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3 methods of valuing your IP in divorce

On Behalf of | Feb 9, 2023 | Family Law |

When you decide that divorce is the healthiest option for your future, there is a lot to unravel from your marriage. Even if your marriage was brief, anything you purchased or built in that time is marital property that Texas splits according to community property statutes.

This means that you and your spouse own your marital property equally. When determining the value of said property, this can range from blue book listings or real estate market values for the car and house. Intellectual property is more nebulous and there are a few methods that evaluators use to measure your marital IP.

What is IP?

Intellectual property refers to any creation of the mind. This could be a painting on a canvas, a blueprint for an invention or even trade secrets for a business you and your spouse own. The value of IP comes from your exclusive control.

Income method

One of the most common methods of evaluation is seeing how much an IP has earned up to the divorce and extrapolating future income.

Market method

If there is no history of income, many evaluators compare your IP to similar IP on the market to determine a dollar amount.

Cost method

Another method is by evaluating the overall cost to create your IP asset or a similar IP on the market to determine its base value.

Property division is complex in any divorce. With the right resources and information, you have the tools to determine what your marital property is worth as well as the best way to divide it.