When people think about divorce, they often imagine splitting a house, cars, or a bank account. But in today’s world, couples also have online businesses, social media channels that earn ad revenue, and digital currencies like Bitcoin.
In Texas, these “digital assets” are treated much like any other type of property in a divorce. That means they can be subject to division when a marriage comes to an end.
At The Cook Law Firm & Associates PLLC, we understand how hard it can be to figure out who gets what when dealing with digital property. As a Texas divorce lawyer, Justin D. Cook is here to guide you through each step of the process.
Why Do Digital Assets Matter in a Texas Divorce?
Digital assets have grown more common as our lives shift online. A few examples include cryptocurrency (like Bitcoin or Ethereum), Non-Fungible Tokens (NFTs), online storefronts (for example, a profitable Etsy shop), and social media accounts that can bring in advertising or sponsorship money. These assets may carry real-world value—even if they only exist in a “virtual” space.
If you or your spouse have digital assets, a judge may include them as part of the marital estate. In a Texas divorce, most property that a couple acquires during marriage counts as community property. Even if you never hold a physical coin or can’t see your earnings in a real shop, digital assets can still play a major role in how property is split.
How Does Community Property Law Affect Digital Assets?
Texas uses a “community property” system for dividing marital property. This rule means that any property you and your spouse get during your marriage generally belongs to both of you. So, if you started investing in cryptocurrency or building an online store after you said, “I do,” those assets will often be considered community property.
On the other hand, property you owned before you married is typically your separate property, as long as you kept it separate. That can include digital assets purchased prior to your wedding date. However, you must be careful. If you combine (or “commingle”) your separate digital assets with community funds, it can become difficult to prove that you alone should keep those assets.
What About Separate Property for Digital Assets?
In many cases, digital assets can remain separate property if you got them before you were married, if you received them as a specific gift or inheritance, or if you kept them carefully segregated from marital finances. For example, suppose you inherited cryptocurrency from a family member, and you’ve only ever used it in a separate wallet not linked to your joint accounts. As long as you show strong records, you might argue that it’s your separate property.
If you’re trying to prove an asset is separate, it’s best to have detailed documents like wallet addresses, purchase records, or even tax returns that show when you acquired it. If you can’t produce convincing proof, the court might treat that digital asset as community property.
How Do You Value Digital Assets?
Valuing digital assets can be one of the hardest parts of a modern Texas divorce. Stocks, real estate, or cash in the bank are simpler to measure because you can look at market rates or account balances. But the price of cryptocurrency, NFTs, or online businesses can change quickly and sometimes dramatically. That’s why it’s wise to hire professionals who know how to evaluate digital property.
A valuation expert might look at a variety of details, such as current market prices for cryptocurrency or potential earnings from an online business. They may also consider the platform’s future growth or the popularity of a social media channel. Because digital assets can fluctuate a lot, courts usually look at their value at the time of the property division, not the date you filed for divorce. This rule can make things more complicated if prices spike or crash in the meantime.
Why Is Good Record-Keeping So Important?
When you’re dealing with digital assets, strong record-keeping is your best friend. Because these assets can be stored on various websites or in digital wallets, it’s easy for a spouse to claim they don’t exist or to move them around without the other spouse noticing. If you’re the one who owns or manages these assets, you’ll want records to show their true value and when you acquired them.
If you’re the spouse who suspects hidden digital assets, you’ll need to share that information with your Texas divorce attorney so they can request documents, check transaction histories, or bring in experts who know how to find digital footprints. Good records—including transaction receipts, screenshots of account balances, or tax documents—can help prove exactly what each spouse owns.
What Factors Do Courts Consider When Splitting Digital Assets?
In Texas, the court tries to split community property in a way that is “just and right.” This doesn’t always mean a strict 50/50 split. Judges can look at factors like each spouse’s financial situation, age, health, and potential earning power, as well as any separate estates. When dealing with digital assets, a judge might also think about how easy it is to convert an online asset into real money, and whether that asset is stable or prone to value swings.
The judge might also consider whether either spouse tried to hide or misuse digital assets. For instance, if one spouse attempted to move cryptocurrency into a secret wallet right before filing for divorce, the court might take that action into account and adjust the property division accordingly.
Can Mediation Help with Digital Asset Division?
Yes. Because digital assets can be difficult and stressful to value, mediation often gives couples a private setting to discuss fair solutions. During mediation, each spouse can talk about what they want to keep and why. With the help of a neutral third-party mediator, they can negotiate a plan that works for both sides.
Mediation also saves time and money, compared to a long court battle. If you reach an agreement during mediation, you can avoid having a judge decide. By creating a customized plan, you might be able to split digital assets in ways that keep everyone’s best interests in mind. This often leads to less hostility and more control over the final outcome.
What If the Value of Digital Assets Changes Quickly?
Cryptocurrency prices can jump or fall unexpectedly, and NFTs can lose popularity in a matter of months. Because Texas courts consider the value of property at the time of division, a sudden market shift can make a big difference in the final split. If the digital asset’s value has dropped significantly, you might end up with less than you expected. If it skyrockets, you might owe more to your spouse to maintain a fair share.
To protect yourself, keep an eye on market changes while your divorce is ongoing. If you expect a major price change, you may want to discuss possible updates to your property division plan with your lawyer. In some cases, you might arrange a “true-up” clause that adjusts the division based on price changes within a short window of time.
Ready to Protect Your Digital Assets? Contact a Texas Divorce Lawyer Today!
Determining digital asset division can be complicated, but you don’t have to do it alone. At The Cook Law Firm & Associates PLLC, we understand how modern technology has changed the divorce landscape.
Our team is here to help you identify, value, and divide digital assets in a way that is fair and thorough. Whether you hold cryptocurrency, run an online business, or share a high-value social media account with your spouse, we have the knowledge to guide you every step of the way.
If you’re looking for a Texas divorce lawyer to protect your interests and fight for your rights, reach out to us at 210-740-0281 or fill out our online contact form to schedule a consultation. Let us help you secure the future you deserve.