During a Texas divorce, marital property must be distributed between the parties. When it comes to marital property, people often think of the marital home, vehicles, and other tangible property. Notably, however, digital assets are also subject to distribution between the parties and are just as important to consider.

If you have questions about protecting your online property and digital assets in a divorce, The Larson Law Office PLLC, is here to help. Use our guide below to learn more about what our Texas divorce attorneys can do for you.

Marital Property Distribution, Generally

Before diving into digital property distribution, it’s important to understand how marital property is distributed in a Texas divorce.

Texas is a community property state, meaning that any property acquired by either spouse during the marriage is typically considered “community property” subject to distribution between the parties in a divorce. Conversely, property that is considered “separate property” is generally not subject to distribution in a divorce. Separate property includes:

Property owned or acquired by either spouse before the marriage;
Property acquired during the marriage by gift, devise, or descent; and
Compensation obtained by either spouse during the marriage as a recovery for personal injuries.

Under Texas Family Code section 7.001, the court in a Texas divorce proceeding will order the division of any marital property in an equitable manner that the court deems to be “just and right.” Usually, this means that the property will be divided equally (50/50), but that is not always the case.

Notably, these marital property distribution rules will apply regardless of the specific type of property being divided.

Common Examples of Digital Assets in Divorce Subject to Distribution

In a divorce, there are a variety of marital assets, both tangible and digital, that can be subject to distribution. Below are some examples of digital assets that are commonly subject to distribution between the parties in a Texas divorce.

Digital Currency

Digital currency, also known as cryptocurrency, is a relatively new type of asset. Cryptocurrencies such as Bitcoin and Ethereum are considered digital assets because they are not tangible. Nevertheless, they do still have value. Thus, if either spouse acquired some form of digital currency during the course of the marriage, these assets will be subject to distribution in a divorce.

Intellectual Property

Intellectual property (IP) is also another common marital asset, often in digital form, that may be subject to division. Copyrights, trademarks, and patents are all types of IP, many of which are related to digital products, software, or creative works. If either spouse creates or acquires any intellectual property during the marriage, any rights in that IP may be considered marital property subject to division.

Non-fungible Tokens (NFTs)

Non-fungible tokens (NFTs) are another form of digital property that have recently gained popularity. NFTs are digital “tokens” that are assigned unique identification codes via a blockchain and can be exchanged for other types of assets such as money, cryptocurrency, or other NFTs. Unique digital artwork or collectibles are examples of NFTs that may come up during a divorce.

Online Businesses

As with a brick-and-mortar business, online businesses and their assets can also be marital property subject to distribution in a Texas divorce. Related digital assets might include online storefronts, any proceeds earned by the business, accounts receivable, or website and domain names established during the marriage.

Loyalty or Benefit Programs

Loyalty or benefit programs are less commonly thought of as marital property but can still be valuable assets to be addressed in a divorce. These might include credit card points or rewards for accounts opened during the marriage or airline frequent flier miles or awards.

Common Issues Associated with Digital Property Distribution

Several issues and complications are associated with distributing digital property in a divorce. Examples of these challenges frequently include:

Determining the appropriate market value of the digital asset;
Identifying and tracking down certain digital assets that are not disclosed by one party;
Ensuring that both spouses continue to have passwords, encryption keys, or other methods to access certain digital assets during the pendency of the divorce proceedings; and
Balancing the need for transparency during the divorce with privacy and data security concerns when disclosing and distributing digital assets.

Digital property distribution can present a variety of complexities and challenges that may not otherwise be present when dealing with tangible property. However, having an experienced team of legal professionals in your corner can be extremely helpful to you and your case moving forward.

How an Attorney Can Help

While you are not required to hire an attorney to represent you in any Texas divorce, doing so can be a great benefit, especially in complex or high net-worth cases involving extensive digital assets. An experienced Texas divorce attorney can help you:

Identify the existence of any digital assets that may be considered marital property in your case;
Determine the appropriate value for any digital assets; and
Engage digital asset valuation professionals, forensic accountants, or other expert witnesses who can provide additional insight into the nature and value of any applicable digital assets;

In short, an attorney can help you navigate what can often be a complicated legal process, all while fighting for your rights and interests along the way.

The Larson Law Office: Your Trusted Texas Divorce Attorneys

At The Larson Law Office PLLC, we have practiced in Texas for over 25 years. Divorce cases are our bread and butter, and we have extensive experience assisting clients at every step throughout the process. Thus, you can feel confident that you will have someone in your corner with the background, skills, and resources to effectively and efficiently fight for your interests.

Even more than that, however, we pride ourselves on providing custom, quality, and personalized representation to every one of our clients. When you hire The Larson Law Office PLLC, that is precisely who you will get—Erik or Diana Larson. We know how important your case is, which is why we do not foist your file onto a paralegal, secretary, or junior associate.

When you’re ready to get started, give us a call to discuss your case and see how we can help you navigate your divorce and digital asset distribution today.

Digital Assets in Divorce: Protecting Your Online Property