Cryptocurrency is no longer a niche asset held by a small group of tech enthusiasts. It has become part of mainstream investing, wealth building, and business transactions. Bitcoin, Ethereum, and other digital currencies can represent significant value, and their volatility means they can grow—or shrink—rapidly in a short period. For engaged couples in Orlando, the question of how cryptocurrency will be treated in marriage is an important one.
Without a prenuptial agreement, Florida’s equitable distribution laws will control the division of cryptocurrency in divorce. These default rules may not reflect the couple’s intentions, and the unique nature of digital assets can create challenges in identification, valuation, and division. An Orlando prenup lawyer can draft a customized agreement that addresses these challenges and provides certainty for both spouses.
Why Cryptocurrency Requires Special Attention in a Prenup
Cryptocurrency has characteristics that make it different from traditional investments. It can be stored in online exchanges, hardware wallets, or even on paper through private keys. Transactions can be anonymous, and ownership can be hard to trace without proper documentation.
In divorce, these factors can make it difficult to determine what cryptocurrency exists, when it was acquired, and how much it is worth. Without a prenup, disputes over these issues can lead to lengthy and expensive litigation. A well-drafted prenuptial agreement allows the couple to set clear rules for ownership, classification, and division long before any conflict arises.
An Orlando prenup lawyer can create terms that remove uncertainty and prevent the unique nature of cryptocurrency from becoming a legal headache in the future.
Classifying Existing Cryptocurrency Holdings
The first step in addressing cryptocurrency in a prenup is to identify all existing holdings. Each wallet, exchange account, and coin type should be listed, along with the quantity owned at the time of the agreement. This creates a clear baseline for determining what is separate property.
A prenup can classify these existing holdings as the separate property of the owner, ensuring they remain untouched in divorce. The agreement can also state that any appreciation, interest, or staking rewards generated by these holdings will remain separate.
An Orlando prenup lawyer will ensure the documentation is thorough, attaching schedules that provide both transparency and enforceability.
Handling Cryptocurrency Acquired During the Marriage
Without a prenup, cryptocurrency acquired during the marriage is generally considered marital property, even if only one spouse purchased it. A prenup can change this default rule, classifying all cryptocurrency acquired during the marriage as separate property, marital property, or a combination based on specific terms.
For example, the agreement could state that cryptocurrency purchased from marital earnings will be marital property, while cryptocurrency received as a gift or inheritance will remain separate. The couple can also decide whether the increase in value of separate cryptocurrency during the marriage remains separate or becomes marital.
An Orlando prenup lawyer can draft these distinctions with precision, avoiding vague language that could be challenged later.
Preventing Commingling of Digital Assets
Cryptocurrency can easily be commingled, especially when multiple wallets or exchange accounts are used for both separate and marital assets. Once separate and marital cryptocurrency are mixed, it can be difficult—or impossible—to trace their origins.
A prenup can require that separate cryptocurrency be stored in designated wallets, with no marital funds deposited into those wallets. It can also mandate that all transactions be documented, including wallet addresses and transaction IDs.
An Orlando prenup lawyer can include practical safeguards to maintain the separation of assets.
Addressing Income from Cryptocurrency
Some cryptocurrencies generate income through staking, lending, or mining. Without a prenup, this income earned during the marriage may be treated as marital property, even if it comes from separate holdings.
A prenup can classify this income as separate property, keeping it with the owner of the underlying asset. Alternatively, the couple may choose to share such income while keeping the principal separate.
An Orlando prenup lawyer will ensure these income provisions are consistent with the rest of the agreement.
Valuing Cryptocurrency in Divorce
Cryptocurrency’s volatility can make valuation challenging. Its worth can change dramatically from one day to the next, and different exchanges may list slightly different prices.
A prenup can establish how cryptocurrency will be valued in divorce, such as using the average price across specific exchanges on a particular date. It can also set procedures for choosing an appraiser or using market data sources.
An Orlando prenup lawyer can ensure the valuation method is practical and fair, preventing disputes when the agreement is enforced.
