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She intends to keep using it, but from my standpoint I'm not sure what my role or involvement is. Someone else did the design, I'm just doing some optimization and promotion work on it.
What kind of disclaimer would I need to have, if I do need one, or is just staying transparent enough? I've said to just take another name, it doesn't seem worth any hassles.
Would it be best off on my part to bow out altogether?
Since you've advised her to give it up, I doubt you're in any danger. However, it wouldn't hurt to get it in writing... "I Client Name hereby acknowledge and affirm that Marcia has advised me to abandon the domain name in dispute, etc., Signed, YourClient, Date, Independent Witness." That sort of thing.
However, as always, I'll advise you to consult an attorney.
If she changes domains now, it will reduce her legal costs and also avoid complete loss of her domain-branding if the domain is yanked out from under her unexpectedly. A redirect in time saves nine, so to say... Best to do it while she still controls the domain.