital asset inventories
  • Coordinate secure and lawful access changes
  • Engage forensic and valuation experts
  • Negotiate transfer mechanisms and settlement terms
  • Enforce proper disclosure and mitigate concealment risks
  • Plan post-divorce digital cleanup and estate security

Every divorce is unique, and your digital asset plan must be customized. Let us help you protect your rights, preserve your legacy, and move forward confidently. 

Get in touch with Masters Law Group today for a consultation.

Disclaimer: This blog is for informational purposes only and does not constitute legal advice. If you need legal assistance, please contact the qualified attorneys at Masters Law Group. Our firm can help you handle your family law case in Illinois, including divorce, custody, and mediation services.

How is Cryptocurrency Handled in an Illinois Divorce?

Bitcoin is already making waves in 2025, as cryptocurrency investors watch closely after Donald Trump’s second presidential inauguration on January 20. Trump has issued over 100 executive orders on his first day in office, including measures that impact Bitcoin and the broader digital asset industry. However, the rise-and-rise of Crypto in the U.S. means the rise-and-rise of Crypto in divorce cases.

Cryptocurrency is no longer a niche financial asset—it’s mainstream. In 2024, global cryptocurrency ownership reached over 420 million people, with Bitcoin and Ethereum dominating the market. A flurry of executive orders could come within Trump’s first 100 days, with crypto orders enacted on Day One, Reuters reported in late December.

As digital currencies become more integrated into financial portfolios, their presence in divorce cases has surged. For many couples in Illinois, dividing cryptocurrency presents unique challenges beyond traditional assets. From extreme price volatility to the decentralized nature of digital wallets, handling cryptocurrency in divorce requires careful consideration. 

Below, we explore the most pressing challenges, including valuation, tracking ownership, and navigating tax implications, and how Illinois law addresses these issues. 

What is Cryptocurrency?

Cryptocurrency is a form of digital currency that operates on decentralized blockchain technology. Unlike traditional fiat currencies, central banks do not regulate cryptocurrencies. Although Bitcoin remains the most recognized digital asset, the market has diversified significantly with the emergence of alternatives such as:

  • Litecoin
  • Solana
  • Ethereum
  • Zcash
  • Monero, among others.

These digital currencies have gained traction for their unique features and applications, extending beyond financial transactions into smart contracts, privacy, and decentralized applications. As cryptocurrency becomes more mainstream, its integration into various aspects of life is expected to expand further. Now, let’s explore how cryptocurrency impacts divorces across the United States.

Challenges in Handling Cryptocurrency During Divorce

The rise of cryptocurrency has added unique complexities to divorce proceedings in Illinois. Unlike traditional assets, cryptocurrency presents challenges that require tailored, in-depth experience to address effectively. From valuation to ownership tracking and tax implications, these issues can significantly impact the equitable division of assets. Below, we explore the key challenges divorcing couples face when handling cryptocurrency.

  1. Valuation: In Illinois divorce cases, crypto’s valuation date can be critical. Courts typically use the date of filing or the date of trial to assess the value of marital assets, but the fluctuating nature of cryptocurrency might require additional considerations.
  2. Tracking Ownership: Unlike traditional financial accounts, cryptocurrencies are often stored in digital wallets or blockchain platforms without easily accessible account statements. This decentralized nature can make it challenging to identify and verify holdings.
  3. Tax Implications: Converting cryptocurrency to cash or transferring it to another party may trigger capital gains taxes. Illinois courts may consider these tax consequences when dividing assets to help ensure an equitable distribution.

Understanding Equitable Distribution In Illinois

Under Illinois law, property acquired during the marriage is generally considered marital property subject to equitable distribution. Determining whether crypto is marital or non-marital involves examining when and how it was acquired. As an equitable distribution state, Illinois courts divide marital property fairly and justly rather than strictly equally. This process takes into account several factors, including:

  • Contributions of Each Spouse: Efforts in acquiring, preserving, or increasing the value of the marital property.
  • Length of the Marriage: The duration of the union plays a significant role in how property is divided.
  • Primary Caregiver Status: Consideration of which spouse primarily cared for the child/children.
  • Economic Circumstances: The spouse’s financial standing at the time of division.
  • Prenuptial or Postnuptial Agreements: Any existing agreements that dictate property distribution.
  • Personal Factors: The age, health, occupation, and future needs of each spouse.
  • Other Relevant Factors: Any additional elements the court finds pertinent to achieving a fair outcome.

Understanding how property is classified and divided is essential, especially in cases involving complex assets like cryptocurrency. If you’re having difficulty navigating property division in Illinois, working with an experienced crypto divorce attorney can help provide clarity and guidance tailored to your situation.

Steps to Handle Cryptocurrency in Illinois Divorces

Cryptocurrency has introduced a new level of complexity to divorce cases in Illinois. However, with the right legal representation, couples can effectively navigate these challenges and work toward a fair and equitable resolution. 

