Texas courts treat cryptocurrency like any other property. Crypto you get during marriage is presumed community property unless a spouse proves it is separate with clear and convincing evidence. Courts divide community crypto in a “just and right” way. Judges can weigh taxes, volatility, and any fraud on the community.¹ ² ⁸
What to Know First
- Texas is a community property state. Crypto bought or mined during marriage starts as community property unless proven separate.¹
- Separate property must be traced. Pre‑marital coins, gifts, and inheritances can be separate if you can show the path.¹
- Division is “just and right.” Not always 50/50.² ⁸
- Hiding crypto has consequences. Courts can reconstitute the estate and issue money judgments.²
- Discovery tools reach wallets and exchanges. Disclosures and subpoenas surface records.⁴
- Pick a valuation date and method early. Crypto moves fast; clarity reduces fights.
- Taxes matter. The IRS treats crypto as property. Sales can trigger capital gains.⁵ ⁶ ⁷
- New reporting. Brokers issue Form 1099‑DA for digital‑asset sales starting with 2025 transactions.
- Prenups/postnups can control. Agreements can classify crypto or set division rules.³
- Local focus. We serve Richardson, Dallas, Plano, and Garland, and appear in Dallas and Collin County courts.
- Property division is separate from custody and child support.
How Texas Treats Crypto in Divorce
Crypto is property under Texas law. If you acquired it during the marriage, it starts as community property. To claim it is separate, you must prove it with clear and convincing evidence.¹
Courts divide the community estate in a “just and right” way. That does not mean a hard 50/50. Judges can weigh many factors, including taxes and timing.²
Evidence we rely on:
- Exchange histories and CSV exports
- KYC records and account opening dates
- Wallet addresses and labels
- Bank transfers used to fund buys
- Screenshots with timestamps
Is crypto treated like money or property in a Texas divorce?
Property. Texas applies community/separate rules, and the IRS treats digital assets as property for tax. Basis and gains matter.¹ ² ⁵
Community vs. Separate Property Rules for Crypto
When you got the crypto and how you paid for it control the result. Crypto bought with marital funds during marriage is presumed community. To prove separate property, you must trace back to a premarital purchase, gift, or inheritance.¹
Common pitfalls:
- Mixing separate and community funds on the same exchange
- Selling separate coins and buying new coins during marriage without records
- Staking separate coins and reinvesting rewards during marriage
- Losing the paperwork
Agreements help. A valid prenup or postnup can set the rules.³
Quick Comparison
Issue | Community Property (default) | Separate Property (if proven) |
|---|---|---|
Acquisition | Bought with marital funds during marriage¹ | Owned before marriage, or gift/inheritance¹ |
Proof | Presumed community¹ | Clear & convincing tracing¹ |
Division | “Just and right” split² | Confirmed to owning spouse² |
Are gains after separation community or separate?
Often community until divorce is final if tied to community‑owned coins. If the coins are separate and you can trace them, gains may stay separate. Facts and records decide.¹ ²
Can a prenup control crypto?
Yes. A valid agreement can classify coins, set buyouts, or fix a formula.³
Texas UCC & “Control” (Why custody details matter)
Texas’s Uniform Commercial Code recognizes virtual currency and the concept of “control.” This helps courts and parties plan safe custody, read‑only access, and transfer steps in orders. It supports clear rules on who can move coins during and after the case.⁹
Finding & Proving Crypto: Disclosures, Subpoenas & Tracing
If a spouse will not disclose, we use Texas discovery tools to build the paper trail.
- Rule 194 disclosures: early exchange of financial info.⁴
- Rule 176 subpoenas: to exchanges, payment apps, and banks.⁴
- Bank trails: on‑ramps and off‑ramps show buys and cash‑outs.
- On‑chain tools: block explorers link addresses and flows.
- Protective orders: read‑only access, seed‑phrase safekeeping.
Six Steps to Surface Crypto Fast
- Ask for required disclosures (Rule 194).⁴
- Subpoena exchanges and wallet services (Rule 176).⁴
- Pull bank and card statements for on‑ramps/off‑ramps.
- Use block explorers to match wallet flows.
- Set valuation date(s) and capture snapshots.
- Secure assets with temporary orders.
Can we subpoena Coinbase or Binance in a Texas divorce?
Often, yes. Tie requests to wallet addresses, dates, and transaction types. Expect authentication steps and possible out‑of‑state procedures.⁴
What if a spouse will not provide seed phrases?
Courts can compel production, order read‑only access, appoint a receiver, or issue safekeeping orders. Fees or sanctions may follow non‑compliance.² ⁴
Valuing Cryptocurrency Holdings
Agree on a date and method early. Crypto is volatile, so clear rules reduce disputes.
