In recent months, there has been an online explosion of NFT digital artwork. The Bored Ape collective has brought a great deal of attention to this art exchange, with many people beginning to wonder what this marketplace is about. Digital artists, art collectors, and celebrities are creating a whole new market that exists outside of the traditional model of art collection.
NFTs, or non-fungible tokens, are becoming popular topics in tech, business, and culture articles, and as they become more commonplace, it has become necessary to think about them in different aspects of our daily life. One of those areas happens to be divorce. Before entering into a discussion of NFTs and divorce, it is worth covering what exactly they are, so that we can understand why they would be considered a marital asset.
Non-fungible tokens represent an individual’s ownership of unique digital items, like art, collectibles, and even real estate. They are secured on a blockchain, or a digital exchange, and each NFT has one owner. Non-fungible is an economic term that signifies the uniqueness of an item. In the world outside of digital contexts, this could mean things that you physically possess, like your furniture or a song file on your computer. They cannot be exchanged for other items because they possess certain unique qualities and worth.
NFTs, on the other hand, are wholly unique, with each one having an owner that exists on the public record. In terms of compatibility, the only infrastructure that is required is a blockchain, like the Ethereum marketplace, and content creators only need access to the blockchain global market to sell their work. Finally, creators can retain ownership rights, and even claim resale royalties.
In contested or uncontested divorces, the possession of NFTs can create complications, but there are ways to count them as marital assets. If you have a high value NFT, it may be considered like any other piece of rare art. Unlike cryptocurrency, which can be divided up with some effort, NFTs cannot necessarily be divided. And with fluctuating markets, it can be difficult to lock down a monetary value of an NFT when the time comes to split up marital assets. One could, however, sell the NFT (while having to pay a royalty to the creator) and divide up the proceeds with their soon-to-be former spouse in a divorce in Autauga County, Alabama.
With more and more young people investing in digital assets, there are extra considerations that they need to bear in mind when it comes to divorce. While cryptocurrencies and NFTs can be a lucrative, and often enjoyable, investment, their role in divorce proceedings is tangible. Even in an easy divorce in Madison County, or anywhere else in Alabama, the parties need to address all digital assets such as NFTs and divide them like all other assets.
Attorney Steven A. Harris regularly blogs in the areas of family law, bankruptcy, probate, and real estate closings on this website. Mr. Harris tries to provide informative information to the public in easily digestible formats. Hopefully you enjoyed this article and feel free to supply feedback. We appreciate our readers & love to hear from you!