Protecting Your Cryptocurrency Assets
Cryptocurrency is a digital, virtual currency that is not regulated by any central authority or bank. The currency involves a series of encryption codes that are stored in virtual wallets, which can be cloud based or in “cold” storage.
Bitcoin, Litecoin, and Ethereum are but a few of the seemingly endless iterations of cryptocurrency. The use of these currencies have had a profound effect on Estate Planning, Estate Administration, and asset divisions in Dissolution of Marriage and Legal Separation cases. Common questions and concerns that arise when it’s time to access these currencies are:
How will your family know that you have cryptocurrency upon death?
They probably won’t, is the short answer. Unless it was discussed at some point, there is a substantial chance that your family will not be able, practically speaking, to locate or access your cryptocurrency. Cryptocurrencies can be tricky because there is no 1-800 number or storefront that you can just approach to inquire.
In a divorce, is my spouse entitled to any of my cryptocurrency?
In short, yes. Cryptocurrency is an asset like any other asset. In Colorado, if the cryptocurrency is a marital asset, it will be subject to equitable division along with the other marital assets of the spouses. It is important to disclose these assets to the other side during a divorce proceeding.
There are endless questions that people have about cryptocurrency in divorce and at death. Speaking with an attorney is your best bet to make sure that the rights steps are taken with respect to your digital assets.