Divorce requires a couple to divide their marital property, including traditional assets like homes and bank accounts, but how does Michigan law treat cryptocurrency and financial interests in other digital assets?
For example, do cryptocurrency investments and other digital currencies qualify as an asset subject to equitable distribution? When do crypto holdings become marital funds? The answers to these questions may have significant implications for your divorce and affect how you approach a divorce settlement.
A variety of issues may arise when dividing cryptocurrency holdings in a divorce. The good news is that seeking experienced legal assistance from the family law attorneys at Kraayeveld Family Law can help you understand the interplay between cryptocurrency and divorce in Michigan and make it easier to pursue your fair share of your marital property in the divorce process.
Is Cryptocurrency Considered Marital Property in Michigan?
In Michigan, any property acquired by spouses during their marriage usually becomes marital property, regardless of how the parties title or pay for an asset.
However, some assets acquired during a marriage, such as inheritances and exclusive gifts, may not qualify as marital property and instead remain separate property not subject to division in divorce unless they are commingled with other funds. Furthermore, any assets acquired before marriage could also constitute separate property.
Michigan courts treat cryptocurrency like any other asset, despite its intangible nature, just as assets like stocks, bonds, certificates of deposit, or retirement accounts can also qualify as assets subject to division as marital property. Full financial disclosure requires addressing cryptocurrency.
How Is Cryptocurrency Handled in Divorce?
When a court determines that a spouse’s cryptocurrency holdings qualify as marital property under Michigan divorce law, the holdings may become subject to equitable distribution.
Michigan’s equitable distribution rules require courts to divide marital assets fairly between spouses. However, a fair distribution does not always result in an even division. Instead, courts consider various factors to determine what a fair split looks like, including the length of the marriage, each spouse’s contributions to acquiring marital property (including contributions as a homemaker and support for the other spouse’s pursuit of educational, professional, or business opportunities), age, health, and each spouse’s earning capacity.
Due to the technology underlying many forms of cryptocurrency, identifying cryptocurrency assets owned by a spouse may become difficult. Parties may need the services of a computer forensic analyst or a forensic accountant to uncover hidden assets, trace transactions, secure private keys, and prove that the digital assets qualify as marital property.
It may also be necessary to consult experienced tax professionals when dividing digital assets in divorce cases, since capital gains taxes on exchange accounts could have potential tax consequences. Financial experts may be needed to provide accurate valuations of digital wallets and crypto transactions. The volatile nature of cryptocurrency values and the potential tax implications make crypto asset division more complex than that of other marital assets.
Why You Need Experienced Counsel for a Crypto Divorce
Working with our divorce attorneys for dividing cryptocurrency assets can help you protect your financial rights and interests during divorce proceedings. At Kraayeveld Family Law, our legal team can guide you through the complex issues surrounding cryptocurrency owned by you or your spouse, including locating cryptocurrency assets, obtaining valuations, identifying cryptocurrency holdings as marital property, and seeking an equitable distribution of marital crypto assets under Michigan law.
Contact Kraayeveld Family Law today or call anytime at (616) 383-2679 for a confidential consultation with an experienced divorce lawyer to learn more about how Michigan treats digital assets, such as cryptocurrency, in divorce. When you choose us to represent you in a divorce, you can trust that our attorneys will focus on removing stress and building the foundation for a future that allows you to move forward to the next chapter of your life. Our office is conveniently located at 990 Monroe Ave. NW Grand Rapids, MI 49503. Feel free to visit us for a case evaluation!
