If you are going through a high-asset divorce in Kentucky, you are more likely dealing with more than just the family home and bank accounts. Intangible assets, though often overlooked, can play a significant role in your divorce settlement. These assets include intellectual property, goodwill, patents, trademarks and business interests.
In Kentucky, an equitable distribution state, courts aim to divide marital assets fairly but not necessarily equally. This makes it even more important to properly value your non-physical assets to ensure a just settlement in your divorce. Here are two methods to achieve this.
Pricing your intellectual property
When valuing intangible assets like patents, trademarks or copyrights in a divorce, experts often turn to the relief from royalty method. This approach asks a simple question: How much would you pay to use this asset if you did not own it? This method recognizes that the spouse who will retain ownership of the intangible asset after divorce should, in effect, compensate the other spouse for their portion of its value.
Calculating your business’s potential
When you are dealing with business-related intangible assets in your business, the multi-period excess earnings method comes into play. This approach is particularly useful for valuing assets like customer relationships, contracts and business goodwill.
Imagine you own a business that relies heavily on its relationships with customers. This approach would estimate how much money your business will make in the future because of those relationships. To do this, an appraiser or financial expert would subtract the earnings attributable to other assets, such as equipment or property, from the total earnings. This approach can be complex, but it is crucial to ensuring a fair division of your marital property.
Securing your fair share
As you face the complexities of your high-asset Kentucky divorce, remember that, beyond your physical properties, your intangible assets play a crucial role in determining a fair settlement. Dealing with intangible assets in a divorce can be challenging, but it is vital to your financial security.