Author: BCNTR
With our lives increasingly intertwined with technology, the division of digital assets is an area that shouldn’t be overlooked in a divorce.
Digital assets include any content, such as photos, videos, music and documents, stored on smartphones, tablets, computers or remote servers that make up the cloud.
Part of any divorce is determining how to divide what has been accumulated during the marriage. Digital areas to address include streaming media accounts, digital copies of music, movies or TV shows, personal content, such as family photos and videos, and digital copies of financial documents. Coming to an agreement on how these assets will be handled in the divorce settlement is important, and each issue can be resolved in various ways:
- Streaming media accounts: Subscription services such as Netflix and Apple Music will need to be terminated or assigned to one party or the other. If there’s a family account, the divorce settlement should specify who takes that over and when that must occur.
- Purchased media: Digital copies of commercial movies, TV shows or music purchased and downloaded over the years have value. Access to those media files may or may not depend on an ongoing subscription service.If the service is a joint account, steps will need to be taken to transfer ownership to one party or the other. If the account is in one person’s name, the value of that content can be factored into property division.
- Personal photos and videos: The most treasured digital assets are irreplaceable family photos and videos. The value of these assets is sentimental rather than financial. Our smartphones and computers are brimming with photos of children, beloved pets and life events. Fortunately, technology allows these files to be easily duplicated. It’s important for a divorce settlement to specify what will be shared, how and when. A divorce may not be contentious, but things change. If there’s no obligation for a party to share personal photos and videos, then the other party could lose out on those precious memories.
- Digital documents: Files such as tax returns, financial statements and other important information are often stored electronically. Those documents can become important for accountants when dividing investments to establish the cost basis for calculating gains or other tax consequences.
After a couple’s digital assets have been documented, the specifics of how they will be divided can be determined. Who has possession of the files? Who controls access to the accounts and subscription services? How will the digital assets be transferred? Technology provides simple solutions. In the last five years, cloud-based storage has made the transfer and duplication of files much easier than copying files onto physical media, such as hard drives.
A divorce settlement should include an obligation for the parties to share the digital assets defined in the agreement. It’s important to have that in place as a court order, so there’s a legal remedy if a party doesn’t follow through after the divorce.
If a divorcing couple are able to talk amicably, we advise clients to deal with plans to share digital assets ahead of a settlement. You may want to download copies of important files to your devices before the divorce is made final. The division of digital assets may not be foremost on your mind if you’re considering a divorce, but identifying simple solutions early on can prevent lingering frustration.
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