How do you divide intellectual property evenly in divorce?

On Behalf of | Dec 23, 2021 | Property Division |

Property division in Texas, as a community property state, aims to split all marital assets between spouses as evenly as possible. This is easier with tangible or countable assets. Courts have the power to cut a bank account with $50,000 in it in half. While it does nobody any good to cut a car in half, the courts may add its value to one spouse’s cut and make sure the other gets an equivalent amount.

You need to know the value of the car or house in order to do that. It is the same with intangible assets like novels, song rights and inventions. But evaluating how much an idea may be worth is trickier than looking up a vehicle’s blue book value.

Examples of intellectual property

While the term intellectual property might make you think of big companies, anyone has the ability to create ideas of value. Paint on a canvas counts as protected art, just like a novel saved on a hard drive. Your marital IP asset might just be a registered brand logo.

Ways to value intellectual property

According to the World Intellectual Property Organization, an IP’s value comes from its exclusivity — or the ability for the artist to exclude competitors from using it. Evaluators may look at money the IP already generates with the income method. If there is no financial paper trail like that, evaluators look at similar IPs with the market method. They may also consider the costs to recreate a similar IP using the cost method.

It is important for you to make sure that any and all marital assets, including art and ideas, have the correct values assigned to them. That way you complete your divorce with as equal a cut as possible from what you two built together.