Modern and Unusual Assets in Divorce: IAFL Recap

A few years ago, “property division” usually meant the house, the retirement accounts, and maybe a business if you were lucky. Now picture this instead.

A founder is separating right as their company is preparing to go public. Their compensation is not a paycheck. It is restricted stock units, options, and a grant schedule that keeps moving.

At the same time, a chunk of the family’s savings sits in cryptocurrency, some on an exchange, some in a cold wallet, and some that is not showing up anywhere in the bank records.

Add streaming or royalty income that arrives from multiple platforms, across borders, under contracts that were never meant to be public.

That is modern family law.

In February 2026, the International Academy of Family Lawyers (IAFL) European Chapter met in Barcelona to tackle exactly these issues. 

Our managing partner, Alphonse Provinziano (Los Angeles), joined William Tyzack (London) and Marie von Maydell (Bonn) on a comparative panel looking at how England and Wales, Germany, and California deal with modern and unusual assets on divorce, including crypto, tech equity, private equity structures, and artistic or digital income streams.

At Provinziano & Associates, we were honored to have Alphonse represent California on this panel, sharing the California perspective and showing how a community property system can handle assets that simply did not exist when many of our rules were written.

According to the IAFL European Chapter meeting in Barcelona in February 2026, family lawyers are running into the same problem in case after case: the wealth is modern, but many rules were written for a very different era.

Once the discussion began, it became clear that this is not a “niche” topic anymore. These assets show up in ordinary divorces, high-asset divorces, international divorces, and everything in between.

What This Session Covered

The panel was structured so that each jurisdiction “led” on a topic, and then the others compared how their courts would approach the same problem:​

• Crypto assets – led by Marie von Maydell (Germany)
• Shareholdings and tech equity (including RSUs) – led by Alphonse Provinziano (California)
• Carried interest and royalties – led by William Tyzack (England)

Each speaker then “jumped in” on the other topics so the audience could see where the systems line up and where they diverge.

The discussion used fact patterns that many family lawyers now recognize: a startup founder whose equity is mostly unvested, a spouse holding crypto partly on regulated exchanges and partly in self‑custody wallets, and a creative or performer receiving streaming revenue and royalties from a web of platforms and collecting societies across several countries.

The Session Theme: Old Rules, New Wealth

One of the clearest takeaways was that modern wealth is forcing courts to answer new versions of old questions:

• What is “property” if it lives at a wallet address instead of a bank?
• What is “income” if it is a royalty stream that might pay out for decades?
• What is “fair” if the value of an asset can swing 15 percent in a weekend?

When a divorce involves modern assets, most legal fights come down to three core questions:​

• Finding the asset – disclosure and tracing: where is it, and can we prove it exists?
• Valuing the asset – timing, market volatility, and which valuation method to use.
• Enforcing against the asset – can a court order be carried out in practice, especially across borders?

Those are also the areas where differences between England, Germany, and California show up most clearly, and where good planning and strategy can change the outcome.

Why This Matters For International Families

Across England, Germany, and California, modern assets like crypto, tech equity, and royalties are all treated as property that can be taken into account in divorce.

The bigger differences are in how each system decides what is shareable and how much each spouse gets.

California came up again and again in the discussion for several reasons:​

• It is a community property jurisdiction, so most wealth earned during the marriage is presumed to belong equally to both spouses.
• It has an unusually high concentration of founders, executives, artists, and investors whose compensation is tied to complex assets instead of simple salaries.
• Many modern assets have a California or U.S. “nexus” – for example, big tech companies, entertainment studios, venture capital funds, and major crypto platforms.

For international practitioners, one practical point was that a California connection can unlock powerful U.S. discovery tools. Many major crypto exchanges (such as Coinbase and others) are regulated and must comply with lawful subpoenas and court orders. 

In some situations, parties in foreign family cases can ask a U.S. court for help obtaining documents or testimony for use abroad, using federal procedures and international evidence conventions.

In plain terms, if there is a U.S. touchpoint, it may be possible to trace and prove assets that might otherwise stay hidden.

How Property Is Divided in England, Germany, and California

England And Wales

England does not use a fixed formula. Instead, the court looks at all the assets and income in one overall “pot” and decides what is fair under the Matrimonial Causes Act 1973, especially section 25. The judge considers:​

• Each spouse’s needs and financial resources
• Their ages, health, and earning capacity
• Contributions to the family, both financial and non‑financial
• The standard of living during the relationship and any special factors

In a long marriage, the yardstick is often close to an equal share, but the court can move away from 50/50 where one spouse’s needs, contributions, or other factors justify that. 

