How is intellectual property classified in the event of a divorce in Michigan?

Full question:

My husband and I have decided to part ways. We both work in the IT industry and have developed several products that have copyrights. Some of the copyrights are individual while others are joint. In the event of a divorce in a Detroit family court, how will these be treated and divided?

• Category: Divorce
• Subcategory: Property Settlements
• Date: 04/07/2025
• State: Michigan

Answer:

Michigan being a state of equitable distribution, each spouse has a ‘fair and equitable’ claim on the value of the total marital assets irrespective of the legal ownership of the property. Chapter 552 of the Michigan Compiled Laws Service deals with the legal provisions pertaining to divorce.

MCLS § 552.401 section 1 states that all assets shall be fairly and equitably divided amongst the spouses in the event of a divorce:

“The circuit court of this state may include in any decree of divorce or of separate maintenance entered in the circuit court appropriate provisions awarding to a party all or a portion of the property, either real or personal, owned by his or her spouse, as appears to the court to be equitable under all the circumstances of the case, if it appears from the evidence in the case that the party contributed to the acquisition, improvement, or accumulation of the property. The decree, upon becoming final, shall have the same force and effect as a quitclaim deed of the real estate, if any, or a bill of sale of the personal property, if any, given by the party's spouse to the party.”

The above provision lays down the basis for the distinction between marital property and separate property. For a property to be termed marital property, it has to be one that was acquired by the spouses by contributing to the “acquisition, improvement, or accumulation of the property.” Separate property involves assets that a party owned before the marriage, gifts or inheritances, assets received after separation or filing, or assets or appreciation traceable to those items. Therefore, it is safe to infer that a gift received from a third party would be separate property and would not be distributed unless the spouse claiming the asset can prove the requirement laid out in MCLS § 552.401 section 1.

Intellectual properties shall be treated as separate property to the extent they were created before the marriage. Also, a copyright received shortly after the marriage should be separate property if the owner spouse performed the necessary work before the marriage. Similarly, if a spouse puts in the necessary effort to get the patent during the marriage, the patent shall be marital property. Where the work is done partly before and partly after the marriage, a patent would have both marital and separate interests.