Consider how royalties affect your divorce

On Behalf of | Jul 7, 2022 | High-Asset Divorce |

In a high net worth divorce, it is rare to find a case that has a straightforward amount of income or assets. You may share businesses, intellectual property or even creative works producing constant income and generating royalties.

When it comes time to divide up the community property in your marriage, California courts push to divide things equally. In a divorce that involves royalties, there are ways — through both mediation and litigation — to do so in a way that is fair between both parties.

Asset or income?

Royalties pose an interesting problem. As an asset, each spouse may pursue a certain percentage of the pie. If you desire all royalties for your creative endeavors, there may be a way to divide an equitable amount of property to your spouse in exchange.

As the Boston Herald describes, it may be prudent to agree that future royalties are instead a form of income for the purposes of child support.

Negotiate or litigate?

Mediation offers a lot of options involving timelines and buyouts. You may start splitting the royalties 50/50 right after the divorce but slowly phase out your ex-spouse as the owner of your work.

If you and your spouse fail to agree on the exact amounts, mediation may end up going nowhere and litigation through the courts may prove to be a better option. Royalties, though complicated, are just as important as the rest of your marital property. When it comes to getting what is fair, it is useful to understand your situation, your options and the best strategies for pursuing a fair division.