When affluent parties divorce, property division can be the most complicated and stressful part of the process. There are countless details to address, and even minor oversights can have costly consequences.
For example, parties may initially overlook digital property. This type of property includes assets that are stored online or digitally, and there are a few ways they can further complicate property division.
They are difficult to value
Assigning value to property is one of the most critical – and complex – steps in dividing assets. To accurately and fairly divide property, you must first determine how much it is worth.
Regarding digital property, values can be a moving target. Assets like websites, logos or even social media accounts that generate revenue can fluctuate significantly in their value. And property such as photos, music libraries and videos may have sentimental value that can distort an individual’s perception of how much they are worth.
They can be easy to hide
Not only is it easy to overlook intangible property like digital assets, but it can also be somewhat easy to conceal it. Without any physical evidence of digital property, one person may be able to own, transfer or otherwise manage valuable assets without the other party’s knowledge.
For instance, Bitcoin or other forms of cryptocurrency can be very difficult to account for if one spouse does not know about it.
That said, failure to fully disclose assets and liabilities during a divorce is a violation of The Ontario Family Law Act. There are serious penalties for this, including financial repercussions and possibly criminal charges.
Ownership can be complicated
Determining who actually owns a digital asset can be surprisingly confusing. Property may belong to a spouse, a business or a third party. To know whether an asset is eligible for division in the first place, you must know who owns it.
Dividing digital assets is just one part of the property division process, and it can be a challenge for anyone. If you have complex assets and high-value property to address, the stakes can be exceptionally high. As such, having legal guidance under these circumstances can be vital.