diff --git a/lib/model/addressmanager.js b/lib/model/addressmanager.js
index 058b7fb..ca1740b 100644
--- a/lib/model/addressmanager.js
+++ b/lib/model/addressmanager.js
@@ -1,4 +1,10 @@
 var _ = require('lodash');
+var $ = require('preconditions').singleton();
+
+var STRATEGIES = {
+  BIP44: 'BIP44',
+  BIP45: 'BIP45',
+};
 
 var SHARED_INDEX = 0x80000000 - 1;
 
@@ -9,7 +15,10 @@ AddressManager.create = function(opts) {
 
   var x = new AddressManager();
 
-  x.version = '1.0.0';
+  x.version = 2;
+  x.derivationStrategy = opts.derivationStrategy || STRATEGIES.BIP44;
+  $.checkState(_.contains(_.values(STRATEGIES), x.derivationStrategy));
+
   x.receiveAddressIndex = 0;
   x.changeAddressIndex = 0;
   x.copayerIndex = (opts && _.isNumber(opts.copayerIndex)) ? opts.copayerIndex : SHARED_INDEX;
@@ -17,11 +26,11 @@ AddressManager.create = function(opts) {
   return x;
 };
 
-
 AddressManager.fromObj = function(obj) {
   var x = new AddressManager();
 
   x.version = obj.version;
+  x.derivationStrategy = obj.derivationStrategy || STRATEGIES.BIP45;
   x.receiveAddressIndex = obj.receiveAddressIndex;
   x.changeAddressIndex = obj.changeAddressIndex;
   x.copayerIndex = obj.copayerIndex;
@@ -29,6 +38,10 @@ AddressManager.fromObj = function(obj) {
   return x;
 };
 
+AddressManager.prototype.supportsDerivation = function() {
+  // BIP44 does not support copayer specific indexes
+  return !(this.derivationStrategy == STRATEGIES.BIP44 && this.copayerIndex != SHARED_INDEX);
+};
 
 AddressManager.prototype._incrementIndex = function(isChange) {
   if (isChange) {
@@ -49,7 +62,7 @@ AddressManager.prototype.rewindIndex = function(isChange, n) {
 
 AddressManager.prototype.getCurrentAddressPath = function(isChange) {
   return 'm/' +
-    this.copayerIndex + '/' +
+    (this.derivationStrategy == STRATEGIES.BIP45 ? this.copayerIndex + '/' : '') +
     (isChange ? 1 : 0) + '/' +
     (isChange ? this.changeAddressIndex : this.receiveAddressIndex);
 };
diff --git a/test/models/addressmanager.js b/test/models/addressmanager.js
index eea0286..3e34733 100644
--- a/test/models/addressmanager.js
+++ b/test/models/addressmanager.js
@@ -8,53 +8,137 @@ var AddressManager = require('../../lib/model/addressmanager');
 
