What Is Intellectual Property?

Intellectual Property (“IP”) is generally classified as intangible personal property, meaning it’s an asset that lacks physical form but holds economic value.

The main types of IP are:

• Copyrights (protections for original works like books, music, software, art): Treated as intangible personal property under federal law.
• Patents (exclusive rights to inventions or processes): Classified as intangible personal property.
• Trademarks (protections for brands, logos, slogans): Regarded as intangible personal property.
• Trade Secrets (confidential business info like formulas, methods): Treated as intangible personal property or contract rights (enforced via agreements).

How Is IP Viewed in Marriage?

When you intertwine IP and marriage, it can create complications that many couples may not have been aware of previously. If you and your partner have not had a conversation or set up a prenuptial agreement where you explicitly state what happens to any IP, either created before or during marriage, in the event of divorce it can create animosity over who owns the IP, as well as who receives any assets the IP may generate.

Marital vs. Separate

IP developed before marriage is usually separate, but if developed during, that IP becomes marital. Even if the IP was created before marriage, an increase in value throughout the duration of the marriage may become marital property.

Valuation of the Asset

Valuing IP is complicated because it is intangible and based on future potential income. In some cases, if the IP is crucial to a spouse’s career and cannot be easily split, a court might award the asset to the creator, while retaining the non-creating spouse’s entitlement to financial interest in the work. Another method of division of IP is for the court to offset a given value of the IP by giving the spouse that is not awarded the IP more of other marital assets to balance the total value.

How A Court Would Divide in Divorce

Generally, a court will award intellectual property to the creator spouse (the spouse who created or obtained the intellectual property). Thus, the creator spouse has sole management and control over the intellectual property. However, the non-creator spouse may still be entitled to a financial interest in the work, if the work was created during the marriage. For example, if a spouse creates a new iPhone Application during the marriage, that spouse would hold the exclusive possession and control of that Application. The other spouse, however, could be entitled to a portion of the royalties and any other economic benefit earned from the Application.

How Do I Protect My Intellectual Property?

A prenuptial agreement is an effective way to protect your IP and any associated assets prior to marriage or in the event of a divorce. A well-drafted prenup can establish clear guidelines for how IP will be treated if the marriage ends. If you and your spouse have created IP during marriage, an experienced attorney can outline ownership rights or how any income associated with IP would be divided.

If you are an individual or business with intellectual property and would like advice on these assets, as well as how to protect them in the case of an upcoming marriage or potential divorce, our firm can handle these issues all under one roof. Our Intellectual Property and Domestic Relations attorneys will work hand-in-hand to ensure your IP is protected and passed along as you desire it to be.

For more information, or to seek counsel from our Family Law or Intellectual Property practice groups, please reach out to request a consultation or call us at 216-696-1422.

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This information is provided for general informational purposes only and should not be construed as legal advice. Readers should consult with qualified legal counsel regarding their specific circumstances before taking any action based on the information presented.

The post IP & Marriage: How to Ensure Your Intellectual Property Is Protected appeared first on McCarthy Lebit - A Cleveland/Ohio Law Firm.

To appreciate why these documents are helpful, one must appreciate what happens in the event of divorce or death and this document is not drafted. Prenups may be perceived as taboo, however, they aid in the unlikely termination of the marriage. Like an operating agreement in a business partnership, the contract that defines what happens should the business cease operation is critical—the same is true in marriage. A prenup is a legal contract entered into by a couple prior to marriage, outlining distribution of assets, spousal support, and other financial considerations in the event of divorce or death. In Ohio, these agreements are prudent means of protecting individual interests while fostering open communication between partners.

In the event one spouse has a business interest, a prenuptial agreement should be an absolute prior to entering the marriage. It is important to recognize if your marriage has a financial component so you can take steps to protect your family wealth and your finances before entering that financial partnership with your spouse.

Prenups enable candid conversation about financial expectations, assets, and debts prior to marriage, laying the foundation for a relationship built on trust and understanding. By clearly defining each party’s rights and responsibilities, a prenup can mitigate disputes and uncertainties that may arise in the unfortunate event of divorce or death.

No two relationships are identical, which is why it’s important to consult legal counsel when considering a prenup. There are several online resources that perhaps may be less expensive, but it is the proverbial, “you get what you pay for” that may make that inexpensive indulgence unenforceable when the agreement has application. Engaging with legal counsel is vital in minimizing potential prenup challenges that may be faced in the event of divorce or death. Whether safeguarding a family business, protecting inheritances, or outlining spousal support terms, attorneys can customize prenups to meet the unique needs and circumstances of each couple.

Ohio is home to a myriad of entrepreneurs and small-business owners. Prenups provide a mechanism for these individuals to shield their businesses from complexities of divorce proceedings, helping to ensure the continued success and security of their enterprises.

Crafting comprehensive prenuptial agreements requires a nuanced understanding of Ohio’s family laws for divorce, death, and tax. In handling prenups, our experienced legal team offers a unique approach in that we offer experienced counsel in family law, estate planning, and tax planning. All prenups see the eyes of at least one family law attorneys and another for the death piece of the agreement.

Prenups are not merely tools for the affluent; they are also practical instruments for individuals committed to building a strong foundation for their marriage. At McCarthy Lebit, we recognize the significance of these agreements in promoting financial transparency and protecting individual interests, and we can assist you in securing your future.

For more information or to seek counsel from our Family Law attorneys, please reach out to request a consultation or call us at 216-696-1422. McCarthy Lebit would like to thank law clerk Daniel Howard for his effort in assisting with the preparation of this legal blog post for The More Report.

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This information is provided for general informational purposes only and should not be construed as legal advice. Readers should consult with qualified legal counsel regarding their specific circumstances before taking any action based on the information presented.

The post Beyond the Knot: The Power & Purpose of Prenuptial Agreements appeared first on McCarthy Lebit - A Cleveland/Ohio Law Firm.