In California, the arrival of digital currencies has been embraced in divorce proceedings and acknowledged as a valuable asset for equitable distribution. The court views cryptocurrencies within divorce cases with the following viewpoint:
- When a couple determines to end their marriage, the court will divide both parties’ assets and debts equitably. This method refers to the division of property.
- When both parties agree that cryptocurrency belongs to one party as part of the divorce settlement, it is essential to consider its value concerning current market prices. The court will consider this during the proceedings.
- Once the worth of the cryptocurrency is known, the court will split it equitably among both parties. This process could involve converting to cash or awarding a certain amount of cryptocurrencies directly between spouses.
- It is essential to remember that the party given cryptocurrency will be accountable for any applicable taxes on their gain. As cryptocurrency falls under capital gains tax, it is necessary to note that courts won’t consider this when dividing property during a divorce settlement.
- In specific scenarios, a court may require one spouse to transfer a confirmed quantity of cryptocurrency to the other partner. This action usually takes place via Qualified Domestic Relations Order (QDRO).
With the ever-changing landscape of property classification and value tracing, staying abreast of the most recent developments with qualified legal assistance is essential. Cryptocurrency has arrived for good and is steadily becoming a prominent factor in California divorce proceedings. Thus, both parties need to be aware of its lawful ramifications before agreeing.
Infographic Source: https://www.blissdivorce.com/resource-center/cryptocurrency-and-divorce-in-california/