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A: This is a great question and one that’s becoming more common as cryptocurrencies like bitcoin continue to grow in popularity.

The division of digital assets during divorce can be challenging, but with the right approach and family lawyer by your side, you can ensure a fair division.

Digital assets hold value in a digital format and can include cryptocurrency, digital art (NFTs), online business accounts, and even domain names.

With the rise of digital currencies, many people now hold significant investments in bitcoin, and other cryptocurrency.

Unlike traditional assets such as stocks or property, digital assets may not have a physical component and are more difficult to track and value, making their division more complex during a divorce or separation.

Like other assets, the value of digital assets can grow during a marriage or relationship, which may require them to be divided in the event of a divorce or separation.

In Ontario, the family law system works under the principle of Net Family Property (NFP) equalization.

This means that, generally, each spouse is entitled to half of the increase in the value of the family property during the marriage.

While a 50/50 split isn’t always guaranteed, both parties are required to disclose the value of all assets and liabilities accumulated from the date of marriage to the date of separation or divorce.

Like all other assets, digital assets and their accumulated value must be included in the NFP calculation.

If the bitcoin was purchased during the marriage or significantly increased in value during the marriage, it is considered part of the net family property and must be divided accordingly.

Unfortunately, digital assets, particularly cryptocurrencies, can be difficult to trace.

Since they are stored in digital wallets and aren’t tied to a physical location or traditional financial institution, they can be hidden or under-represented.

If your spouse fails to disclose digital assets, it can result in serious legal consequences, and in some cases, even impact the final division of assets.

I highly recommend reaching out to a knowledgeable divorce lawyer who understands how cryptocurrency works in relation to the Family Law Act.

To protect yourself when managing digital assets in a divorce, take precautions early on.

It can be helpful to address digital assets at the beginning of a marriage or relationship through a marriage contract/pre-nuptial agreement.

Keeping your digital assets and any wealth accumulated from them separate from your spouse may simplify the separation or divorce process if the relationship comes to an end.

Additionally, keep track of any cryptocurrency purchases, sales, or transfers made during your marriage, and document the current value of these assets.

If you’re the one holding digital assets, be sure to fully disclose them to avoid any issues later in the process.

Remember that hiding assets or failing to disclose them can have serious legal implications, so transparency is necessary.

If you suspect that your spouse has digital assets they haven’t disclosed, consider hiring a forensic accountant that can help track cryptocurrency transactions, verify wallet addresses, and determine the value of these digital assets.

By understanding how digital assets work, getting help from the right experts, and making sure all financial information is shared, you can ensure you receive a fair divorce settlement.