High-asset divorces often involve complex property division issues, including the division of intellectual property (IP). Intellectual property, such as patents, trademarks, copyrights, and royalties, is often a valuable asset.
Understanding how these intangible assets are divided is crucial to ensuring a fair settlement.
Valuing intellectual property
The first step in dividing IP is determining its value. An expert, such as a forensic accountant or intellectual property appraiser, will evaluate the current worth and potential future earnings. Unlike physical assets, the value of IP can fluctuate, making it essential to assess not only its present value but also future earning potential.
Distinguishing marital vs. separate property
In Michigan divorces, intellectual property may be either marital or separate property. If the IP was created or acquired during the marriage, it is generally considered marital property and subject to division. However, if one spouse owned the IP before the marriage, it might be separate property, though any increase in value during the marriage could still be subject to division.
Dividing future royalties and income
One of the most challenging aspects of dividing IP is the distribution of future income, such as royalties or licensing fees. Courts may award a percentage of future earnings to the non-creator spouse or adjust other aspects of the property division to account for the future value of the IP.
Protecting intellectual property rights
It’s important for both spouses to protect their intellectual property rights during a divorce. This might involve creating a detailed settlement agreement outlining who retains control over the IP and how to resolve any future disputes.
By addressing these complexities early on, both parties can ensure a fair and equitable division of intellectual property assets in a high-asset divorce.
