Digital Divorce: Who Gets the Airline Miles and Music Files?

Tips & Advice

Something you’ll want to know about all those movies, mp3s, eBooks, air miles, and hotel points you’ve accrued over the yearsthey’re digital assets that can factor into a divorce settlement. 

Understandably, several factors determine the distribution of assets in a divorce. However, when it comes to dividing digital assets, divorce settlements and proceedings are charting new territoryThe rate of digital innovation and adoption in recent years has filled our phones, tablets, and computers with all manner of digital assets. What’s more, there are also the funds sitting in our payment apps or possibly further monies kept in the form of cryptocurrencies like bitcoinPut plainly, the law is catching up with regards to the distribution of these and other digital assets like them. 

Yet one thing that the law recognizes is that digital assets can have value and thus can be considered property subject to distribution in a divorce. 

In light of this, the following is a checklist of considerations that can help prepare you or someone you know for the distribution of digital assets in a fair and just way.  

Nothing offered in this article is legal advice, nor should it be construed as such. For legal advice, you can and should turn to your legal professional for counsel on the best approach for you and the laws in your area.  

What is a digital asset? 

For starters, let’s get an understanding as to what actually constitutes a digital asset. 

Because laws regarding digital assets vary (and continue to evolve), the best answer you can get to this question will come from your legal counsel. However, for purposes of discussion, a digital asset is any text or media in digital form that has value and offers the bearer the right to use it.  

To put that in practical termslet’s look at some real-world examples of what could constitute a digital asset. That list includes, but is not limited to: 

  • Photo libraries 
  • eBook libraries 
  • Digital movies 
  • Digital music 
  • Digital currency, such as bitcoin 
  • Air miles 
  • Hotel points 

However, digital assets can readily expand to further include: 

  • Subscriptions to streaming services and online publications 
  • Online game accounts—and in-game items associated with them 
  • Currency stored in online payment platforms 
  • Online storefronts, such as eBay, Etsy, or business websites 
  • Website domain names, whether in use or held speculatively for later resale 
  • Documents kept in cloud storage, like financial documents and ancestry research 

And like any other asset in the case of a divorce, a value will be ascribed to each digital asset and then distributed per the conditions or orders of the settlement. 

What digital assets do you have? 

Arriving at the value of specific digital assets begins with an inventory—listing all the digital assets and accounts you own, just as you would with any other monetary or physical assets like bank accounts, properties, and carsWhen you go through this process, chances are you’ll quickly find that you have hundreds if not thousands of dollars of digital assets.  

For example, we can look at the research we conducted in 2011 which found that people placed an average value of $37,438 on the digital assets they owned at the time. Now, with the growth of streaming services, digital currency, cloud storage, and more in the past ten years, that figure feels conservative. 

Above and beyond preparing for a divorce settlement, taking such an inventory of your digital assets is a wise move. One, it provides you with a clearer vision of the things you own and their worth; two, maintaining such a list gives you a basis for estate planning and determining who you would like to see receive those assets. Likewise, maintain that list on a regular basis and keep it safe. It’s good digital hygiene to do so. 

What are digital assets worth in a divorce? 

With this inventory, each asset can then have an assessed value ascribed to it. In some instances, a value will easily present itself, such as the cost of a subscription or how much money is sitting in a PayPal account. In other cases, the value will be sentimental, such as the case is with digital photos and videos. Ideally, you and your spouse will simply be able to duplicate and share those photos and videos amicably, yet it is important that you articulate any such agreement to do so. This way, a settlement can call out what is to be shared, how it will be shared, and when. 

Identify which digital assets cannot be transferred 

Not all digital assets are transferrable. Certain digital assets are owned solely in your name. In other words, you may have access to certain digital assets that cannot transfer to someone else because you do not have the rights to do so per your user agreement. This can be the case with things such as digital books, digital music, and digital shows and movies.  

In such circumstances, there may be grounds for negotiation and a “limited transfer” in the settlement, where one party exchanges one asset for another rather than splitting it equally. A case in point might be a sizeable eBook library on a device that’s in the name of one spouse. While that library can’t be split or transferred, one spouse may keep the eBook library while another spouse keeps a similarly valued asset or group of assets in return—like say a collection of physical books. 

Streaming services and divorce 

Streaming services will need to be addressed too. Be prepared to either terminate your accounts or simply have them assigned to the person in whose name they are kept. In the case of family accounts, the settlement should determine how that is handled, whether it gets terminated or similarly turned over to one spouse or the other. In all, your settlement will want to specify who takes over what streaming service and when that must occur. 

Cryptocurrencies like bitcoin and divorce 

Like dividing up investment accounts where the value of the account can vary daily, digital currencies can present challenges when spouses look to divide the holdings. Cryptocurrency valuation can be quite volatile, thus it can be a challenging asset to settle from a strict dollar standpoint.  

What’s more, given the nature of digital currencies, there are instances where an unscrupulous spouse may seek to hide worth in such currency—which is an evolving issue in of itself. This recent article, “Cryptocurrency: What to Know Before and During Divorce,” covers the additional challenges of cryptocurrency in detail, along with an excellent primer on what cryptocurrency is and how it works. 

Ultimately, cryptocurrency is indeed an asset, one that your attorney and settlement process will need to addressspecifically so that there are no complications later with the transfer or valuation of the awarded currency. 

Passwords and divorce 

With accounts changing hands, now’s the time to start fresh with a new set of passwords. What’s more, we have a tendency to reuse the same passwords over and over again, which may be known to an ex-spouse and is an inherent security risk in of itself. Change them. Even better, take this opportunity to use a password manager. A password manager can create and securely store strong, unique passwords for you, thus saving you the headache of maintaining dozens of them yourself—not to mention making you far more secure than before. 

 Seek out a legal professional 

Again, keep in mind that nothing here is legal advice. Yet, do keep these things in mind when consulting with an attorney. The reality is that we likely have thousands of dollars of what could be considered digital assets. Inventorying them and ascribing a fair market value to them along with your legal professional is the first step in a fair and just settlement. 

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