Is Cryptocurrency Considered Marital Property in a New Jersey Divorce?

If you or your spouse owns cryptocurrency, it’s important to determine whether the asset is considered marital or separate property during your divorce. Continue reading for more information and work with a knowledgeable Morristown property distribution attorney for skilled representation.

What is Cryptocurrency?

Cryptocurrency is a digital asset that uses cryptography to facilitate secure financial transactions. It only exists in electronic form and is not issued or regulated by a central authority like a financial institution or government. Instead, it uses a blockchain, a decentralized digital ledger that records transactions.

Crypto can be used to store value, transfer funds, or even pay for goods and services. There are many different cryptocurrencies but some popular ones include Bitcoin, Ethereum, Tether, and XRP. While they can possess value, it’s important to note that cryptocurrencies are different from traditional currency as they are not a legal tender and their values can fluctuate dramatically.

Is New Jersey an Equitable Distribution State?

Yes, New Jersey is an equitable distribution state. This means that during a divorce, marital assets are not necessarily divided 50/50, but rather in a way the court deems fair and just. The division is based on a number of factors, including the length of the marriage, each spouse’s earning capacity, the age and health of each spouse, and the financial contributions of each spouse.

Is Cryptocurrency Considered Marital Property in an NJ Divorce?

Only marital property is subject to equitable division in New Jersey, so it is imperative that you understand whether or not your digital assets fall into this category. Cryptocurrency is generally treated like any other financial asset, like a bank account or a retirement fund, for the purpose of equitable distribution. Determining whether crypto or any other asset is marital or separate property relies on when the asset was acquired.

Cryptocurrency is considered marital property if it was acquired by either or both spouses during the course of the marriage, up until the date divorce was filed. This includes crypto purchased with marital funds, crypto earned as compensation during the marriage, or even crypto gifted to one spouse if the gift was intended to benefit the marriage. Any appreciation in the value of the crypto that occurred during the marriage is also typically considered marital property, regardless of who managed the account.

On the other hand, cryptocurrency is treated as separate property if it was acquired by one spouse before the marriage or after the date of the complaint for divorce was filed. Assets received by one spouse as a gift or inheritance from a third party during the marriage are also usually classified as separate property. However, if separate crypto funds were commingled with marital funds or actively managed and enhanced by the efforts of either spouse during the marriage, a portion of the value might be subject to equitable division.

To protect your legal rights and financial future during your divorce, contact an experienced attorney today.