Cryptocurrency can complicate divorce if you’re not prepared. Its unique nature makes it different from bank accounts or real estate. In Massachusetts, you need to understand how courts handle digital assets.
Understand how courts treat cryptocurrency
Massachusetts courts treat cryptocurrency like any other marital asset. If you or your spouse acquired it during the marriage, it may be subject to division. Even if only one of you bought it, the value may still be shared. Courts aim for an “equitable” split, which doesn’t always mean equal. Factors like your income, contributions to the marriage, and financial needs all play a role.
Identify and value digital assets accurately
You’ll need to identify all cryptocurrency holdings, even those stored in digital wallets or on foreign platforms. If your spouse tries to hide crypto, it could affect the final settlement. Make sure every coin is listed and valued using fair market rates from a reliable source. Because crypto prices change often, timing matters. Courts typically use the value as of a certain date, like the date of separation or trial.
Consider the tax and transfer implications
Selling or transferring cryptocurrency can trigger capital gains taxes. The person receiving crypto might face tax issues down the road. It’s important to understand how the transfer affects your tax obligations. You may need to adjust the overall property division to reflect these costs. Courts don’t want one spouse stuck with a tax-heavy asset while the other walks away clean.
Keep future value and risk in mind
Cryptocurrency is volatile. A coin worth thousands today could drop tomorrow. When accepting crypto as part of your share, think about risk. Courts may offset this by awarding other assets to balance the value. You should weigh stability against potential gains when deciding what to keep.
Cryptocurrency adds a layer of complexity to your divorce. If you understand how Massachusetts courts handle it, you can avoid surprises. Make sure your assets are valued fairly and consider future risk and tax impact before making final decisions.