Community Property

For those creative professionals who live in community property states, you need to pay special attention to your copyrights. Sure, we all want to believe that our marriages will last forever and that we’ll never have to face issues of division of property in divorce, but it would be foolhardy at best to ignore that very real possibility.

Now, this is a very complex issue, but roughly speaking in community property states any assets acquired or created during a marriage are co-owned by the spouses. There are exceptions (like in California inherited property is separate) but generally speaking, if it is an asset, it belongs to you both equally. This is a state law thing and there is some variation from state to state.

Copyright is a federal law thing, but there are parts of that law that rub up against the state laws regarding community property. This makes divorce lawyers happy for their increased fees and creative professionals sad for having to deal with the mess. Basically, and again this is a big generalization because this is a blog and not legal advice, in most community property states your partner will have at the very least a 50% interest in any value of your copyrights even though they may not actually be technical co-owners of the copyrights.

Yeah, I said this was complex. I warned you. But I’ll save you a lot of the gory legal mumbo-jumbo details. The short version is that in most states the ownership of the copyrights will stay with you but the value will be split. California is a possible exception to that rule as the leading case in this area said the copyrights themselves were community property and thus owned by both spouses so when the now-divorced spouse (author) sued a third party for copyright infringement the ex-wife gets a share of the damages (fwiw, I don’t think that was right since the federal statute should have negated that, but I’m not the court).

Anyway in California or otherwise, functionally this shared interest in the value means that if you ever split up, your soon-to-be-ex has a claim to a value equal to 50% of the total value of your copyrights created during the marriage. S/He may even have a right to future royalties if the underlying work was created during the marriage. Think about how much work you create… now think about the value of that work. Worse yet, think about the cost of getting that work valued–the expert and legal fees involved will be large. Ouch.

So, these are issues you should settle before they become issues. You can get an agreement (like a pre-nup, for example) that contracts around some of this or settles how it will all work just in case you ever do split up (if you do that, I suggest hiring a family law attorney who has solid experience with intellectual property). Yes, it seems not very romantic to think that way on the one hand, but on the other it actually is: you care enough about your future spouse to make sure that if the relationship doesn’t work out, you can split up with less financial and (hopefully) emotional cost to all.