Divorcing & Domain Names at Issue

[pdcom]

Okay, I know the debate of whether domains are property or not has been going on for a while and I'm sorry to bring it up again. Perhaps my real-life situation will put enough of a spin on the topic to make it palatable....

My soon-to-be-ex-husband ("STBX") wants me to put values on all of my domain names for the purpose of settling our divorce. (BTW, the domains on my website are not current! I'm ashamed to admit I haven't updated my site in months. ) Whatever dollar value is determined to represent my domain portfolio will be used in dividing our total assets. I have several issues with this and would like to hear what others think or can suggest.

Despite the fact that my STBX fought against and belittled me for years about my interest in and purchasing of domain names (it's part of what broke our relationship), he has suddenly developed an appreciation for my domain investing and thinks my portfolio is worth at least $100,000. Of course he wants me to split the portfolio's "dollar value" in the divorce as part of our marital assets.

Okay, so now I'm supposed to come up with a dollar value. I currently have about 570 domains. I'm sure everyone on this forum recognizes the absurdity of what I'm being asked to do. As far as I'm concerned, a domain name (or a portfolio) is really only worth what someone is willing to pay for it. Hypothetical example: If someone contacts me to offer $300 for a domain, but I decide to put it on auction at eBay and it sells there for $45, is the domain worth $45 or is it worth $300? What if it has a PR5 and 8500 good incoming links? What if all the above are true, and the domain pulls in $140 a year in parking revenue? Is the domain worth 1.5 times the annual revenue? What if all the above is true and the domain is an 18-character .us?

My point is that no one has been able to come up with a definitive system for identifying a domain's actual dollar value. It seems everyone evaluates the value of a domain based on what they, themselves, (or their clients) are looking for in a domain. That's why it seems to me that the domain is really only worth what someone is willing to pay for it.

So you can see I'm in a bit of a pickle!

Let's not even talk about whether I should have to consider my domains a part of the marital assets (or that he should have ANY right to my domains other than splitting the cost of registrations paid during the marriage),

The long and short of it is this:
* I don't want to drag out this divorce by hiring another attorney to fight about whether the domains are property or not.
* I personally don't believe that my portfolio is worth as much as $100,000.
* I can't decide how to come up with a $ value. Assigning an arbitrary value to each domain seems like a laborious and futile effort, but that's what he has asked me to do.

One friend of mine suggested that I tell him this: "If you think my portfolio is worth $100,000, then you can buy it from me for $50,000." Since my STBX doesn't really know anything about domains, maybe then he would just let the issue die, or just agree to split the registration costs (I "repay" half to his side of the assets). Or if he agreed I could take the cash and build a new portfolio.

Yes, I do have a divorce attorney, but I won't be meeting with her about this issue until next Wednesday and I would like to get some input from a community of domainers who actually know what they're talking about.

 

[mis_chiff]

Well I am divorced, unfortunately domains didn't exist then :D
But from what I understand (in Canada) and watching what my
well established sister is going through with hers at the moment...
some of this might help or maybe help figure out something else.

Were you into domaining before the marriage?

I guess the first question is: How much of the joint money did you use?
or was it your own funds, that did not affect the household funds?
Also, when sales or revenue were generated...where did that money go?
Was this considered your job? By him?
or a hobby that made a few extra dollars?

There are alot of questions that need to be considered, if you can find
out the laws in your area regarding "hobbies and extra cash" depending on how it was regarded in the relationship - will determine the course to go.

If it was considered a "job" by both and he wants to claim half then he needs to prove his half of the involvement
(ie: renewal costs, transfer fees, paypal fees, taxes etc)
But then you get to claim half of everything he has ever collected as well...
it could get quite nitty gritty, but then that might make him back off about it.

I can't offer legal advice but hopefully these suggestions might give you another avenue to go down.

Good Luck
wendy

 

[shockie]

appraising an entire portfolio can be quite the challenge, but you can just quickly conservatively estimate it if need be.

so you could under appraise - i mean, conservatively appraise, your portfolio, and if he complains you can then tell him to buy half of the portfolio at $50k. my gut tells me though that if he didn't pay in the registrations, made any decisions in which domains to invest in, and really doesn't have anything to do with the domains, you should be able to keep them.

hopefully your lawyer can help you out with this, because i would imagine that the portfolio means more than just its monetary value to you.

good luck with the divorce.

 

[pdcom]

Were you into domaining before the marriage?

I guess the first question is: How much of the joint money did you use?
or was it your own funds, that did not affect the household funds?
Also, when sales or revenue were generated...where did that money go?
Was this considered your job? By him?
or a hobby that made a few extra dollars?

