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The Value of That Which Cannot Be Seen

Posted by Thomas Huguenor on August 26, 2016 in Property Division

As a couple goes through a divorce, many issues begin to pop up that neither spouse had foreseen. One such issue is that of intangible assets.

To put it simply, an intangible asset is an asset that does not have a physical form. A few examples of intangible assets are as follows:

  • Patents, copyrights and licenses
  • Customer lists and relationships (sometimes referred to as “The Rolodex”)
  • Non-compete agreements
  • Favorable financing
  • Software
  • Trained and assembled workforces
  • Contracts
  • Leasehold interests
  • Unpatented proprietary technology
  • Trademarks/Trade names

Intangible assets have effects that are evidence of the asset’s value, such as goodwill, brand awareness, a well-known name, increased income, etc. Although there are exceptions, intangible assets are treated the same as any tangible item of marriage property, but obviously it gets a little tricky. Identifying all of the assets that should be valued as “intangible assets” is not always an easy task, particularly if the other spouse is reticent to divulge the details. Through a process referred to as “discovery”, the representing attorneys exchange financial information of each party so that everyone is on a level playing field when it’s time for depositions, which are legal statements taken by each side’s representatives of the divorce proceedings, leading to a firm understanding of the case for both parties. A skilled legal representative is paramount at this juncture.

If you are reading this right now, it’s likely that you’re wondering how to navigate these difficult waters. You need legal assistance. Don’t try to do this on your own. Contact┬áthe San Diego complex property division attorneys at┬áThe Law Office of Thomas H. Huguenor at (858) 458-9500, certified in family law since 1981.

Valuing intangible assets is perhaps the most difficult part of dealing with them. There are methods and formulas to derive at a number, but these figures are always subjective and open to debate. Let’s start with an example. Say you developed a revolutionary tube of toothpaste and filed for a patent while you were married. You, the inventor and developer whose name is on the patent, are clearly the owner of the patent, but your spouse, having been by your side while you conceived and designed this tube of toothpaste, has some claim on the monetary value of this invention. What is important is that you and your spouse come to an agreement on what the value of your invention is. That is step number one, and it’s crucial. Valuation almost always requires an independent, expert, third party — perhaps even more than one.

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