Unusual or complex assets like stock options, carried interest, or royalties are folded into this overall assessment. The court can then use tools such as lump sum payments, transfers of property, and staged payments to reach a fair result.

For assets that are hard to divide – like a private business, unvested equity, or long‑running royalties – English courts often leave the asset with the spouse who holds it and award the other spouse cash or other property to compensate them.

In some cases, the court will tie payments to future events, such as a business sale or fund payout, so that both spouses share in value that has not yet been realised.

Germany

Germany uses an “accrued gains” system (Zugewinngemeinschaft). By default, each spouse owns what is in their own name during the marriage. When the marital property regime ends, the court:​

1. Looks at what each spouse owned at the start of the marriage.
2. Looks at what each spouse owns at the end of the marital property regime (usually when the divorce case starts).
3. Calculates each spouse’s gain by subtracting their starting value from their end value.
4. If one spouse’s gain is higher, that spouse may owe the other half of the difference as a cash payment.

Modern assets like crypto, vested tech equity, or intellectual property rights are included in the end‑value if they actually exist on the end date. Unvested or very uncertain rights may be treated more like future income or opportunity than present property.

German law does give each spouse the right to ask the other for detailed information about assets, but family courts usually do not go directly to banks or regulators for records in the way U.S. courts do. Where there is suspected fraud or crime, that kind of deeper investigation is often left to criminal authorities.

California

California uses a community property system. By default, anything earned or acquired by either spouse from the date of marriage to the date of separation is presumed to be community property under Family Code section 760. That includes salary, bonuses, crypto bought with marital earnings, stock granted during the marriage, and royalties on work created during the marriage.​

Assets acquired before marriage, after separation, by inheritance, or by gift are generally separate property and belong to that spouse alone, as long as the separate source can be traced. At divorce, the court will usually divide the community estate equally under Family Code section 2550.​

California also imposes strong fiduciary duties between spouses. If one spouse hides, wastes, or transfers community assets without consent, the court can impose sharp remedies – including, in serious cases, awarding up to 100 percent of the concealed asset to the other spouse and ordering the breaching spouse to pay attorney’s fees and sanctions.

An interesting historical point raised on the panel is that California’s system is a hybrid. It uses a Spanish‑style community property regime, preserved when California moved from Mexican to U.S. control under the Treaty of Guadalupe Hidalgo, but those rules are interpreted by courts using English‑style common law reasoning.

In practice, that means both statutes and case law play a big role in how modern assets are divided.

Cryptocurrency: Easy to Buy, Harder to Divide

Bitcoin, Ethereum, and similar digital assets have grown tremendously in value over the last decade. It was noted that Bitcoin went from under US$1,000 in 2013 to around US$70,000 in 2024 and over US$110,000 in 2025. That kind of increase can turn a small investment into a major property division issue.

Crypto also presents unique discovery problems. Coins held on a regulated exchange will often leave a trace in bank statements and account records. Coins held in a self‑custody or “cold” wallet may not show up anywhere obvious. Courts cannot divide what cannot be proven to exist, so financial disclosure and tracing are critical in these cases.

Across California, England, and Germany, courts now treat cryptocurrency as property that can be included in divorce financial settlements. If it was acquired during the marriage, some or all of it will usually be in play when assets are divided.

England

In England, the High Court has confirmed that bitcoin is “property” that can be controlled, traced, and even frozen. Where one spouse holds crypto on an exchange, the court can order that third party – for example, a centralised exchange – to disclose account information and transaction history.

Courts can also draw adverse inferences or “add back” value if they are satisfied that crypto has been hidden, moved, or deliberately made inaccessible.​

If a spouse claims they have “lost” private keys, the court will test that claim against the evidence, including bank statements, transaction histories, and, in appropriate cases, expert or forensic examination of devices and documents.

The court’s orders are made against the person, not the asset, which means that a spouse who controls a wallet or account can be compelled to act and punished if they refuse.

