Dividing cryptocurrency in a Michigan divorce presents unique challenges, as digital assets are newer and often have fluctuating values. As Michigan is an “equitable distribution” state, assets are divided fairly, though not necessarily equally, and this rule applies to cryptocurrencies like Bitcoin, Ethereum, and others if they qualify as marital property. Here’s what you should know about dividing cryptocurrency during a Michigan divorce.

Determining Marital vs. Separate Crypto Assets

As with other assets, the first step is to determine whether cryptocurrency holdings are classified as marital or separate property. Cryptocurrency acquired before marriage is generally considered separate property and remains with the original owner. However, if the cryptocurrency was purchased or its value grew due to investments made with marital funds, it could be deemed marital property. Any crypto bought or mined during the marriage is usually classified as marital property and is subject to division.

Valuing Crypto Holdings

Valuing cryptocurrency can be tricky due to its volatility. Unlike traditional assets, the value of crypto can change dramatically within hours. It’s essential to establish a specific valuation date for these assets, and sometimes courts may consider a weighted average to account for fluctuations. Hiring a financial expert familiar with cryptocurrency valuation can be helpful to ensure an accurate assessment.

Tracking and Disclosure

Cryptocurrency can be difficult to trace, and its anonymity can make it easier to hide. Both parties are legally obligated to disclose all assets during divorce, including crypto holdings. Forensic accountants specializing in digital assets can help uncover any undisclosed or hidden assets if there are concerns of non-disclosure.

Legal and Financial Guidance

Consulting both a Michigan family law attorney and a financial professional with expertise in crypto is critical. They can guide you through the specifics of valuing, tracking, and dividing cryptocurrency in a way that is equitable. With the right support, you can ensure a fair division of these digital assets.

At Richards Family Law, we understand that navigating divorce and child custody matters can be overwhelming and emotionally challenging. Our dedicated team of experienced attorneys is committed to providing you with the best legal advice tailored to your unique situation. We prioritize your family's well-being and work diligently to ensure your rights are protected throughout the process. From negotiating fair settlements to advocating for your children’s best interests, we are here to guide you every step of the way. Trust Richards Family Law to deliver compassionate support and expert legal representation as you move forward to a brighter future.