Division Methods for Cryptocurrency
If the couple decides that some cryptocurrency will be shared, the prenup can define the method of division. Options include:
- Transfer in kind: Sending the actual cryptocurrency to the other spouse’s wallet.
- Cash equivalent: Selling the cryptocurrency and dividing the proceeds.
- Offset: One spouse keeps the cryptocurrency, while the other receives assets of equal value.
The prenup can also specify who will be responsible for any transaction fees, taxes, or penalties associated with the division. An Orlando prenup lawyer will structure these terms to minimize cost and complexity.
Security and Access Provisions
Ownership of cryptocurrency is meaningless without access to the private keys or seed phrases needed to transfer it. A prenup can require that access information for marital cryptocurrency be stored securely in a way that both spouses can access if necessary.
The agreement can also set rules for what happens to cryptocurrency upon the death of the owner, coordinating with estate planning documents to ensure a smooth transfer.
An Orlando prenup lawyer will help integrate these provisions with both marital and estate planning goals.
Protecting Against Hidden Cryptocurrency
Because cryptocurrency can be stored anonymously, there is a risk that one spouse could conceal holdings. A prenup can require ongoing disclosure of cryptocurrency balances and transactions, along with penalties for failing to do so.
These penalties could include awarding the entire concealed amount to the other spouse or adjusting the division of other assets. An Orlando prenup lawyer can include strong enforcement provisions to discourage concealment.
Tax Considerations for Cryptocurrency in Divorce
Cryptocurrency transactions can have tax consequences, including capital gains or losses. A prenup can specify how tax liabilities will be allocated if cryptocurrency is sold or transferred as part of a divorce settlement.
An Orlando prenup lawyer can ensure these terms comply with tax laws and work with tax professionals to minimize the financial impact.
Updating the Agreement Over Time
The cryptocurrency market evolves quickly, with new coins, tokens, and platforms emerging regularly. A prenup that addresses cryptocurrency should be reviewed periodically to ensure it reflects the couple’s current holdings and the state of the market.
Florida law allows couples to amend their prenup after marriage with mutual consent. An Orlando prenup lawyer can prepare updates that keep the agreement relevant and enforceable.
Avoiding Common Mistakes
When addressing cryptocurrency in a prenup, couples should avoid:
- Failing to list all current holdings in detail.
- Mixing separate and marital cryptocurrency in the same wallet.
- Ignoring income from staking, mining, or lending.
- Using vague valuation methods.
- Overlooking security and access provisions.
An Orlando prenup lawyer can prevent these errors through careful drafting and practical advice.
Integrating Cryptocurrency Provisions with the Rest of the Prenup
Cryptocurrency clauses should not stand alone—they should work in harmony with the rest of the prenup. Provisions on property division, income classification, debt responsibility, and estate planning should all be consistent.
An Orlando prenup lawyer will ensure the entire agreement is cohesive, making it easier to enforce and less vulnerable to challenges.
Frequently Asked Questions
Can a prenup keep all my cryptocurrency separate in divorce?
Yes. A prenup can classify your cryptocurrency holdings—existing and future—as separate property, along with any appreciation or income.
Do I have to disclose my cryptocurrency in the prenup?
Yes. Full disclosure is required for enforceability, including wallet addresses, balances, and types of cryptocurrency.
What if I acquire more cryptocurrency during the marriage?
Without a prenup, it will likely be marital property. A prenup can keep it separate if that is the agreed intention.
How do we decide what my cryptocurrency is worth in divorce?
A prenup can set a valuation method, such as using the average exchange rate on a specific date.
Can a prenup address how my spouse will get access to marital cryptocurrency?
Yes. It can set rules for storing and sharing private keys, passwords, and access methods.
What happens if my spouse hides cryptocurrency in divorce?
A prenup can impose penalties for concealment, including awarding the hidden assets to the other spouse.
The McKinney Law Group: Protecting Orlando Clients with Strong, Enforceable Prenups
A well-drafted prenup can help prevent financial disputes and protect your hard-earned assets. We guide Orlando couples through the process with transparency and care.
Call 813-428-3400 or email [email protected] to arrange a consultation.