Are Intellectual Property Rights Marital Property?

 Posted on April 07, 2025 in Asset Division

Divorce is not just about dividing homes, bank accounts, and retirement funds. It can also involve less obvious assets like intellectual property. If you or your spouse created something during the marriage, whether it was a bestselling novel, a software app, or a patented invention, those rights may be up for division. Many people are surprised to learn that intellectual property (IP) can be considered marital property under state law, especially if it produces income or has significant future value. An Illinois divorce lawyer can help you protect your creative work and ensure that these complex assets are handled fairly during the division process.

What Counts as Intellectual Property?

Intellectual property refers to creations of the mind that are legally protected. Common types include:

• Copyrights, which protect original works of authorship like books, music, or software

• Patents that grant inventors exclusive rights to their inventions for a limited time

• Trademarks to protect brand names, logos, and slogans

• Trade secrets, including confidential business information

Is Intellectual Property Considered Marital Property in Illinois?

According to the Illinois Marriage and Dissolution of Marriage Act, nearly all assets obtained by either spouse during the marriage are considered marital property, no matter whose name is on the title. This can consist of intellectual property if it was created or obtained during the marriage.

For instance, if one spouse wrote a book or developed a software application while married, the copyright to that work may be considered marital property. Even if only one spouse created it, the value generated by that IP can be subject to division.

How Do Courts Value Intellectual Property?

Valuing intellectual property can be complex. Courts often consider current and projected income, what a willing buyer would pay for the IP rights, and industry expert evaluations. Unlike physical property, IP often involves future potential income, making valuation challenging. Illinois courts aim to divide marital property equitably, not necessarily equally, and IP assets are no exception.

What If the IP Was Created Before the Marriage?

If the intellectual property was made before the marriage, it is generally considered non-marital property. However, if the IP increased in value during the marriage or was maintained using marital resources, the appreciation or income from it may be up for division.

For example, if one spouse developed a patent before the marriage but used joint funds during the marriage to market or commercialize it, the other spouse may have a claim to a portion of its increased value or income.

Can Future Royalties Be Divided in Divorce?

Courts may divide not only the current value of IP, but also future income streams such as royalties or licensing fees. This division may be achieved through:

• Ongoing payments: One spouse receives a percentage of future royalties.

• Property division: The spouse who keeps the IP may give up other assets to balance the division.

Judges will consider fairness and the specific facts of the case when deciding how to divide future earnings.

Contact a DuPage County, IL Divorce Lawyer for Help with IP Division

If you or your spouse own intellectual property, it is important to understand how it may affect your divorce settlement. A Wheaton, IL family law attorney can help protect your interests and ensure that any intellectual property is fairly addressed. Contact Goostree Law Group by calling 630-364-4046 to schedule a free consultation and learn how we can assist with your case.