Digital Assets in Divorce
Almost all couples will have some form of digital assets - from digital photo albums and Netflix accounts to cryptocurrency - but how are these divided up in a divorce?
A breakdown in a relationship can leave behind a complex web of digital assets. We explore how these may be addressed in divorce.
What is a Digital Asset?
At the time of writing, there is no legal definition of digital assets in the UK. However, it is generally seen to be everything from email accounts, social media profiles, photo libraries, accounts with online stores, air miles and cryptocurrencies. Digital assets can also be bought online, such as virtual items in the gaming world.
In our increasingly digital world, couples need to carefully consider how they may wish to divide these assets on divorce, both in terms of sentimental and monetary value.
How Do We Divide Them?
When settling the finances on divorce, both parties are required to fully disclose their financial position, from bank statements, property and valuable items. If a party fails to disclose an asset, sanctions may be imposed by the court. Digital assets can often be overlooked at this stage. However, you should consider how they will be dealt with early on and be sure to disclose information about yours or your partner's digital assets to your solicitor.
As separating couples often do with physical items, you could consider drawing up a 'digital inventory', making a list of your digital assets. It is helpful to write this list in order of priority or importance to each spouse. This will help both you and your solicitor in any negotiations.
Some digital assets may have only sentimental value. For digital photo albums, it may be as simple as ensuring each party has a copy of the photos. With other assets, such as streaming services accounts, you will need to decide who will keep the account and who will need to set up a new one.
Some digital assets will have a cash value and it is important for parties to be aware of these so they can inform their solicitor and disclose anything of value in financial proceedings. Consider things such as extensive digital music or film collections, an income generating blog or social media account, or even frequent flyer air miles.
Dividing these assets can be difficult, as many files cannot be physically transferred or shared. Therefore, you may need to consider which spouse will take the asset and how the other may be fairly compensated for its value.
How do I Know if My Spouse Has Digital Currency?
Digital currency can be much harder to trace. With the rise of the multi-billion industry of online cryptocurrencies, such as Bitcoin in recent years, these types of currencies can provide an opportunity for a party to 'hide' assets. Cryptocurrencies are virtual and anonymous, which means there are no bank accounts or statements and a party may not even be aware that their ex-partner holds these funds.
These currencies can be valuable and would certainly need to be considered as part of the 'marital pot'. If you think your partner may have such currency but you are unable to find trace of this, a digital forensic expert can be instructed.
If your partner does disclose a cryptocurrency, it is important to obtain regular valuations throughout the financial proceedings in order to have the most up to date and accurate value. Whilst the currency can be worth a lot of money, the market can be very volatile and unpredictable.
Can My Online Data Be Used in Court?
Your online footprint can be used as part of proceedings, such as reference to social media posts. These posts can be relevant in children's proceedings and financial settlements. In a recent divorce case, a husband's claims of debt were quashed by reference to his social media posts and photographs showing off his lavish lifestyle.
The best way to protect yourself online is to ensure that anything you post online you would be happy to say out loud or be brought up in court.