Germany

Germany treats crypto as a normal type of property in the accrued gains system. It is generally treated as capital. The key question is: how much did the value of that spouse’s property (including any crypto) increase between the start and end of the marital property regime? The gain, not the full holding, is what may be shared.​

The biggest challenge is self‑custody wallets and seed phrases, which are hard to detect or enforce against. German courts can order a spouse to disclose their assets, and can impose penalty payments or coercive detention for refusal, but they usually do not go directly to exchanges or regulators for data in family proceedings. Enforcement often ends up as a money judgment, rather than a forced transfer of the coins themselves.

California

In California, crypto bought with earnings during the marriage and before separation is usually presumed to be community property. A spouse who says some or all of the coins are separate property has to prove that, usually by tracing back to premarital, post‑separation, or inherited funds.​

California courts can use a wide range of tools to uncover and deal with crypto, including:​

• Detailed financial disclosures and document production
• Subpoenas to U.S.‑based exchanges and financial institutions
• Forensic accounting and expert appointments
• Discovery of electronic devices and digital records, where appropriate

If a spouse deliberately hides or moves crypto in breach of their duties, courts can respond with contempt proceedings, financial sanctions, and fiduciary duty remedies – including awarding 100 percent of the concealed asset to the other spouse in extreme cases.

Tech Equity: Options, Restricted Stock Units, and Divorce Timing

For many couples, especially where one spouse works in tech, finance, or a startup, the most valuable assets are not in a savings account. They are in equity compensation: stock options, restricted stock units (RSUs), and sometimes pre‑IPO shares or founder stock.

On paper, these can look complex or even worthless, yet they may become the largest asset in the case if the company grows or goes public.​

Courts have to decide which parts of these awards belong to the marriage, which parts are tied to future work, and how to divide something that may not be fully vested or easily sold.

All three jurisdictions treat equity as property that can be taken into account, but they use different methods to split the marital part from the non‑marital part.

England

In England, the court looks at fairness under the usual Matrimonial Causes Act principles. Judges pay close attention to:​

• When the shares or options were granted
• Why they were granted (reward for past work vs. incentive for future work)
• How and when they vest
• What can realistically be transferred or sold

Even unvested or restricted awards can be relevant if they were earned during the marriage. Where direct transfer is not possible or would damage the business, the court may instead give the non‑holding spouse a larger share of other assets or order staged payments linked to future events, such as vesting or a sale. 

The focus is on separating what was built during the marriage from what clearly relates to future work.

Germany

In Germany, vested and real equity rights that exist at the legally defined end date are counted and valued as part of that spouse’s property in the gains calculation. Unvested or highly conditional awards are usually treated more like future income or chance, and may not be fully included in the gains that are shared.​

Where an award is unvested but non‑discretionary – for example, it will vest automatically if employment continues – German courts may treat it as having a present value, depending on the likelihood of vesting.

That value can then form part of the accrued gains. Equity that has the character of a pension may instead be equalised through Germany’s separate pension‑sharing scheme.

California

In California, courts often use time‑based formulas to decide how much of an equity award is community property. Two leading cases illustrate the approach:​

• Hug‑type analysis: when an award mainly rewards past service, the court looks at the time from when employment started to when the equity vests, and asks what portion of that period falls during the marriage. That portion is treated as community.
• Nelson‑type analysis: when an award is mainly to keep the employee in the future, the court looks at the time from the grant date to the vesting date, and again asks what part of that time was during the marriage.

Judges have the flexibility to choose the formula that best matches why the equity was granted. In addition, once RSUs or options vest and are sold, the proceeds can be treated not only as property, but also as income when calculating child and spousal support, especially where equity is a regular part of ongoing compensation.

Related: Divorce During an IPO: Protect Your Stocks, Startup & Equity

Private Equity and Carried Interest

Private equity interests and carried interest often show up in higher‑asset divorces. In simple terms, carried interest is a share of the profits that fund managers receive if investments perform well. 

It has features of both a bonus and an investment return, which makes it hard to classify and divide. All three jurisdictions treat carried interest and similar fund interests as assets that can be relevant in divorce, but again, they draw the lines differently.

England

In England, courts see carried interest as a hybrid resource. Key cases discussed on the panel highlight two points:​

• The court will try to identify the part of the carry that is linked to the marriage (capital created or risks taken during the relationship) and separate it from the part linked to future work.
• Off‑the‑shelf formulas can be a useful starting point but are not the end of the story. Judges are encouraged to look at the actual fund documents, timing, and contributions, and to use broad fairness to reach an outcome that reflects where the value really came from.