Common methods:
- Spot price at a set timestamp
- Daily average price
- VWAP (volume‑weighted average price)
Apply the method consistently. Pick a neutral pricing source. Capture screenshots with timestamps. Track forks, airdrops, and staking rewards.⁶
Risk tools: collars (price bands), staged transfers, and equalization payments.
Which valuation date do Texas courts use?
There is no single rule. Parties often agree to a date (mediation or trial). If you cannot agree, judges pick a reasonable date based on the record. Courts aim for fair, workable orders.
A Personal Story from Attorney Migliaccio
A few years ago, we represented a Plano software engineer. His spouse thought he was hiding coins. We sent targeted subpoenas to three platforms and mapped wallet flows on‑chain. Records showed both premarital coins and new buys funded by joint accounts. He had also moved some coins right after filing, which raised a fraud‑on‑the‑community claim.
We traced the coins and split community holdings with an in‑kind transfer to a new wallet, plus an equalization payment to balance the rest. A protective order guarded seed phrases and set clear transfer steps. Both sides left with a fair plan tied to real data. It proved again that early records and simple orders make these cases work.
Options to Divide Digital Assets
Pick the path that fits risk, taxes, and the plan for custody of coins.
In‑Kind Transfers to New Wallets
One spouse transfers agreed coins to the other’s new wallet. Preserves upside. Avoids taxable sales. Needs careful steps.
Watch for: custody logistics, gas fees, and failed transactions.
Offset Trades
One spouse keeps the crypto; the other gets cash or other assets of equal value.
Watch for: valuation swings, liquidity, and basis tracking.
Sell and Split Proceeds
Sell coins and split cash. Simple finality.
Watch for: capital gains, timing risk, and slippage.⁵ ⁷
Division Options — Pros & Considerations
Method | Pros | Watch‑outs |
|---|---|---|
In‑kind transfer | Preserves upside; fewer taxable sales | Custody/security; execution steps |
Offset with cash | Simple for non‑crypto spouse | Valuation swings; liquidity |
Sell & split | Clean exit; easy to equalize | Capital gains; market timing; fees⁵ |
Do we always split crypto 50/50 in Texas?
No. Division must be “just and right.” Judges may award uneven shares based on income, needs, fault, separate estates, and more.² ⁸
Sample Decree Clauses (Plain‑English)
- Valuation: “Bitcoin valued by 2‑day average ending 12:00 p.m. on [date].”
- Transfer: “Spouse A will send 0.75 BTC to Spouse B’s address [____]. Do a $20 test first. Provide TX IDs.”
- Fees: “Sender pays network fees on test; parties split fees on the main transfer.”
- True‑Up: “If BTC is below/above $X at transfer, Spouse A pays/receives $Y equalization within 5 days.”
Tax Implications When Dividing Crypto
The IRS treats crypto as property. Each sale or exchange can trigger gain or loss. Basis and holding period matter.⁵ ⁶ ⁷
- Equalization sales: If you sell to fund a payout, you recognize gains or losses. Plan timing.⁵
- Forks/airdrops: May be taxable when received. Track values and dates.⁶
- Form 1040 digital‑asset question: Answer truthfully and keep records.⁷
- 1099‑DA reporting: Brokers issue Form 1099‑DA for covered sales beginning in 2025. Keep and share tax forms with your CPA.
- Transfers between spouses in divorce: Usually non‑taxable under §1041. The receiving spouse takes over the original basis. Later sales use that basis.⁵ ⁷
What Texas Courts Consider
Courts aim for a fair split under the “just and right” standard. Factors from Murff v. Murff include: earning capacity, ages and health, separate estates, fault, needs, and the nature of the property.² ⁸
Crypto‑specific risks judges weigh:
- Price volatility
- Liquidity and platform risk
- Quality of records and disclosure
- Who can safely manage the asset
Digital Asset Management & Protection During Divorce
Security and documentation reduce loss and conflict.
- Use hardware wallets and strong MFA/2FA.
- Ask for temporary orders to prevent transfers.
- Protect seed phrases with a neutral custodian and read‑only access.
- Log all transfers with TX IDs and timestamps.
- After the decree, rotate keys, update MFA, and track basis.
DFW Standing Orders Snapshot
County | Standing Order for Family Cases? | Practical Note |
|---|---|---|
Dallas | Yes | Attaches at filing; preserves property, including wallets. |
Collin | Yes | Similar protections; served with case papers. |
Denton | Yes | Updated order; follow current form. |
Tarrant | No county‑wide order | Use judge rules and TROs/temporary orders. |
Common Mistakes We’ve Seen
- Assuming Texas splits everything 50/50.² ⁸
- No agreed valuation date/method for a volatile asset.
- Ignoring tax impact and 2025 1099‑DA reporting.
