What Happens to Your Digital Assets in a Divorce?

In a divorce, people tend to focus all their attention on physical property. Who will get the house, car, antique vase, etc.? Often overlooked are the digital assets that exist within a marriage.

Just because your files are code stored on a device, it doesn’t mean they don’t have value. In an age of content streaming, there are still files, programs, and apps that cost you real money. There may be real value in this digital property, and ownership can become a contentious issue in a divorce.

To understand how this property is divided, you must learn about the different systems of property division. Generally, U.S. states use one of two systems to split marital property. One is called the “equitable property” division model, where the state attempts to distribute property by fairness. Essentially, the person who “deserves” the property more can keep it.

The other model is the “community property” system. This is where states attempt to split all the marital assets equally. Each spouse should walk away with 50% of the marital assets. California is one of nine states that uses this model.

Now that you know how property is divided, let’s discuss how these systems apply to digital assets.

Copying Files

The simplest way to avoid a hassle is to make copies of important files and give them to your spouse. This can apply to all your family pictures and important documents. There’s no need to squabble over photo albums when you can make exact, digital replicas. That’s the beauty of digital property.

Copying files, however, can become legally murky. Technically, it’s illegal to copy and share most files that you purchased. Some companies have exceptions to this rule, but most don’t. To be certain of the legality behind sharing your music files, movies, and eBooks, consult the user agreements of the retailer. Even doing that, however, can be difficult, as we often buy files from multiple services. If you paid money for any files, it’s best to assume that you shouldn’t legally copy it, and it is therefore a marital asset.

Shared Accounts

Most households share their Netflix, Hulu, and Spotify accounts equally. In a divorce, you should delete any shared accounts. Each person becomes responsible for whether they want to continue with one service or another, and they should pay for it individually.

Many of these services, however, offer “family accounts” at a discounted rate. If you wish to continue using this account, you must decide who will be responsible for the continued payments on these accounts. You can decide to jointly pay for it, but those situations can become a problem after a divorce. It’s best to keep one person paying for it, simply to avoid future complications.

Courts will likely ask a couple to follow through on the suggestions above. They want solutions with the least likelihood of conflict. They’ll want the streaming accounts to become individualized, or they’ll order one person to be in charge of shared, family accounts. This is not a certainty, but it’s the most likely outcome.

This will probably be the conclusion, regardless of your state’s property division model. The account is not something where you’ve built up ownership. You have access to the streaming media, but you lose that access when you close your account. The streaming service is an ongoing expense, not property to be shared.

DRM Protected Assets

Depending on the digital media you purchase, your files may be DRM (digital rights management) protected. This means the files work only with certain programs or computers. You often see DRM in the video game industry. If you download a game, that game is inextricably tied to your account or even your specific game console. You cannot transfer it to another console without going through the retailer, and it’s virtually impossible to transfer it to a different user.

Furthermore, with many services, you aren’t actually purchasing a file you can keep. Most movie, music, eBook, and digital comics sites are not selling you the product. They’re selling you licensing rights to the product. You can’t download it, but you can access it any time through the service, website, app, etc.

In situations like these, it may not be possible to trade individual files, regardless of equity or equality. One spouse may have a legitimate claim to one file and the other spouse another, but there’s no way to divide them. The only option left will be to view the service or video game console as one asset.

Imagine, for instance, you have a Nintendo Switch with many digital games. Courts must view this as one item since the games can’t be divided among the spouses. The overall value of this asset, therefore, will be the cost of the system plus the cost of the digital games. In an equitable division state, the primary user of the Switch will probably keep it, not owing their spouse money. In a community property division, one person will keep it, owing the other spouse half the value of the system and its games.

Negotiating a Split of Digital Assets

Any discussion of who can keep or lose property is tough. It can be especially frustrating when it concerns ethereal assets like digital media. It can start to feel like you’re arguing over property that isn’t “real.” However, digital assets are important, and they are worth discussing just like any other property.

Divorcing couples often find it hard to agree. After all, their relationship has fallen apart. However, many wish to avoid court and end the marriage as amicable as possible. To that end, we suggest attending mediation to negotiate all your property divisions, both physical and digital.

Mediators are legal professionals with special psychological training. They can make it easier for couples to talk through their needs and reach a mutual understanding. If negotiations turn ugly, the mediator is there to keep everyone cool and working together.

The best part of mediation is your inclusion. If you allow the court to make decisions, you are under a legal obligation to follow its rulings. You could be forced to do something that you believe is completely unfair. Through mediation, you have a say in all decisions, giving you more power over your divorce.

If you need help dividing digital assets in your divorce, contact our firm for help. You can call us at (805) 633-4999, or you can reach us online.

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