We Will Guide you

We will guide you step-by-step
through this difficult process.

Free Initial Consultation (866) 290-9292
blog home Divorce How NFTs Are Handled in a Pennsylvania Divorce

How NFTs Are Handled in a Pennsylvania Divorce

By Sheryl Rentz on November 2, 2021

A painting hanging in a gallery.

What Is an NFT?

NFT stands for Non-Fungible Token. This is a unique digital asset that only one person has ownership rights to. An NFT is usually either a physical image such as a graphic or a photo, or a short audio or video clip. NFTs are often created by a famous artist or recording star. Although the images or sounds in an NFT can be reproduced, when you buy an NFT, you get exclusive rights to the original digital asset, which cannot be reproduced thanks to blockchain technology.

It may sound unusual to buy something that only exists in digital form, but a lot of money is being spent on NFTs. For example, someone recently paid $6.6 million for an NFT video, and a work of NFT graphic art has been auctioned at Christie’s. Just like any other type of artwork, NFTs are assets that must be accounted for during property division in divorce proceedings.

A Risky Asset with an Uncertain Future

NFTs are a new concept based on a new type of technology, which is a highly volatile combination. While it is very unlikely that anyone will ever be able to counterfeit an NFT, they frequently consist of images that are already viewable, either in a museum or online. That means the purchaser is merely buying the right to say, “I own the official digital copy of this particular thing.”

Although NFTs are all the rage now, they are easy to produce and there’s no reason to believe they will continue to rise in value. Like the famed Dutch Tulip Mania of the 17th century and so many other investment booms over the years, there’s a definite possibility that the bottom could fall out of the NFT market at any time.

Rules for Digital Asset Division During a Divorce

When they say an NFT is “non-fungible,” that means it can’t be replaced by something of a similar nature. For example, a barrel of oil, an ounce of gold, or a $100 bill can all be replaced or even split up. Someone can give you five $20 bills in exchange for a $100 bill, and you could both be certain you were getting a fair exchange.

As with any work of art, splitting up an NFT is impossible. That means, when it comes time to determine who will get the NFT in a divorce settlement, selling it and splitting the proceeds is often the simplest and most equitable solution. Another alternative is to determine a monetary value for the NFT that both parties can agree on and then exchanging it for assets of equal value. This can be very tricky, however, as the value of an NFT can change dramatically between a couple’s separation date and the eventual day when the assets are divided.

Dividing Your NFTs and other Complex Assets

NFTs are one of the newest items to account for in division of marital assets, but they are far from the only thing that can make equitable distribution difficult. Complex questions require the assistance of an experienced divorce attorney. Founded in 1992, the Law Offices of Sheryl R. Rentz, P.C., has tackled many complicated cases and can help walk you step by step through the legal process of divorce. Call (866) 290-9292 to learn more.

Related Articles:

Posted in: Divorce

We know your problems are unique & special.
Call us, we will listen.

Contact Us

Our team is ready to help. Start off your case with a no-cost consultation by calling our office today at (866) 290-9292 or by completing the following form.

Phone (optional):

Law Office of Sheryl L. Rentz

326 W Lancaster Ave, Suite 100
Ardmore, Pennsylvania 19003

Phone: (610) 645-0100
Toll-free: (866) 290-9292
Fax: (610) 645-0111

Phone (optional):

Montgomery County Divorce Attorney Disclaimer: The divorce, visitation, child support, child custody, spousal support, or other family law legal information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer or attorney client relationship. Any results set forth here were dependent on the facts of that case and the results will differ from case to case. Please contact an attorney at our law firm office. This web site is not intended to solicit clients for matters outside of the State of Pennsylvania.

© 2022 Law Offices of Sheryl R. Rentz. Serving Chester County, Montgomery County, & all counties in Pennsylvania.

Website Design, SEO and Legal Internet Marketing by: SLS Consulting


Read Our Important Announcement About COVID-19

Dear valued clients, we are opening Monday, June 8th, but everyone must wear masks. For the safety of the community, we continue to encourage meetings either over the phone or by Zoom.

Schedule My Consultation