- Commingling separate and community funds without records.¹
- Waiting too long to issue subpoenas; records may vanish.⁴
- Poor security for seed phrases and MFA.
Quick Answers: Micro Q&A
Is crypto property in Texas divorce? Yes. It follows community/separate rules and “just and right” division.¹ ²
Who owns crypto bought during marriage? It starts as community unless proven separate with tracing.¹
Can a prenup control crypto? Yes, if valid under Chapter 4.³
Can courts freeze crypto? Yes. Temporary orders and read‑only access are common.²
Do staking rewards matter? Yes. They can be income and affect division and taxes.⁵ ⁷
Hardware wallet in one name—does that decide ownership? No. Source and timing control, not title.¹
Texas Case Law Spotlight
Murff v. Murff, 615 S.W.2d 696 (Tex. 1981).
The Texas Supreme Court confirmed broad discretion to reach a “just and right” division. Courts may weigh earning capacity, separate estates, fault, needs, and the nature of the property. This flexible rule fits crypto’s volatility and tracing challenges.⁸
Frequently Asked Questions
How do I tell if our crypto is community or separate?
Start with timing and source. Gather onboarding records, CSV exports, bank statements, gift/inheritance papers, and on‑chain data. Without clear proof, the community presumption controls.¹
What records should I collect now?
Exchange CSVs, wallet addresses, TX IDs, staking logs, 1099s, and bank/credit statements tied to buys and withdrawals. Keep two secure copies.⁴ ⁵ ⁷
What is the safest way to transfer crypto between spouses?
Use new destination wallets. Do a small test transfer. Share TX IDs. State who pays fees. Consider supervised transfers or escrow. Use a protective order for seed phrases.²
How do courts lower volatility risk?
Use price windows, VWAP, coin “buckets,” staged transfers, and equalization payments. Put the method in writing.² ⁵
Glossary
Airdrop — Free tokens; can be taxable when received.⁶
Basis — Your cost in the asset; used to compute gain or loss.⁵
Blockchain — Shared ledger of transactions.
Community Property — Property acquired during marriage; presumed community.¹
Digital Asset — Property on a blockchain (crypto, NFTs).⁷
Equalization Payment — Cash/assets used to balance a split.
Fork — Protocol change creating a new coin; may trigger income.⁶
Hardware Wallet — Offline device storing private keys.
Just and Right — Texas division standard; not automatic 50/50.²
Seed Phrase — Words to recover a wallet; protect them.
Separate Property — Pre‑marital, gift, or inheritance; must be traced.¹
VWAP — Volume‑weighted average price.
Timeline — How a Texas Divorce Handles Crypto
- Intake & Hold — Identify wallets and exchanges; request orders to stop transfers.²
- Initial Disclosures (Rule 194) — Exchange records early.⁴
- Discovery & Subpoenas — Get exchange, bank, and on‑chain data.⁴
- Valuation Plan — Pick a date/method; record snapshots.⁶
- Settlement Track — Choose in‑kind, offset, or sell‑and‑split; write clear steps.
- Trial (if needed) — Present classification, valuation, and tax proof; court enters orders.² ⁸
- Post‑Decree — Complete transfers, rotate keys, track basis for taxes.⁵ ⁷
Legal Authorities (Endnotes)
- Texas Family Code, Chapter 3 (Marital Property Rights & Liabilities) — Texas Legislature Online.
- Texas Family Code, Chapter 7 (Award of Marital Property) — Texas Legislature Online.
- Texas Family Code, Chapter 4 (Premarital & Marital Property Agreements) — Texas Legislature Online.
- Texas Rules of Civil Procedure (Aug. 31, 2025) — Rules 176 & 194.
- IRS Notice 2014‑21 — Virtual Currency Treated as Property.
- Rev. Rul. 2019‑24 — Hard Forks & Airdrops.
- IRS Digital Assets Page — includes the Form 1040 digital‑asset question.
- Murff v. Murff, 615 S.W.2d 696 (Tex. 1981).
- Texas Business & Commerce Code, Chapter 12 (Virtual Currency; Control) — Texas UCC.
- IRS Form 1099‑DA — Digital‑Asset Broker Reporting (effective for 2025 transactions).
Need Help Dividing Cryptocurrency Fairly?
Cryptocurrency in Texas divorce blends law and tech. We know both. Whether you need to find hidden coins, prove separate property, or write clear transfer steps, we can help.
Call Warren & Migliaccio, L.L.P. at (888) 584‑9614 for a free consultation.
We serve families in Richardson, Dallas, Plano, Garland, and across Dallas and Collin counties.
This article is general information, not legal or tax advice. Reading it does not create an attorney‑client relationship. Past results do not guarantee future outcomes. Attorney advertising.
