In Illinois, digital assets are subject to division of marital property in a divorce under the Illinois Marriage and Dissolution of Marriage Act (IMDMA, 750 ILCS 5/503). The courts explicitly require these assets to be identified, valued, and divided equitably, based on various factors such as the whether assets were acquired prior to the marriage and held separately or were purchased while married; each spouse’s contributions; prenuptial agreements specifically addressing digital asset division in a divorce.
Types of Digital Assets
Digital assets encompass any electronic or virtual property with economic value, often stored in wallets, exchanges, or decentralized platforms. They can be fungible (interchangeable, like cash) or non-fungible (unique, like art). Common types in Illinois divorces include:
Cryptocurrencies and Virtual Currencies – Interchangeable digital money on blockchains, such as Bitcoin (BTC), Ethereum (ETH), Solana (SOL), stablecoins like Tether (USDT), meme coins, gaming tokens, and emerging Central Bank Digital Currencies (CBDCs). These are treated like cash equivalents.
Non-Fungible Tokens (NFTs) – Unique digital certificates of ownership for items like artwork, music royalties, virtual metaverse real estate, or collectibles.
Programmable or Smart Contract Tokens – Assets on platforms with built-in functions, such as lending tokens or yield-generating assets.
Digital Media and Accounts – Photos, videos, movies, or shared streaming subscriptions (e.g., Spotify libraries). Social media accounts with monetized influence (e.g., TikTok earnings) or domain names may qualify if they generate income.
Other Intangibles – Intellectual property like software code, data files, frequent flyer miles/rewards points, or online business holdings (e.g., e-commerce inventory in virtual stores).
Illinois classifies assets as marital if they were acquired during marriage, subject to division – OR – non-marital which means they are pre-marriage holdings, gifts, inheritances, or post-separation gains. Digital assets bought or earned during marriage are presumptively marital, even if only one spouse’s name is on the wallet. If a digital asset is obtained prior to the marriage, but marital funds were used to increase value, a portion of the asset is likely divisible because of the mingling of funds. Prenuptial/postnuptial agreements under the Illinois Uniform Premarital Agreement Act can override division by specifying treatment such as designating the asset as separate property not subject to division in a divorce.
Digital Asset Division Process
1. Disclosure of all financial assets is required by the parties to the divorce, which can be backed up via discovery (interrogatories, depositions, document requests). Spouses must reveal wallet addresses, exchange accounts (e.g., Coinbase, Binance), private keys, and transaction histories. Hiding assets (e.g., in cold storage wallets) violates IMDMA Section 508(b) and can lead to contempt charges, sanctions, or reopening the judgment. Forensic accountants or blockchain experts use various tools to trace transfers, although overseas or decentralized wallets pose challenges.
2. Valuation of digital assets is determined at an agreed date (often filing, trial, or settlement) to account for volatility. Methods include market price from exchanges, expert appraisals for NFTs, and cost basis for tracing appreciation (marital vs. non-marital portions).
3. Equitable split options include liquidating (e.g., convert crypto to fiat) and splitting the proceeds equitably; in-kind transfers where one spouse keeps the asset and the other gets offsetting value from retirement accounts, real estate, or cash; buy-outs where one spouse buys the others share based on the appraised value.
Seek the Help of an Experienced Marital Property Division Attorney
If you are considering divorce and digital assets are part of the picture, it is crucial to document everything (types, receipts, transfers) and consider experts from day one to avoid post-judgment disputes. It is very important to work with an attorney who is experienced in the division of digital assets in a divorce. If you have questions regarding Illinois property division in a divorce, contact the family law office of Ronald L. Bell & Associates for immediate assistance.