Getting divorced: what happens to your virtual assets?
In today’s fast paced world, the impact of social media, online transactions and digital assets will have increasing impact in the UK Family Courts. They will need to adapt to changing personal circumstance and look at the impact of virtual assets and online presences in many cases.
Social media is often cited as a contributing factor in relationship breakdowns because it is so much easier to connect to an old flame or to be tempted to rant about your spouse. Indeed, it is estimated that Facebook is referenced in around 1 in 5 divorce petitions. Photographs are readily available online which can show a how a divorcing spouse spends their money, how the children are treated and as evidence of new relationships. Separated partners can also find themselves quarrelling about whether photographs of their children should be posted online. Whilst social media is an advanced and now commonplace way of communicating, it can fuel animosity in a relationship breakdown.
It is common for online accounts to be held in joint names, so if a couple separate, how do you deal with a digital photograph collection or music playlist, both of which can carry significant sentimental value. Sometimes, these collections can be copied for both parties, otherwise, it is likely that a joint Twitter account, for example, will have to be transferred from both names to the other. The Courts imminently face challenges of dealing with virtual assets, which could carry very real value. The rise of online currency, such as Bitcoin means that it is potentially easier for a divorcing spouse to hide assets online. In a divorce, each party has a duty to give full and frank information as to their financial circumstances. Therefore, if one party has significant virtual currency, this information should be disclosed. However, in the murky online world, it can be much easier for cash to be hidden in unidentifiable cryptocurrency accounts and therefore it is important for a separating couple to be alive to this issue, particularly in an acrimonious divorce.
Furthermore, online assets can have real cash value. In the USA, a virtual nightclub was sold by an online gamer called Jon Jacobs for $600,000. This virtual asset was of significant value in real terms and it is likely that the Courts will see a rise in virtual assets being included within Family matters. Similarly, businesses can be run online and be a valuable asset in its own right and also provide a steady income. All these are relevant matters when dealing with a divorce or separation.
It is important to take early legal advice on these issues in order to preserve family assets and ensure that appropriate action is taken in a timely fashion. Lawyers will have to scour bank transactions for unusual activity and raise appropriate questions. The Courts can take a robust approach in relation to misleading or fraudulent information provided in a divorce. Appropriate questions need to be asked at the right time in order to protect family finances and ensure that fair outcomes are reached.
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