In high-asset divorces, determining how to handle intellectual property (IP) can be complex. Couples facing a divorce must navigate the challenges of valuing and dividing IP assets. These assets include patents, trademarks, copyrights, or even trade secrets, all of which hold significant value.
Understanding this process can help you know what will happen during the division.
Valuing intellectual property in divorce
The first step in dividing IP during a divorce involves establishing its value. Courts often treat intellectual property as marital property if created or acquired during the marriage. Expert appraisers determine the fair market value of IP assets, which can fluctuate based on potential income, licensing agreements, and other factors. Establishing an accurate value ensures a fair division between both parties.
Classification of intellectual property
Illinois law requires the classification of property as either marital or non-marital. Intellectual property created before the marriage or explicitly outlined as separate property may be classified as non-marital and not subject to division.
However, if the other spouse enhanced, further developed, or contributed to the IP during the marriage, it may be considered marital property. This classification plays a key role in deciding what portion of the IP each spouse receives.
Dividing intellectual property assets
After establishing the value of the IP, the next challenge is dividing it. Illinois follows equitable distribution, meaning courts divide assets fairly, though not necessarily equally. Courts consider factors like each spouse’s contribution to the marriage and future financial needs. In some cases, one spouse may retain ownership of the IP while the other receives compensatory assets to balance the division.
Understanding your rights
Handling intellectual property in divorce requires careful consideration and expertise. Valuing and dividing these unique assets demand an in-depth understanding of Illinois law and a strategic approach to protect both parties’ interests.