How to Divide Digital Assets in a Divorce

In today’s world, a significant portion of our lives, and now oftentimes our wealth, exists online. From cryptocurrency and NFTs to cloud storage, social media, and digital business ventures, dividing digital assets during a divorce has become increasingly complex. Understanding how Washington law treats these assets can help protect your interests and ensure a fair division.

What Are Digital Assets?

Digital assets include anything of value stored electronically. Common examples include:

• Cryptocurrency (e.g., Bitcoin, Ethereum)
  
  
• NFTs and digital collectibles
  
  
• Online investment or trading accounts
  
  
• Digital businesses or income streams (e.g., YouTube channels, Etsy shops)
  
  
• Domain names or websites
  
  
• Cloud-stored intellectual property or photos
  
  
• Loyalty points and digital wallets

Even seemingly personal items, like digital photo libraries, can become part of a property division discussion.

How Washington’s Community Property Laws Apply

Washington is a community property state, which means most assets acquired during marriage are presumed community/jointly owned property. This includes digital assets if they were created, earned, or purchased during the marriage. For instance, cryptocurrency purchased with marital funds or a monetized YouTube channel developed while married could be considered community property.

Assets owned before the marriage, or those acquired through inheritance or gift, may be treated as separate property. However, if those assets are commingled—such as using marital funds to invest further in crypto, they can lose their separate character.

Challenges in Dividing Digital Assets

Digital assets pose unique challenges, including:

• Valuation – Cryptocurrency and NFTs can fluctuate dramatically in value, making it difficult to determine a fair division point.
  
  
• Tracking and Disclosure – Some assets, like cryptocurrency, are easily hidden or transferred without paper trails. Full disclosure is legally required, but enforcing transparency may require digital forensic investigation.
  
  
• Access and Control – Gaining access to digital accounts can be difficult if one spouse controls the passwords, keys, or login information.

Protecting Your Interests

If you suspect your spouse holds digital assets, your attorney may work with forensic accountants or digital investigators to identify and value them accurately. Keep detailed records, including purchase histories, exchange statements, and account credentials where possible.

Avoid attempting to move or sell digital assets unilaterally. Courts take a strict view on the concealment or dissipation of marital property, and violating court orders can have serious legal consequences.

Planning Ahead
When possible, couples can simplify digital asset division by:

• Including digital property specifically in financial disclosures.
  
  
• Agreeing on valuation dates to account for price volatility.
  
  
• Deciding whether to divide the assets themselves or offset their value with other property.
  
  
• Establishing future rules for handling jointly used digital accounts or data.

Work with Experienced Guidance
Dividing digital assets in a divorce requires legal, financial, and technical understanding. At Magnuson Lowell, P.S., our experienced Washington divorce attorneys work closely with financial professionals to help ensure your digital property is properly identified and fairly divided.

We offer free telephone case evaluations. Contact us today 425-800-0576 to see if we’re a good fit to help protect you in this new digital time.

During a divorce, parents often focus on dividing property like homes, bank accounts, and retirement funds. But some assets, such as college savings accounts, custodial accounts, or a vehicle primarily used by a child, don’t fit neatly into the usual property division framework. These assets are typically held for the benefit of the children, not either parent, and require special care in how they’re managed after separation.

Common Types of Child-Related Assets

• 529 College Savings Plans: These education accounts are owned by one parent but are meant for the child’s future tuition and expenses.
  
  
• Custodial Accounts (UGMA/UTMA): Funds legally belong to the child but are managed by a parent as the custodian until the child reaches adulthood.
  
  
• Vehicles for Teenage Drivers: Often titled in a parent’s name, but primarily used by a child for school, work, or activities.
  
  
• Savings or Investment Accounts for Minors: Sometimes set up jointly by parents or funded by family members as gifts to the child.

