Safeguarding Your Digital Assets During a Kentucky Divorce

 

In today's world, a significant part of your life—both financial and personal—isn’t stored in a filing cabinet; it’s stored digitally. As a family law attorney here in South Central Kentucky, I’ve seen that safeguarding these digital assets can be just as important to clients as securing their home or retirement funds during a divorce. Failing to properly disclose, value, or protect these items can lead to both financial and emotional heartache down the road.

 

Digital assets are treated by Kentucky courts just like any other marital property, and that principle applies to both complex financial accounts and irreplaceable family memories. The key to a fair division is transparency and thoroughness.

 

What Counts as a Digital Asset?

When I talk about digital assets, I am focused on two major categories:

1. Financially Valuable Assets: These are items with a clear dollar value, often overlooked because they aren't physical.

• Investments & E-Wallets: Any accounts holding stocks, bonds, or mutual funds managed through online platforms (like Robinhood), as well as services like PayPal and Venmo.
• Cryptocurrency: This is the emerging frontier. Any holdings in Bitcoin, Ethereum, or other digital currencies held in exchanges (like Coinbase) or self-hosted wallets must be identified and valued.
• Business Assets: Domain names, e-commerce stores, digital intellectual property, and business-focused social media accounts.

 

2. Personal and Sentimental Assets: These are items with real emotional value that need to be preserved and divided fairly.

• Stored Media: Access to and copies of family photos, videos, home movies, and correspondence stored on shared cloud services (like Google Drive or iCloud).
• Digital Libraries: Ownership of purchased movie libraries (iTunes, Amazon Prime), music libraries, and e-book collections.
• Loyalty Points & Gaming: Highly valued airline miles, credit card points, or high-value virtual property within online games.

 

Protecting What's Yours: A Three-Step Plan

The first step you should take is to secure your accounts and gather documentation.

1. Change Passwords & Secure Access: Immediately update passwords for all financial accounts, primary email, and shared devices to ensure your privacy and security. For shared cloud storage, if you can, go ahead and download all family photos and videos onto a separate, secure drive for preservation.
2. Gather Comprehensive Records: Download or print statements for all investment and crypto accounts, documenting balances and transaction history. We can’t divide what we don’t know exists. For personal assets, document how libraries and cloud accounts will be split or replicated.
3. Be Honest & Proactive: Attempting to hide a digital asset—especially volatile ones like cryptocurrency—is considered financial misconduct and can severely damage your credibility in court. Be upfront with your attorney about everything.

 

Digital assets can be more complex than tangible assets like real estate, and their value can fluctuate wildly. It is important to fully identify and properly value these assets, ensuring that your financial settlement is equitable and accurate. Taking proactive steps now will give you confidence and security as you navigate your divorce.

 

Disclaimer: This blog post is for informational purposes only and does not constitute legal advice to any current or future client of Reed Law Group, PLC.