Digital Assets and Divorce

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Digital Assets in DivorceAlmost every couple owns assets in digital format, including their iTunes music library; Kindle/Nook/other ebook libraries; and digital TV shows, movies, and games.

During divorce, a judge or the couple makes decisions regarding how to divide marital property such as the residence and vehicles.

Now, digital assets must also be considered in divorce.

Digital Assets in Divorce

“Digital assets are intangibles that only exist in a digital form (i.e., data in the form of binary digits). Such assets may include: e-mail and social network accounts; websites; domain names; digital media, such as pictures, music, e-books, movies, and video; blogs; reward points; digital storefronts; artwork; and data storage accounts. These assets, although intangible, are marital property and are subject to characterization, valuation and division, during divorce.” — Michelle O’Neil, Dallas, TX divorce attorney

This is still an emerging issue. Little in current law provides rules or guidelines to follow regarding digital and virtual assets. However, there is no indication that a digital or virtual asset would be characterized differently than a tangible asset.

Sharing Digital Assets in Divorce

Like a car, digital books and movies cannot be split in half and still remain useful. Some services, such as “Amazon Family,” allow sharing of content. In Amazon’s case, it’s allowed only between adults in the same household. It also gives access to each other’s credit cards.

Furthermore, the user agreements of most sites selling these assets do not address this issue. Of those that do, they may not allow for transfer of an asset. A judge’s ruling may not be able to override that agreement. Links to some of the related terms of service agreements are in the Resources section below.

Transferring Digital Assets in Divorce

For couples who have merged all their technology, then the situation can be a challenge. Details on how to divide digital goods like a shared photo site or an extensive movie streaming library will increasingly be addressed in divorce agreements and separation plans.

In the case of assets that the couple has created themselves, such as digital photos and family videos, who gets what is entirely within their control. Those items are often stored in a shared cloud-based account such as iCloud, Dropbox, or other services. One of the spouses can open their own separate account and transfer copies to it.

Other digital assets came into the family as part of purchases, such as airline miles, membership points, and reward points. These can often can be transferred. Check with the associated airlines, credit card companies, etc.

Dealing With Virtual Assets in Divorce

Virtual assets are intangibles used in virtual worlds or massively multiplayer online role‐playing games (“MMORPGs” for short). Popular online communities such as Second Life draw millions of users worldwide. They spend billions of dollars each year within these virtual realms.

Many people also have virtual businesses in these worlds that generate sales that can be translated into “real-world” money. This income may also need to be considered a marital asset.

Income Generated by Digital Assets

Sometimes a blog was started by one spouse before or during the marriage. He or she may have “monetized it. That income could be considered as a shareable asset.

If the other spouse contributed to the blog by posting to it, editing it, or advancing it in any way, the associated value may become an asset that needs to be considered in the separation agreement.

Managing Your Digital Assets

The best place to start is by having each spouse making a list of all such assets they have purchased and from where. Each’s list should include a brief description of what assets the site holds, how many (e.g., number of books). Also write down the web site address to log into it, the username, and the password.

The next step is to share the lists with each other and discuss how best to distribute and manage them going forward. Your divorce mediator can also help you with this discussion.

If all goes well, you will have a good plan that lets each spouse continue to use the digital assets he or she enjoys most.

Terms of Service of Stores Selling Digital/Virtual Assets

Resources About Digital Assets in Divorce

Photo credit: CanStockPhoto

About the Author: Mary Anne Shew is a Certified Content Marketer. For more information, please visit Creative Nation.

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