Where direct division is impractical, English courts often use lump sums or staged payments, sometimes tied to future fund distributions.

Germany

In Germany, if a private equity or carried interest is vested or “economically vested” before the valuation date, it is usually treated as capital and included in the accrued gains. If it is only a distant possibility with no current entitlement, its value must often be determined by an expert and may be low or even treated as too uncertain to include.​

Profit distributions themselves can be treated as income if they are used to cover living expenses, or as capital if they are accumulated. The law does not allow the same profit to be counted twice – once as income and again as capital.

California

In California, carried interest tied to a spouse’s work in private equity, venture capital, or hedge funds is typically analyzed as a form of employment‑related deferred compensation. It is community property to the extent it was earned by efforts during the marriage, and separate property to the extent it is attributable to work before marriage or after separation.​

Because carried interest is often contingent, illiquid, and highly speculative, courts usually do not split the interest itself. Instead, they rely on expert valuation and apportionment, similar to the approach with RSUs and options, and then use equalisation payments or structured payouts so that each spouse receives their share of the marital portion.

Royalties, Streaming Revenue, and Intellectual Property

Royalties and streaming income can form a major part of a person’s financial life. They can come from music, film, books, software, online content, or branding. Underlying intellectual property rights, like copyrights or patents, can also have independent value.

Across California, England, and Germany, both the rights and the income they produce can be treated as property in a divorce and included in the financial settlement. The main legal task is to decide what portion is truly marital and how to value it.

England

English courts can treat royalty streams as assets with a capital value, not just as income. In a leading case involving a musician, the court heard expert evidence, placed a capital value on several royalty streams (such as publishing and recording royalties), and divided that value between the spouses, while treating touring income as future earnings rather than shareable capital.​

The focus, again, is on what part of the income and underlying rights relates to the marriage and how to share that fairly, sometimes by lump sums and sometimes by sharing future receipts for a defined period.

Germany

In Germany, royalties and intellectual property rights enter the picture in two ways:

• As capital: rights and receivables that exist at the end of the marital property regime are valued and included in each spouse’s property for the accrued gains calculation.
• As income: regular royalty and streaming payments after that date affect each spouse’s ability to support themselves and can be taken into account when setting maintenance (spousal support).

This allows the court to separate the value built up during the marriage from the income that will support each spouse going forward.

California

In California, royalties and intellectual property created during the marriage are usually community property and can be divided. Key questions include when the work was created, when the rights were acquired, and how the stream of payments is structured. 

The law distinguishes between true property (like a copyright or patent) and pure personal reputation, which is generally not divisible.​

Courts can either:​

• Award each spouse a percentage share of future royalties and licence fees, or
• Place a present value on the expected stream of payments and order a buy‑out so one spouse keeps the rights, and the other receives other assets or cash instead.

In practice, enforcement often means working out where the money actually comes from – for example, which platforms, labels, publishers, or collection societies – and then directing orders to those payors. This can involve cooperation with entertainment law specialists and specialised databases to track the revenue.

How to Think About Modern Assets in Divorce

Modern assets have changed what “property division” looks like, but they have not changed the core questions: what exists, what it is worth, and how a court can fairly and realistically divide or enforce against it. 

For international families whose wealth touches England, Germany, and California, the Barcelona IAFL session confirmed that while each system uses different tools and formulas, all three are now willing to treat crypto, tech equity, carried interest, and royalties as real property that must be disclosed, valued, and shared – and that careful planning, early tracing, and specialist advice can make the difference between an opaque fight and a workable outcome.

Need a Complex Property Division Attorney in Los Angeles?

If your divorce involves more than a house and a few bank accounts, you need more than a basic divorce lawyer. You need a team that understands complex assets and how to protect them.

At Provinziano & Associates, we focus on complex property division in Los Angeles, handling both domestic and international cases.

We regularly work with cryptocurrency, stock options and RSUs, private equity and carried interest, royalties and streaming income, trusts, and business interests. We know these assets live in cap tables, fund documents, and platform records, not just in simple statements.

When a case calls for it, we bring in the right professionals, including forensic accountants, valuation experts, international counsel, and digital forensics specialists. Together, we help you uncover, value, and divide complex financial structures in a way that is legally sound and strategically smart.

Schedule a free case evaluation when you are ready.