How is intellectual property handled?

In a Texas divorce, you must divide more than just physical items like homes and vehicles. Intellectual property—such as patents, copyrights, trademarks, and business ideas—often holds significant value. When you understand how these assets work in property division, you protect your financial future.

Understanding intellectual property in divorce

Intellectual property (IP) includes creations you or your spouse developed or made more valuable during the marriage. These can include written works, software, brand names, and designs. Texas law treats IP created or improved during the marriage as community property. You and your spouse may each receive a share of that property during the division process.

Valuing intellectual property fairly

You must first determine the value of IP before dividing it. Financial professionals who are knowledgeable in IP valuation often help with this step. They examine current earnings, future revenue potential, and market demand. For example, a product patent may not bring in income now but could earn money later. A reliable valuation lets both spouses receive a fair share of the asset’s worth.

Dividing ownership or future profits

After assigning a value, you can divide IP in different ways. One spouse might take full ownership, and the other might receive property or money with equal value. You could also agree to share future income the IP produces. This option often applies to royalties, licenses, or business profits. Written agreements help both parties stick to the terms and avoid later problems.

Treat intellectual property like any other major asset in your divorce. Focus on both its current value and long-term potential. With a clear understanding and a solid division plan, you can protect your financial interests and move forward with greater confidence.