Today’s world is rapidly changing. In the last decade, we have seen an enormous surgency of digital currency and assets. These digital currencies are found in the form of cryptocurrency.
Q: What is cryptocurrency?
Cryptocurrency is a digital asset known as electronic currency. They are decentralized and not typically maintained by a bank or government. There is an estimate of over 20,000 forms of cryptocurrency. Bitcoin, being the first decentralized cryptocurrency, uses a “blockchain” as a leger—keeping track of all transactions. As of the date of this article, Bitcoin is valued around $97,000.00 per coin. Read more about cryptocurrency here [insert link to article from SR, Apr. 2024].
Q: Are cryptocurrency holdings subject to division in a divorce settlement?
Yes. Texas is a community property state. Under the Texas Family Code, any property acquired during the marriage is presumed community property and subject to a just and right division.
Q: When would cryptocurrency not be considered community property?
Generally, property is considered a spouse’s separate property if the property was (1) owned or acquired prior to marriage, (2) inherited, or (3) was received as a gift. This concept certainly applies to cryptocurrency. However, it is the burden of the spouse claiming the cryptocurrency as their separate property to prove by clear and convincing evidence.
Q: How is cryptocurrency valued?
The value of cryptocurrency varies from currency to currency. This typically driven by supply and demand. The value of any given cryptocurrency can be viewed on many websites or apps, as well as a crypto price index. In some cases, a financial expert may be needed to determine the fair market value or a spouses separate property interest.
Q: How do I know if my spouse has cryptocurrency?
If you are unable to assess whether your spouse has cryptocurrency via bank statements or tax returns, then discovery specifically tailored to request for this information will be required.
It is important to have an attorney who understands the constant and ever-changing property trends of our world. We are dedicated to help you in your time of need. If you would like more information or to speak with an attorney, call our office at (832) 781-0320.