August 17, 2020 | Share
Digital Assets and Divorce: What Do Texas Residents Need to Know?
When you get divorced in Texas, your “separate property” is yours to keep, while your “community property” is subject to division. All of your assets will fall into one of these two categories (or partially fall into both)—including digital assets that you acquired before and during your marriage. In order to protect your digital assets during your divorce, it will be important to work with a McKinney family lawyer who is experienced in handling these types of matters.
What is a Digital Asset?
For divorce purposes, a digital asset can be defined as anything you own that only exists in the digital realm. Just as your physical assets include everything from your clothes and furniture to your family home, your digital assets include everything from music and movie libraries to cryptocurrency wallets. In order to be characterized as a digital asset, an item does not have to be financial in nature. In fact, even your social media accounts are considered digital assets that are potentially subject to division in your divorce.
When Does a Digital Asset Qualify as Community Property?
The same rules that apply to physical assets and intangible assets such as bank accounts and retirement accounts apply to digital assets as well. This means that a digital asset will generally qualify as community property if:
- You or your spouse acquired the digital asset during your marriage;
- You or your spouse acquired the digital asset prior to your marriage but the asset grew in value during your marriage (in which case a portion of the asset may qualify as community property); or,
- You signed a prenuptial or postnuptial agreement that designates a digital asset as community property regardless of when it was acquired.
So, for example, if you started an iTunes account or built a digital photo library during your marriage, the account or library will most likely qualify as community property. Likewise, if you started an Instagram account or YouTube channel during your marriage, this (as well as any associated business) will likely qualify as community property as well.
How are Digital Assets Divided in a Texas Divorce?
During a divorce, digital assets that qualify as community property can potentially be divided in a number of different ways; and, in some cases, they may not need to be divided at all. For example, it is fairly common for each spouse to keep his or her own social media accounts, while photo libraries and certain other types of digital assets can simply be duplicated so that each spouse retains a separate copy.
However, larger digital assets can become sticking points, and in some cases it may be necessary to find a way to “split the baby.” For example, spouses may need to agree to divide a cryptocurrency wallet, or one spouse may need to give up his or her interest in a bank account or physical asset in order to obtain sole ownership of a digital asset that is on the table in the divorce.
Discuss Your Divorce with a McKinney Family Lawyer at Nordhaus & Nordhaus, PC
Do you own substantial digital assets that may be at risk in your divorce? If so, we encourage you to speak with one of our attorneys. To schedule a free and confidential consultation with a McKinney family lawyer at Nordhaus & Nordhaus, PC, please call 214-726-1450 or contact us online today.
Categories: Family Law & Divorce