Typically, you may think that estate planning only covers real estate, financial accounts, and personal property. However, there is another group of assets to consider: Intellectual Property. Let's look at the definition of intellectual property and its connection to estate planning.
What is Intellectual Property?
What is Intellectual Property? Intellectual Property (IP) defines assets covering patents, trademarks, copyright, and trade secrets. Copyright is an asset in intellectual property law that protects a person's original expression of original works including literary and artistic works. Trademark is an area of law in which a word, phrase, symbol, design, or a combination of these identify your goods or services. Patent law gives an exclusive property right granted to an inventor. Digital media is included in intellectual property. Trade Secrets protects business information that provides a competitive edge. If you own intellectual property, what happens to the asset at your death? What is the connection between intellectual property and estate planning?
Estate Planning considerations covers incapacity and even death. Protecting ownership of intellectual property during life is important. During life, if the owner becomes legally incapacitated, who will manage or even protect the intellectual property? Is there a trusted fiduciary to oversee the management of an asset? With a durable power of attorney (PoA), one person may manage the personal finances of a person. Yet, a different person may be assigned to another for the intellectual property. It's important for IP owners to have a thorough PoA in place. What happens to intellectual property when the owner dies?
Estate Plans and IP Value
The first step in connecting IP and your estate plan is to know the value of the intellectual property. It is possible that the IP asset is more valuable than other assets owned by an estate. Why? IP value is important because it may continue to generate income after the death of the creator.
The type of IP, the age of the IP and the ownership goes into the valuation. Another factor affecting IP value is the ever-changing laws that create potential landmines. Changes in law and legal challenges affects the valuation. It is crucial to engage patent law experts to work with an estate planning attorney to determine the value of a patent. The same is true for other IP areas, to work with an attorney with knowledge of trademark, copyright and trade secrets. The valuation of IP plays a vital role in protecting the asset in estate planning.
Estate Planning Considerations
If the owner of IP does not have a valid Last Will and Testament what happens to the IP asset? Like any estate asset, IP will go through the Probate process. If there is an unknown value, experts will need to determine its value and how it will be divided among intestate heirs.
Last Will and Testament
If the IP creator has a Will, the value of the asset goes into the estate value for dividing the estate property among beneficiaries, unless it is bequeathed to a specific beneficiary. Knowing the value helps the Grantor know how much he/she is given a beneficiary.
The Living Trust
The best way to protect your intellectual property is to include it in your living trust. Putting the IP asset in a living trust also keeps it out of the probate estate value. The trust may include specific instructions for how to handle certain types of IP posthumously.
Another important part of putting IP inside a living trust is providing specific maintenance instructions. The Grantor should choose a beneficiary who is responsible and will maintain the intellectual property under relevant laws. An estate plan will lay out the responsibilities and deadlines for maintaining IP. Each IP assets requires special attention. For example, The Patent Trademark Office (PTO) needs the beneficiary address for patent notices, the beneficiary needs to keep track of Trademark registration dates.
Your Estate Planning Attorney
Don't leave your Intellectual Property and your estate plan up to chance. I work with intellectual property attorneys in a team approach to take care of your IP assets. To make sure your document spells out exactly what you want it to say and do, Call me at 314-332-0011 or Book now for your complimentary consultation.