When a couple divorces in Colorado, they are required to divide all of their assets as part of the divorce process. This includes both tangible and intangible assets, such as investments, retirement accounts, business interests, and intellectual property. Dividing these types of assets can be complex, often requiring an asset valuation to determine their worth. This is only sometimes a straightforward endeavor, as many of these assets have no defined monetary value. An experienced lawyer can help couples through this complicated process to ensure they receive a fair division of their joint property.
Below we look at common intangible assets couples may own, how they are dealt with during the divorce process, and how you should approach your own property division process if you and your ex-partner own intangible assets together.
What Are Intangible Assets
Intangible assets are property holdings with no physical form, such as intellectual property, airline miles, digital collections, and cryptocurrency. They can be difficult to deal with during a divorce because they often lack an easily-ascribed monetary value. As such, assigning a dollar figure to these assets for the purpose of property division is frequently complicated.
More examples of intangible assets include:
- Digital artwork
- Online-only assets
Even degrees or certifications can be considered intangible assets with value that is pertinent to a divorce case. For example, suppose one spouse contributed to another spouse attaining a certain professional designation or degree, and that degree, in turn, affected the couple’s estate value. In that case, this may factor into the valuation of their shared assets (it may also factor into spousal support decisions).
Another example includes when one spouse has an interest in or owns a business, but the other spouse has contributed significantly to that business in intangible ways. This can consist of staying home to care for the house and children or working socially to foster goodwill for their spouse's business ventures. These intangible contributions may be factored in when determining the value of specific assets and/or making property division decisions.
Negotiating the Value of Intangible Assets
Valuation of intangible assets may involve obtaining third-party evaluations or guidance from a divorce accountant or financial advisor. An experienced lawyer can also help to navigate this challenging process and help ensure that both parties receive their fair share of any intangible assets.
In addition to establishing a fair market value for their intangible assets, couples will also need to decide what these assets are worth to them personally. This is especially true for assets with a relatively low value (such as a digital movie or music collection) or those that are particularly difficult to divide (such as intellectual property rights or NFTs).
Methods divorcing couples can use to help them through difficult property divisions include:
- Coming to an agreement on their own
- Working collaboratively with their legal representation
Because Colorado is an equitable distribution state, how you and your spouse deal with your intangible assets will depend on your unique situation, the nature of those assets, and what you determine is fair and equitable.
For example, your former partner may be very attached to your extensive digital music collection while you are more focused on retaining another asset, such as your wine collection. If the two of you decide, with the help of your attorneys and other consulted professionals, that these two assets are relatively equal in value, each of you may elect to keep the collection most important to you.
What to Do If You Don't Agree on a Valuation?
If a couple cannot agree on the valuation of an intangible asset during a divorce, they may have to go to court in order to resolve the dispute. The court will use evidence presented by both parties to decide on the value. Seeking legal advice and representation during divorce and property division litigation can be very helpful as an experienced lawyer can help present accurate and persuasive information in favor of your best interests.
Disputes regarding the value of an intangible asset are common when dealing with digital assets, like cryptocurrencies, whose market value can change wildly from one day to the next. In these situations, there are a couple of options for valuing the assets for the purpose of property division. One of the most common methods is to value them at the price at which they were purchased.
That said, dealing with cryptocurrencies during a divorce is proving to be incredibly challenging as this is a relatively new area in which property division laws are being applied. If you are divorcing and have intangible assets, especially cryptocurrency holdings, it is recommended that you consult with an experienced divorce attorney as soon as possible.
At the Law Office of Greg Quimby, P.C., we have worked with countless Colorado couples to end their marriages and achieve equitable property division settlements smoothly. We understand Colorado's divorce laws and how they apply to intangible assets, and we are prepared to help you today.