 
 describe('AddressManager', function() {
-  describe('#getCurrentAddressPath', function() {
-    it('should return a valid BIP32 path for given index', function() {
-      var am = AddressManager.create({
-        copayerIndex: 4
-      });
-      am.getCurrentAddressPath(false).should.equal('m/4/0/0');
-      am.getCurrentAddressPath(true).should.equal('m/4/1/0');
+  describe('#create', function() {
+    it('should create BIP44 address manager by default', function() {
+      var am = AddressManager.create();
+      am.derivationStrategy.should.equal('BIP44');
     });
   });
-  describe('#getCurrentAddressPath', function() {
+  describe('#fromObj', function() {
+    it('should assume legacy address manager uses BIP45', function() {
+      var obj = {
+        version: '1.0.0',
+        receiveAddressIndex: 2,
+        changeAddressIndex: 0,
+        copayerIndex: 4
+      };
+      var am = AddressManager.fromObj(obj);
+      am.derivationStrategy.should.equal('BIP45');
+      am.getCurrentAddressPath(false).should.equal('m/4/0/2');
+    });
+  });
+  describe('BIP45', function() {
+    describe('#getCurrentAddressPath', function() {
+      it('should return a valid BIP32 path for given index', function() {
+        var am = AddressManager.create({
+          derivationStrategy: 'BIP45',
+          copayerIndex: 4,
+        });
+        am.supportsDerivation().should.be.true;
+        am.getCurrentAddressPath(false).should.equal('m/4/0/0');
+        am.getCurrentAddressPath(true).should.equal('m/4/1/0');
+      });
+    });
     it('should return a valid BIP32 path for defaut Index', function() {
-      var am = AddressManager.create();
+      var am = AddressManager.create({
+        derivationStrategy: 'BIP45',
+      });
+      am.supportsDerivation().should.be.true;
       am.getCurrentAddressPath(false).should.equal('m/2147483647/0/0');
       am.getCurrentAddressPath(true).should.equal('m/2147483647/1/0');
     });
-  });
-  describe('#getNewAddressPath', function() {
-    it('should return a new valid BIP32 path for given index', function() {
-      var am = AddressManager.create({
-        copayerIndex: 2
+    describe('#getNewAddressPath', function() {
+      it('should return a new valid BIP32 path for given index', function() {
+        var am = AddressManager.create({
+          derivationStrategy: 'BIP45',
+          copayerIndex: 2,
+        });
+        am.getNewAddressPath(false).should.equal('m/2/0/0');
+        am.getNewAddressPath(true).should.equal('m/2/1/0');
+        am.getNewAddressPath(false).should.equal('m/2/0/1');
+        am.getNewAddressPath(true).should.equal('m/2/1/1');
+      });
+    });
+    describe('#rewindIndex', function() {
+      it('should rewind main index', function() {
+        var am = AddressManager.create({
+          derivationStrategy: 'BIP45',
+        });
+        am.getNewAddressPath(false).should.equal('m/2147483647/0/0');
+        am.getNewAddressPath(false).should.equal('m/2147483647/0/1');
+        am.getNewAddressPath(false).should.equal('m/2147483647/0/2');
+        am.rewindIndex(false, 2);
+        am.getNewAddressPath(false).should.equal('m/2147483647/0/1');
+      });
+      it('should rewind change index', function() {
+        var am = AddressManager.create({
+          derivationStrategy: 'BIP45',
+        });
+        am.getNewAddressPath(true).should.equal('m/2147483647/1/0');
+        am.rewindIndex(false, 1);
+        am.getNewAddressPath(true).should.equal('m/2147483647/1/1');
+        am.rewindIndex(true, 2);
+        am.getNewAddressPath(true).should.equal('m/2147483647/1/0');
+      });
+      it('should stop at 0', function() {
+        var am = AddressManager.create({
+          derivationStrategy: 'BIP45',
+        });
+        am.getNewAddressPath(false).should.equal('m/2147483647/0/0');
+        am.rewindIndex(false, 20);
+        am.getNewAddressPath(false).should.equal('m/2147483647/0/0');
       });
-      am.getNewAddressPath(false).should.equal('m/2/0/0');
-      am.getNewAddressPath(true).should.equal('m/2/1/0');
     });
   });
-  describe('#rewindIndex', function() {
-    it('should rewind main index', function() {
-      var am = AddressManager.create({});
-      am.getNewAddressPath(false).should.equal('m/2147483647/0/0');
-      am.getNewAddressPath(false).should.equal('m/2147483647/0/1');
-      am.getNewAddressPath(false).should.equal('m/2147483647/0/2');
-      am.rewindIndex(false, 2);
-      am.getNewAddressPath(false).should.equal('m/2147483647/0/1');
+  describe('BIP44', function() {
+    describe('#getCurrentAddressPath', function() {
+      it('should return first address path', function() {
+        var am = AddressManager.create();
+        am.supportsDerivation().should.be.true;
+        am.getCurrentAddressPath(false).should.equal('m/0/0');
+        am.getCurrentAddressPath(true).should.equal('m/1/0');
+      });
+      it('should return address path independently of copayerIndex', function() {
+        var am = AddressManager.create({
+          copayerIndex: 4,
+        });
+        am.supportsDerivation().should.be.false;
+        am.getCurrentAddressPath(false).should.equal('m/0/0');
+        am.getCurrentAddressPath(true).should.equal('m/1/0');
+      });
     });
-    it('should rewind change index', function() {
-      var am = AddressManager.create({});
-      am.getNewAddressPath(true).should.equal('m/2147483647/1/0');
-      am.rewindIndex(false, 1);
-      am.getNewAddressPath(true).should.equal('m/2147483647/1/1');
-      am.rewindIndex(true, 2);
-      am.getNewAddressPath(true).should.equal('m/2147483647/1/0');
+    describe('#getNewAddressPath', function() {
+      it('should return a new path', function() {
+        var am = AddressManager.create();
+        am.getNewAddressPath(false).should.equal('m/0/0');
+        am.getNewAddressPath(true).should.equal('m/1/0');
+        am.getNewAddressPath(false).should.equal('m/0/1');
+        am.getNewAddressPath(true).should.equal('m/1/1');
+      });
     });
-    it('should stop at 0', function() {
-      var am = AddressManager.create({});
-      am.getNewAddressPath(false).should.equal('m/2147483647/0/0');
-      am.rewindIndex(false, 20);
-      am.getNewAddressPath(false).should.equal('m/2147483647/0/0');
+    describe('#rewindIndex', function() {
+      it('should rewind main index', function() {
+        var am = AddressManager.create();
+        am.getNewAddressPath(false).should.equal('m/0/0');
+        am.getNewAddressPath(false).should.equal('m/0/1');
+        am.getNewAddressPath(false).should.equal('m/0/2');
+        am.rewindIndex(false, 2);
+        am.getNewAddressPath(false).should.equal('m/0/1');
+      });
+      it('should rewind change index', function() {
+        var am = AddressManager.create();
+        am.getNewAddressPath(true).should.equal('m/1/0');
+        am.rewindIndex(false, 1);
+        am.getNewAddressPath(true).should.equal('m/1/1');
+        am.rewindIndex(true, 2);
+        am.getNewAddressPath(true).should.equal('m/1/0');
+      });
+      it('should stop at 0', function() {
+        var am = AddressManager.create();
+        am.getNewAddressPath(false).should.equal('m/0/0');
+        am.rewindIndex(false, 20);
+        am.getNewAddressPath(false).should.equal('m/0/0');
+      });
     });
   });
 });