When a couple shares digital assets, for purposes of a divorce, they are essentially the same as physical assets and subject to the same rules for division. However, this can be difficult to arrange in some situations and couples that plan to divorce and also share a lot of digital assets should know what to expect.
Digital Photos and Videos
These days, very few of us keep physical photo albums — most of our photos are digital. And, in most cases, folks can just copy everything shared so each ex-spouse has a copy. But if you have photos, videos, or documents on the cloud, using iCloud or Dropbox, for example, the account owner holds all the cards. A difficult spouse could withhold the password and Apple, for example, will not reveal it to the other spouse. So, settle these issues prior to the divorce, and make sure you have all the photos and videos you want before you sign. Or, if for some reason, that is not feasible, make sure to include a provision in the divorce agreement requiring a spouse to cooperate in facilitating the copying of these assets by the other spouse.
Purchased Digital Media
Then there’s the digital stuff you or your spouse buys — digital movies, video games, or other media. Just like with photos, these can be divided along with pots, pans, and the 401-k. The problem is that this copyrighted media cannot be duplicated. So, if these files fall under a single account in one spouse’s name, it may be appropriate to consider this in the property division. On the other hand, in most cases, this is one of those areas in which you don’t want to “make a mountain out of a molehill.” Leave it be — and move on.
Bitcoin and Other Cryptocurrencies
Bitcoin and other cryptocurrencies are digital assets which are discussed here.
“Bitcoin Bitterness Starts to Make Messy Divorces Even Worse,” Hannah George, Bloomberg News (2018) (Jonathan Fields quoted)
Cryptocurrency and Divorce: A Primer
IRS Notice 2014-21: Virtual Currency Guidance
NOTE FROM FIELDS AND DENNIS — THIS IS PART OF A SERIES ON CYBER ISSUES AND DIVORCE. FOR MORE SEE HERE.