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Do future book royalties count as marital property in Florida

Under Florida's "community property" laws, any assets and debts accumulated during the course of the marriage may be considered marital property, subject to valuation and equitable distribution between spouses in the event of divorce.

But what counts as "accumulated assets" during marriage? In one divorce property case, the Florida Fourth District Court of Appeals had to rule on book royalties. 

The case of Morenberg v. Morenberg

Like many states, the cutoff for when marital property stops being open to equitable distribution is usually the date of the legal separation or date the divorce papers are filed. That makes sense in most cases, but in the case of Morenberg v. Morenberg, there were special circumstances regarding income earned from nearly completeing a book shortly before the divorce trial. Mr. Morenberg's efforts on the book were fully disclosed during the trial and the court initially ruled that any future royalties should be counted as marital property and split 50-50.  

The appeal and its implications

Mr. Morenberg's attorney appealed the decision, arguing that the book was not yet completed at the time of the trial, as the publisher required further revisions. All royalties were paid only after (and because) Mr. Morenberg continued to make revisions necessary for the publisher to bring the product to market. Florida's Fourth District Court of Appeals agreed, saying that further work was completed following the date of the divorce decree, therefore future royalties should not be counted as income earned during the course of marriage.

The implications for future earnings for intellectual property

The implications for other divorce property litigation in Florida may be significant. How will courts rule if one spouse deliberately holds off on submitting a book, an invention or a software application until after a planned divorce, particularly if marital assets were expended to move the product toward completion?

It is unclear whether this particular case will go to further appeal. It is possible that the amount of royalty income on a book called Doing Grammar will not be significant enough for Mrs. Morenberg to worry about. But we can only wonder how the court would have ruled had a developer such as Mark Zuckerberg deliberately waited several months after divorce before making final revisions and bringing a new idea to market.

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