@ Rich Rostrom: by the time Charles V would be able to divide his lands amongst his sons ITTL, his younger brother (with a large family of his own IOTL) ruled the Austrian Hereditary Lands (521) and the kingdoms of Bohemia (1526) and Hungary (1526, but not undisputed), he also was king of the Romans (1531).
Anyway a three way division could have been:
Philip: Spain and the Colonies (and the claim on Portugal) and Sardinia* (*= might instead also go to Charles)
Charles: Naples, Sicily and Milan
Ferdinand: The Burgundian Lands (the Low Countries and Franche Comté).
Whether or not TTL Ferdinand becomes protestant, it might happen; however Charles V probably wants his ancestral lands to go to a son of him, who's a good Catholic.
One idea is that the Valois-Burgundy dukes survive longer and maybe manage to acquire a crown, which would make it a kingdom in the Empire (like Bohemia); also it would only encompass Imperial territories, but each kingdom will get all those territories attached to it. IMHO have the negotiations Philip the Good had about this succeed, might be more interesting.
There are a few possibilities for a Crown:
- Lotharingia: but under the rule of Philip the Good (or Charles the Bold) this would also mean certain claims on other imperial princes, something they won't appreciate from the Emperor (to put it mildly). Concluding probably not.
- Frisia (AKA Friesland): in pre Carolingian times kings had ruled in this area (Roughly the coastal area of the Netherlands), so it would mean reviving an existing title (this might add to legitimacy). At this point it would mean the transfer of the overlordship over the Frisian Lands (at this point roughly from the modern day Dutch province of Friesland to German East Friesland); this seems possible.
- Burgundy: the kingdom also used to be known as Arelat (or Arles), but that wouldn't be appropriate for this incarnation. At this point most of the Arelat was under French control, so this Crown had become mostly titular. The part the Burgundian dukes controlled was the Franche Comté ('Free' County Palatine of Burgundy), however territories could 'travel'; for instance from the Stem duchy of Saxony to the Electorate of Saxony (most of the latter was situated in the old Thuringian March and did nor retain much Saxon lands). If the Emperor would grant this still prestigious Crown, then all the remaining vassals of the Arelat will probably achieve imperial immediacy and they won't be transferred to Valois-Burgundy.
- elevating on of their existing titles, this would be the 'easiest solution' for the Emperor, since it would minimize the consequences for other Imperial princes. However this new Crown will lack prestige and legitimacy and wasn't preferred by Philip nor Charles.
Finally have the kingdom of Lotharingia (northern Middle Francia) survive under descendants of Lothar II (independent) or Zwentibold; in case of the latter they will be a vassal kingdom of East Francia/HRE. The bonus here is surviving Carolingians, although Zwentibold was illegitimate. Maybe being 'under the umbrella' of one of the two interested in your territory might not be a bad thing for Lotharingia.