Getting through a divorce means running a lot of calculations. Some are emotional, such as what will it mean to divide time with my kids or how you’ll break the news to friends and family? Others are more concrete. For example, if one of us keeps the house, how do we equalize the value of the home? What does a fair split of our shared retirement look like once taxes and timing come into play?
But no matter what kind of question you’re trying to answer, one thing remains true: Your calculations are only as good as the information you have.
And today, knowing what details need to be factored in is more complex than it used to be.
With so much of our money, media, and memories stored online, digital assets—and their associated liabilities—have become a key part of divorce settlements. These assets are often valuable, and they’re often easy to overlook.
What is considered a digital asset?
According to the IRS, digital assets are anything of value that’s created, stored, or exchanged electronically.
Some generate income, like cryptocurrency or monetized online businesses. Others—like cloud storage accounts or family photo libraries—hold sentimental or functional value. And while some may seem minor on their own, they can add up quickly.
In divorce, many digital assets and associated liabilities are subject to equitable distribution. But they can be easy to overlook. Some are tucked behind passwords or embedded in everyday services. Others may have grown in value over time without either party fully realizing it.
And even they were acquired before the marriage, such as cryptocurrency, may be subject to division if they were commingled with marital funds, actively managed during the course of the marriage or used to support the household.
The most common types include (but are not limited to):
| Digital Asset Type | Definition/ Explanation | Examples |
|---|---|---|
| Digital assets | ||
| Cryptocurrencies | Digital currencies that are secured by cryptography through computer networks and are independent of a central bank. | Bitcoin, Ethereum, USD Coin |
| Non-fungible tokens (NFTs) | Unique digital items whose encrypted identifiers certify ownership and prevent duplication or copying. | Digital art, Cryptokitties, Music NFTs, Virtual collectibles |
| Online businesses | Web-based businesses, monetized social media accounts, blogs, or websites that generate income or hold value. | Profitable Instagram accounts, YouTube channels, Etsy stores, and monetized blogs |
| Cloud storage | Media or documents stored online in cloud storage platforms that require access management, duplication, or division. | Google Drive, Dropbox, iCloud storage |
| Online subscriptions | Paid subscription accounts, either prepaid annually or monthly, that require assignment of ownership and division based on value. | Netflix, Hulu, Spotify, Amazon Prime, online news subscriptions, grocery delivery services, etc. |
| Entertainment media | Digitally purchased media stored in accounts that might need division or valuation. | Digital libraries of movies, TV shows, audiobooks, and music collections (e.g., iTunes, Audible, Amazon Video) |
| Other digital data | Online loyalty or reward programs offering digital points or currency convertible into real value or purchases. | Airline frequent flyer miles, hotel loyalty points, restaurant rewards, and digital gift certificates |
| Personal Media | Personal digital media with sentimental value stored across various digital platforms that require access and duplication. | Family photos and videos stored on Dropbox, Instagram, Facebook, YouTube, and digital photo frames |
| Digital liabilities | ||
| BNPL and digital credit | Short-term, app-based consumer credit or digital-only accounts | Affirm, Klarna, Apple Card, PayPal Credit |
| Crypto tax obligations | Tax liabilities from gains or unreported transactions on crypto platforms | Capital gains on Bitcoin sales, unclaimed staking rewards |
| Auto-renewal service fees | Ongoing charges for cloud storage, domains, or digital tools | iCloud upgrades, Dropbox Pro, Squarespace |
| Shared payment app balances | Debts accrued through joint use of peer-to-peer platforms | Venmo, Zelle, PayPal balances |
| Early termination penalties | Fees for breaking service contracts on shared or family plans | Software cancellations or bundled cloud service exit fees |
While an individual digital asset might not seem valuable, the cumulative amount can be significant. And because so much of our financial and personal lives exist online, these digital assets can account for a substantial value in divorce proceedings.
Common challenges with digital assets
Even after digital assets are identified, a few common friction points can affect how they’re valued or divided.
