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‘Crypto’ was once a niche concept but has now become commonplace. Bitcoin, Ethereum, Dogecoin, etc. are now used in everyday vernacular and are becoming more ordinary methods of payment.
Most digital asset platforms provide account holders with a degree of anonymity. This means that it is incredibly difficult to obtain information regarding your partner’s assets unless they have disclosed that (a) they have digital asset holdings and (b) where they are (i.e. Bitcoin in a Coinbase wallet, Ethereum in a MetaMask wallet, etc.).
A way to address this prior to marriage is to have clear rules regarding asset disclosure, agreed valuation dates, methods of distribution following separation or divorce, and consequences for failure to disclose or produce information related to those records. For example, a clause in a prenup could require each party to allow a phone extraction so that a crypto forensic expert can determine the amount and value of digital holdings at their discretion.
This also resolves a very difficult issue for courts given the volatility of digital assets and the method of distribution. For example, at the Date of Separation, Bitcoin could have been valued at $25,000/Btc, at the time of filing the Petition for Dissolution it could be valued at $120,000/Btc, and on Day 1 of Trial it could be valued at $60,000/Btc. There are also tax consequences, transfer costs, and practical issues to consider. Coming to an agreement about how to address the volatility and method of distribution is the most efficient manner of dealing with digital assets.
In executing a prenuptial agreement, both parties are expected to disclose all their assets and debts, identify what is to remain separate and what is considered community, and what happens to that property in the event of separation or divorce. This includes digital assets.
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