  1. Full Financial Disclosure: Illinois law requires both parties to a divorce to provide full financial disclosure, including listing all assets, including cryptocurrencies. If one spouse suspects the other is hiding cryptocurrency assets, they may need to employ a forensic accountant to trace transactions on the blockchain.
  2. Accurate Valuation: Accurate cryptocurrency valuation is essential to ensure fair division. This may involve hiring a professional to assess the value of the digital assets on a specific date. Courts may also consider appointing a neutral financial professional to provide a valuation.
  3. Division of Assets: Once the cryptocurrency’s value is determined, the court will decide how to divide it equitably. This does not necessarily mean a 50/50 split. Illinois courts consider various factors, such as each spouse’s contribution to the marital estate, the duration of the marriage, and each party’s economic circumstances.
  4. Addressing Hidden Assets: Courts may allow for subpoenas of cryptocurrency exchanges or blockchain transactions if there is suspicion of hidden cryptocurrency. Forensic accountants can track transactions and identify digital wallets, helping ensure that all assets are accounted for.

Given the complexities of cryptocurrency in divorce cases, hiring an experienced divorce attorney is crucial. An attorney with knowledge of digital assets can help ensure that your rights are protected and that all assets are accurately accounted for and fairly divided.

Practical Tips for Divorcing Couples

Divorce can be challenging, especially when assets like cryptocurrency are involved. Unlike traditional financial assets, cryptocurrency poses unique challenges due to its digital nature. Below are some practical tips to help ensure a smoother process and equitable outcome.

  1. Gather Documentation: Collect all records of cryptocurrency transactions, including purchase receipts, transfer records, and wallet addresses.
  2. Work with Professionals: Consider hiring financial professionals, such as forensic accountants and a crypto divorce attorney, to help ensure accurate valuation and discovery.
  3. Be Transparent: Illinois courts mandate full financial disclosure, including cryptocurrency holdings. Failing to disclose these assets can result in serious legal repercussions. Partnering with an experienced divorce attorney can help you navigate these complex requirements.
  4. Plan for Taxes: Understand the tax implications of transferring or cashing out cryptocurrency during divorce.

How a Crypto Divorce Attorney Can Help Best Divorce Attorney

Navigating a divorce involving digital assets can be complex, especially in 2025, as cryptocurrencies and other digital holdings continue to grow in prominence. Partnering with a divorce attorney experienced in handling digital assets can help ensure that nothing is overlooked during the asset division process. At Masters Law Group, our experienced attorneys are well-equipped to assist you in the following ways:

  • Professional Guidance: We collaborate with financial professionals to help accurately evaluate the value, ownership, and tax implications of digital assets, providing a fair and comprehensive assessment.
  • Negotiation and Mediation: Our attorneys can facilitate amicable discussions to help couples reach mutually agreeable solutions for dividing digital assets, often avoiding litigation.
  • Court Representation: We advocate for our clients in court, where decisions on digital asset division are made based on applicable laws and regulations.

From the volatile nature of cryptocurrency valuations to the complexities of ownership in online businesses, our divorce attorneys offer the knowledge and support needed to navigate these challenges. Trust Masters Law Group to provide valuable guidance in assessing and dividing digital assets during divorce proceedings.

Final Thoughts

In conclusion, the evolving role of cryptocurrency in divorce proceedings highlights the importance of understanding this emerging asset class. As digital currencies like Bitcoin continue to gain mainstream traction, they bring new challenges—and opportunities—to the division of marital assets. For individuals navigating divorce, having a legal team well-versed in cryptocurrency’s complexities is crucial for ensuring a fair and transparent settlement.

At Masters Law Group, we excel in helping clients address the unique financial aspects of divorce, including cryptocurrency assets. Whether it’s identifying, valuing, or dividing these digital holdings, our experienced team is here to guide you every step of the way. 

If you have questions about dividing cryptocurrency or other financial assets in your divorce, contact our experienced divorce attorneys today to schedule a complimentary consultation.

Cryptocurrency & Divorce FAQs

Can cryptocurrency be hidden during a divorce?

Yes, but doing so is illegal and can result in significant legal penalties. Courts in Illinois have mechanisms, such as forensic accounting, to uncover hidden assets.

How is the value of crypto determined?

The value is typically assessed based on the market price on a specific date, such as the filing date or trial. Due to cryptocurrency’s volatility, courts may require a valuation to help ensure accuracy.

What happens if one spouse refuses to disclose cryptocurrency assets?

If a spouse fails to disclose assets, the court may impose penalties, including awarding a larger share of marital property to the other spouse. Working alongside experienced legal counsel can help enforce disclosure through discovery tools.

Is cryptocurrency considered marital or non-marital property?
Courts will evaluate each case individually. Assets purchased during the marriage are generally considered marital property, while those acquired before the marriage, by gift or inheritance, may be classified as non-marital.

What if the cryptocurrency value changes during the divorce?
Cryptocurrency’s volatility can complicate asset division. Courts may use valuation professionals and strategies like assigning a percentage of the total crypto holdings instead of a fixed dollar amount to account for market fluctuations. Working with a trusted divorce attorney can help you navigate these challenges.