Timing and transparency
Digital accounts may not be disclosed right away, particularly when login credentials are held by one party or account activity is unfamiliar.
Avoid this pitfall by including digital accounts in early financial disclosures to ensure they’re reviewed as part of the broader settlement discussion. If you’re unsure about what assets or liabilities exist, you can always consider subpoenas, discovery tools, and in some cases, asset searches to assist.
Overlooking everyday digital property
Streaming services, loyalty programs, and shared photo libraries may not be listed alongside retirement accounts or credit cards points/miles, but they’re often part of the marital estate.
Avoid this pitfall by remembering that dollar amounts don’t determine whether something matters. And don’t forget recurring digital debts, like unpaid subscription fees or shared app store charges. These costs can add up quickly if left unaddressed.
Changing value over time
Digital assets like cryptocurrency or online businesses may gain or lose value throughout a divorce. Without a valuation method, agreeing on how they should be treated can be harder.
Avoid this pitfall by agreeing on how digital assets will be valued, whether by choosing a specific date or averaging the value across a set time frame.
Access and usability
One party may manage most of the digital accounts, which can create gaps in access, especially for assets stored in the cloud or protected by two-factor authentication.
Avoid this pitfall by outlining how access and responsibility for linked accounts will be transferred, shared, or archived for any accounts with shared financial or personal relevance as part of the final settlement.
How digital assets are valued and divided
The challenges that come with digital property—delayed disclosure, limited access, or uncertain value—can complicate division if they’re not addressed early. However, with the right approach, these assets can be accounted for and incorporated into the broader settlement in fair and workable ways.
Assigning value
Some digital assets and liabilities are easy to price. For example, prepaid subscriptions, gift card balances, or media purchases are usually valued based on receipts or account information.
However, others require more analysis. Cryptocurrency, NFTs, online businesses, and monetized content platforms may fluctuate in value or depend on future performance. For these types of assets, the parties may agree to use:
- A set valuation date (such as the date of filing or mediation)
- An average value calculated over a specific timeframe
- An independent valuation by a financial professional
The same applies to digital liabilities. Crypto-related tax obligations, for example, may increase or decrease between the time of separation and settlement. Outlining these liabilities early can help avoid unequal outcomes.
Valuation is also tied to tax strategy. Selling digital assets may trigger capital gains or other tax events that must be factored into how value is calculated and divided.
Attorneys play a key role in helping parties choose consistent valuation methods, coordinate with financial professionals when needed, and structure the process to support long-term fairness.
Dividing the asset
Once an asset or liability has been valued, it can be divided in a few different ways, depending on what it is and how it functions.
- Sell and divide. Some digital assets—like cryptocurrency or high-value NFTs—can be liquidated, with the proceeds split between the parties.
- Offset with other property. One party may keep the digital asset while the other receives something of similar value, such as a larger portion of savings or retirement assets.
- Duplicate or archive. For personal digital property—like family photos, home videos, or shared cloud files—it may make sense to create copies or duplicate access, rather than divide ownership.
- Reassign or transfer. Subscriptions, loyalty accounts, or digital storage may be assigned to one party, particularly if they hold minimal monetary value but have ongoing use. It’s important to know the provider or vendor rules, however, before making determinations between the parties.
In every case, though, documentation matters.
Settlement agreements should include precise language about how the asset was valued, how it’s being divided, and what steps each party needs to take to divide, update or transfer accounts.
Working with an attorney who understands the complexities of digital property can help ensure that valuation methods are defined and that division terms reflect both the nature of the asset and the broader financial picture.
A strategic approach to digital property
Digital property is becoming a standard part of asset distribution in divorce. From account access to valuation methods, they introduce questions that need to be addressed with clarity and documentation.
At Jacobs Berger, we work with clients to identify what’s in play and build a structure around how those assets are treated in the broader context of their settlement. To talk through how digital property may factor into your divorce, schedule a strategic planning session.