How These Assets Are Handled in a Divorce

Unlike traditional marital property, most child-related assets are not divided between the parents. Instead, courts and attorneys focus on ensuring the asset continues to serve its intended purpose, benefiting the child. However, disputes can still arise over who controls or contributes to these accounts after divorce.

Key considerations include:

• Ownership and Control: Who will remain the custodian or account holder?
  
  
• Future Contributions: Will both parents continue contributing to a 529 plan or child’s savings?
  
  
• Usage Restrictions: How and when can funds be used for the child’s needs?
  
  
• Transparency: Will the other parent receive statements or access to monitor the account?

Addressing 529 Plans in Divorce

A 529 plan is legally owned by one parent, who can change the beneficiary or even withdraw funds. That’s why clear language in the divorce agreement is critical. Many settlements include terms requiring:

• Both parents to use the funds only for qualified education expenses.
  
  
• Notice and consent before making withdrawals or changes.
  
  
• Agreements on continued contributions and how future educational costs will be shared.

Vehicles and Other Tangible Assets
When a child drives a vehicle titled to a parent, that car is technically marital property. However, in practice, most parents agree to continue letting the child use it. Settlement agreements often specify who will:

• Retain legal ownership and insurance responsibility.
  
  
• Pay for maintenance, registration, and repairs.
  
  
• Replace the vehicle if it’s damaged or sold.

Collaborative Solutions Work Best

Courts prefer when parents work together to preserve these assets for the child’s benefit. A cooperative, well-drafted parenting or property settlement can prevent future conflict by clearly outlining how each account or asset will be managed.

How Magnuson Lowell, P.S. Can Help

At Magnuson Lowell, P.S., our family law attorneys help parents identify and protect assets meant for their children. We draft practical agreements that balance control, accountability, and flexibility—so you can focus on your child’s future without unnecessary disputes.

If you’re navigating a divorce and have questions about dividing or managing child-related assets, contact us today for a free telephone case evaluation 425-800-0573

When a divorce involves significant property, business ownership, or complex financial structures, accurate valuation is essential. Unfortunately, assets aren’t always straightforward. Income can be hidden, expenses can be inflated, and property can be undervalued. In these cases, a forensic accountant can be one of the most important experts on your team.

What Does a Forensic Accountant Do?

A forensic accountant is a financial professional trained to analyze and interpret complex financial data. In a Washington divorce, they help attorneys and clients:

• Identify hidden or transferred assets.
• Trace income sources and expenditures.
• Value businesses, investments, and retirement accounts.
• Review tax returns for inconsistencies.
• Analyze spending patterns and unusual transactions.

Their findings often serve as key evidence during negotiations or at trial.

When Should You Hire a Forensic Accountant?

Not every divorce requires one, but a forensic accountant is often helpful if:

• One or both spouses own a business.
• There are suspicions of hidden assets or unreported income.
• The couple has complicated investment accounts or properties.
• One spouse handled all finances during the marriage.
• There’s a large disparity between reported income and lifestyle.

Early involvement allows the expert to collect data before it disappears or becomes harder to trace.

How They Work with Your Attorney

Forensic accountants work closely with your family law attorney to:

1. Review disclosures and financial records.
2. Prepare expert reports detailing findings.
3. Provide sworn testimony in depositions or court if necessary.
4. Help calculate equitable divisions and potential support amounts.

Their objective analysis adds credibility to your financial claims and helps prevent costly mistakes or unfair settlements.

Costs vs. Benefits

While hiring a forensic accountant adds expense, the potential return often outweighs the cost, especially when significant assets are at stake. Identifying hidden accounts, correcting undervaluation, and proving income clarification can shift the financial outcome substantially.

Protecting Your Financial Interests

High-asset divorces require precision, experience, and a clear understanding of financial evidence. At Magnuson Lowell, P.S., we regularly collaborate with forensic accountants to ensure every dollar and asset is properly accounted for.

If you’re facing a complex divorce in Washington, contact us for a free telephone case evaluation 425-800-0573 to discuss whether a forensic accountant may help protect your financial future.