We were married in 1991 and I started domaining in 2000. The money came from joint accounts. I have kept excellent records in a spreadsheet since 2001, so I know almost exactly how much the domains have cost: through today, it's right about $18,700. Although I have been a "domestic diva" since 1993, the cost of my domaining did not cause financial hardship, and my husband considered it my hobby. (We used to joke that his job was to make the money and my job was to spend it.) Sales and revenues either went into paying renewal fees or back into our joint accounts.

 

[mis_chiff]

We were married in 1991 and I started domaining in 2000. The money came from joint accounts. I have kept excellent records in a spreadsheet since 2001, so I know almost exactly how much the domains have cost: through today, it's right about $18,700. Although I have been a "domestic diva" since 1993, the cost of my domaining did not cause financial hardship, and my husband considered it my hobby. (We used to joke that his job was to make the money and my job was to spend it.) Sales and revenues either went into paying renewal fees or back into our joint accounts.

Well since you can't speculate the value - as everyone's
dollar amount would be different depending on the name they wanted
I would take the $18,700 less what went back in, less the renewal fees
and take it from there. At least you have documents to "show" the value
at present. Cause if you don't sell them - there can't be a value :imho:

But that's only if you actually have to include them or not.
I don't think a "hobby" is considered a joint asset. This would be
the more likely route to go.

 

[snoop]

Obviously this is an asset and should be included in the marital assets. If you feel the value he has put on it is too high then I would suggest like your friend said about him getting the domains.

 

[briman1970]

Domains are property. I'm no lawyer, but I'd guess if the registration money came from a joint account, you will either have to pay your husband half of the appraised value as part of the settlement or sell the collection and split the money. If it were me, I'd try to make an agreement to sell them and split the money. If the court forces you to get a paid appraisal, you will be royally screwed. Appraisals are expensive and generally inaccurate.

You could be mean and just fudge the whois on the best half and liquidate the crappy ones.

 

[Ronald Regging]

Is it too late to form an LLC and transfer them all over to the company? I guess at this stage, that would be considered hiding assets. Forming an LLC is definitely something people should consider if they ever amass a sizable chunk of valuable domains, you know, while the marriage is still good This is a tough one, but I think they definitely are considered property. I dont know enough about divorce law to understand how this works, but I'd imagine if they were acquired during the marriage using joint money, then they would be considered communal property.

As for value. If your husband doesn't know that much about domaining, is he aware of the value of PR and backlinks and stuff like that? If not, I wouldn't bring it up I agree with what others have said. If he feels that they are worth $100,000, you can argue against this but then offer to sell him the domains for $50,000 as part of the proceedings.

 

[Kate]

Appraising a whole portfolio can be a challenge.
Provided that you and your STBX agree you could come up with some alternate arrangement to split the portfolio in a fair way. One would be the lottery way.
Put all the names into an Excel sheet, sort them in random order and split the list in two, blindly :blink:

Other possibility: put the portfolio on sale, and sell as a whole or each domain separately. Split the proceeds from each sale 50/50 until portfolio is sold.

 

[pdcom]

All very thoughtful and useful input ~ Much appreciated!

I think I'll do some combination of things to sort this out. Definitely sell off the "crappy" domains.

I purchased a number of domains after I signed the divorce papers, so I'm going to argue that those are my separate property and will not be considered in the settlement. He is presenting a similar argument on an asset he has, so he should be willing to accept this. We've agreed to settle out of court no matter what, so this can all be legally binding by including it in our settlement agreement.

Again, thanks to everyone for your posts. I've got some ideas now as to how to settle this issue in a way that's agreeable to both of us.

:hehe:

 

[seeker]

a logical approach would be to get an independent appraisal for the p[ortfolio from a 3rd party that is acceptable to both. split the cost for the appraisal, and take it from there.
Without getting into it too much as no one knows who might be reading this thread, I would 'suggest' a 3rd party appraisal company that tends to under value portfolios for your sake.
a second aproach, is to actually get an 'offer' from a 'third party' for the entire portfolio.
(I hope you get 'my drift' here in the quotes).
then, divide that offer in half, or 'sell' it at that price with a certain 'arrangement' to 'possibly' get the portfolio back as an option at a later date for a certain minimal 'fee'.
a good start might be digipawn.com, a domain pawn shop that will 'appraise' accordingly...

hope this helps.

 

[wow!]

Well here is an idea, why dont u give all your domains as a gift to a friend or your relatives.
Than the value of them will be only the reg fee.
Or just go to date with a millionare domainer here...