Disclaimer: This blog is for informational purposes only and does not constitute legal advice. Every divorce case is unique, and cryptocurrency handling can vary based on specific circumstances. For personalized legal guidance, consult with the experienced divorce attorneys at Masters Law Group.

The Era of Cryptocurrency Divorce

Cryptocurrency divorce is a new phenomenon sweeping the nation and the globe. If you are facing these unchartered waters, an experienced family law attorney is a must.

The rise of the cryptocurrency market has seen exponential growth, which has led to the less navigated world of cryptocurrency divorce.

Crypto assets are notoriously difficult to trace and control, and the legal landscape surrounding cryptocurrencies is still full of gray areas, making them complex to handle in divorce proceedings. At Masters Law Group, we understand the complexities of uncovering hidden assets, such as cryptocurrencies.

In this blog, we’ll walk you through everything you need about crypto assets in divorce cases to ensure a fair settlement. Here’s what you should know.

Understanding Cryptocurrency 

Cryptocurrency, a form of digital currency, utilizes cryptographic technology to secure transactions and verify the transfer of assets. Initially attractive for its anonymous transactions, it has evolved to become widely used for everyday purposes such as bill payments and online purchases. According to a recent NBC News poll, approximately 20% of Americans have engaged in cryptocurrency investments, trading, or usage, showcasing its growing presence in the financial landscape. Notably, the demographic group with the highest participation comprises men aged 18 to 49.

While Bitcoin remains the most well-known cryptocurrency, the market has seen the rise of other digital currencies, such as:

These alternatives have gained popularity due to their unique features and potential for diverse applications beyond financial transactions. As the world becomes more familiar with cryptocurrency and its benefits, its integration into various aspects of daily life will likely continue expanding. Let’s look at how crypto affects divorces across the United States.

Why Cryptocurrencies Matter in Divorce

Cryptocurrencies have emerged as a noteworthy factor in financial settlements during divorce proceedings. However, with the rising popularity and widespread adoption of cryptocurrencies, more divorce cases involve these digital assets. CNBC recently reported that in 2023, crypto played a significant percentage in divorces that ranged from 20% to 50%.

As the landscape of financial assets evolves, it becomes essential for divorcing couples and their legal representatives to stay informed about cryptocurrencies and their implications in the division of assets. Failure to address these digital assets adequately during divorce proceedings may lead to complications and disagreements in determining fair settlements.

Cryptocurrencies’ decentralized nature and relative anonymity can make it challenging to track and value them accurately, complicating the delicate process of dividing marital property. Additionally, sudden price fluctuations in the cryptocurrency market can significantly affect the overall value of a couple’s assets, further complicating matters.

Asset Division In Illinois

If you suspect that your spouse may be concealing cryptocurrency assets, there are steps you can take to investigate the matter thoroughly. In divorce proceedings, fully and honestly disclosing all assets, including cryptocurrencies, is crucial. In Illinois, dividing cryptocurrency assets follows a similar process as any other marital property.

Illinois does not adhere to the community property principle. Instead, the court will distribute assets purchased, converted, or appraised during the marriage in an equitable manner. It is important to understand that equitable does not necessarily mean equal; various factors are taken into account in determining the distribution, including:

  • Age, health, and financial circumstances of each spouse.
  • Contributions made to the marital estate.
  • Obligations related to previous marriages, as ordered by the court.
  • Considerations regarding child custody.
  • Pre and post-nuptial agreements.
  • Tax implications.
  • Duration of the marriage.
  • Alimony arrangements.

If you ever find yourself uncertain about the ownership of assets, seeking legal counsel promptly is advisable to avoid any confusion or ambiguity.

Agreements on Dividing Crypto Assets

Dividing crypto in divorce cases can be challenging due to their fluctuating value. However, with careful consideration, the process can be made relatively straightforward. Here are some approaches to handle it:

  1. Simple Division: One party receives a portion of the cryptocurrency as it is at the time of the divorce.
  2. Custodial Holding: A third-party custodian receives and holds the share of cryptocurrency until the divorce is finalized.
  3. Cryptocurrency Owner Liquidation: The asset owner converts the other party’s share into cash based on the digital currency’s value on the day of the sale.
  4. Liquidation With No Claim Upon Remaining Cryptocurrency: Similar to option #3, both parties agree that the original owner retains full title to the remaining cryptocurrency.

It’s important to note that there are no loopholes in divorce proceedings concerning cryptocurrency. While courts are familiar with handling the volatility of traditional assets, cryptocurrency introduces a new level of complexity.

Work With Masters Law Group

Navigating the complexities of cryptocurrency asset division during a divorce in Illinois can be overwhelming. At Masters Law Group, we understand the intricacies involved and are here to assist you every step of the way. Our skilled attorneys, serving communities across Chicago and the suburbs of Elmhurst, Hinsdale, DuPage, and Oakbrook, offer experience and insights into the world of the crypto divorce and can help you navigate this complex process.

Whether you have inquiries about divorce proceedings or require guidance on discovering digital assets and asset division, we are ready to provide answers and support.

Contact us today to schedule a complimentary consultation and learn how we can support you through your crypto divorce.