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Dealing With Intangible Assets In Divorce: Intellectual Property

Dealing with property division in divorce is a complicated process. Some parts can be relatively straightforward ”“ tangible assets like bank accounts and property, for example. But what about intangible assets, things that are difficult to value? For couples who own intellectual property, such as patents and trademarks, an equitable division can be incredibly complex. How do you figure out the value of an idea?

The vast majority of divorcing couples will probably not have to worry about intellectual property in divorce, but for authors, musicians, actors, artists, business owners and startup founders, etc., serious consideration must be given to the value of trademarks, patents and copyrights.

Who Owns A Patent, & How Is It Split In Divorce?

Generally, someone with an interest in an intellectual property has two choices in divorce. The first of those is to have the value of the assets appraised to determine if the assets are subject to valuation. While this can be expensive, it can help the IP holder fight for a final division of the property, eliminating any potential entanglements involving the ex-spouse in the future.

The second option is for the couple to come to an agreement on a proportional split of some type of the proceeds from the intellectual property holdings. For example, the property holder could offer a percentage of the royalties to the spouse on a continuing basis. Depending on the relationship between the two, however, these sorts of entanglements may be undesirable, or there may be problems determining exactly how much of the future royalties should go to the other spouse.

At any rate, intellectual property is very complex and you should discuss any reservations with your financial advisors, IP experts and your family law attorney to scope out the best path moving forward.