 

[mis_chiff]

All very thoughtful and useful input ~ Much appreciated!

I think I'll do some combination of things to sort this out. Definitely sell off the "crappy" domains.

I purchased a number of domains after I signed the divorce papers, so I'm going to argue that those are my separate property and will not be considered in the settlement. He is presenting a similar argument on an asset he has, so he should be willing to accept this. We've agreed to settle out of court no matter what, so this can all be legally binding by including it in our settlement agreement.

Again, thanks to everyone for your posts. I've got some ideas now as to how to settle this issue in a way that's agreeable to both of us.

:hehe:

Glad to hear that the information helped a little.
Some good advice for sure.
I hope it all goes smoothly for you, divorce is
hard enough without the bickering over material
things. Take care and give us an update when it's
all over if you can.

 

[labrocca]

Domains are property. I'm no lawyer, but I'd guess if the registration money came from a joint account, you will either have to pay your husband half of the appraised value as part of the settlement or sell the collection and split the money. If it were me, I'd try to make an agreement to sell them and split the money. If the court forces you to get a paid appraisal, you will be royally screwed. Appraisals are expensive and generally inaccurate.

You could be mean and just fudge the whois on the best half and liquidate the crappy ones.

Domains are NOT property. Don't let anyone tell you otherwise. The courts have NOT ruled on this. If I was you I would fight to pay him the other half of the money you paid so they are your assets in full. Domains are rented from a registrar....they themselves hold NO value as property. This is why domainers should fight to keep it that way. Next we will be taxed on them!

If I was you...get a strong lawyer which is the real key to any divorce. If need be...sell all the domains to a guy like me for a rock-bottom price. Maybe in the near future I will sell them back to you at a small profit.

Once the domains are no longer registered in your name he can't do jack. I will PM you now.

 

[yandig]

In reference to the above post by labrocca, here is an interesting article with comments on that very subject: http://www.circleid.com/posts/is_a_domain_name_property/

 

[RageD]

Hello,

I'm sorry to hear about your divorce with your husband. I would like to start by saying I hope this gets resolved as quickly, painless, and with the least mess possible. (Although I know all divorce is messy)

Domains and divorce is an interesting concept. If he helped pay for them as mentioned above, I would just suggest paying him back what he paid and keep the names. This is my personal thoughts on this because names you pick up I feel he is not entitled to in anyway except for the fact he helped you pay. If that is not possible, try looking for quotes on your portfolio if you're really truley looking to sell. But what I would do before I took any action is consult your lawyer first. Find out if your domains are considered "marital assets."

I am no law professional however, this is where I would find the argument: All names are registered under your name. (this I am assuming) Say for all 500+ names you have a current website at each. Is he entitled to the gross revenue of that name eventhough he has nothing to do with it other than maybe $8? Again, I am no lawyer, but it'd be an interesting thing to find out if it is considered a marital asset and if so, why.

Good luck,
-RageD

 

[tjoseph]

Come on! You haven't worked outside of the home since 1993 and you are entitled to half the assets you and your husband have aquired since you have been married (and maybe alimony and child support too). If you own a house, cars, and other items you will get half the equity of those valuable properties that his hard work and occupational skills paid for. If you earned some profit from your skills in domaining since 2000 he is entitled to his half. Fair is fair!

 

[briman1970]

Come on! You haven't worked outside of the home since 1993 and you are entitled to half the assets you and your husband have aquired since you have been married (and maybe alimony and child support too). If you own a house, cars, and other items you will get half the equity of those valuable properties that his hard work and occupational skills paid for. If you earned some profit from your skills in domaining since 2000 he is entitled to his half. Fair is fair!

She said she was a "domestic diva" since 1993. I am a stay-at-home Dad since 2003. I have worked on oil rigs, on large and small fishing vessels, and at UPS. This is (by far) the toughest job I've ever had... don't get me started. :yell:

If she doesn't have kids, I take it all back. :hehe:

 

[Dave_Z]

The courts have NOT ruled on this.

Indeed, I've yet to find any Court ruling anywhere saying domain names are
property. The judge/s in the last sex.com decision would've said it outright if
they found cause for such, though let's not argue the legalities of it since not
one of us are lawyers anyway. :D

I'm seriously intrigued with pdcom's question, though at the same time I hope
she and her STBX will settle that at the soonest possible time. Best wishes to
you.

Stick around, folks. We're all learning something good here.

 

[Robert Allen]

I have sent ICANN and email to help to clear this up. Linking to this thread.

ROb