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. Today, let's look at your estate plan and copyrights.
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 any 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.
What is a Copyright?
What is a copyright? The U.S. government defines copyright as “original works of authorship,” and body of exclusive rights granted by law to copyright owners for protection of their work. You can read more at https://www.copyright.gov/what-is-copyright/ . 17 USC § 106 gives the owner the following exclusive rights: 1). reproduce the copyrighted work; 2). prepare derivative works based on the copyrighted work such as sequels; 3). distribute copies of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending; 4). perform the copyrighted work publicly; and 5). display the copyrighted work publicly.
Copyright covers different types of original work: 1) Public Performing Rights, 2) Public Performance License, 3) Reproduction Right, 4) Mechanical Licenses, and 5) Synchronization License. One may own a copyright in areas such as literary works, dramatic works, motion pictures, sculpture work, choreographic works, sound recordings, pantomimes, and even graphic works. Copyright Ownership is important. Who do you want to control the copyright during incapacity or own it at death?
Estate Planning and Copyrights
How is a copyright connected to estate planning? Why is estate planning important for your copyright? Let's look at the works of copyrights and how you need to think about protecting this intellectual property asset in your personal estate plan.
Your estate planning attorney helps you catalogue your copyrights and other intellectual property to organize a detailed inventory for estate planning. The author must mention the original work and the copyright in the estate plan. In addition, it is necessary to determine the value of your copyright. A copyright's fair market value on the date of death is often determined based on the future earnings from the property. If there is a potential for a high fair market value, tax apportionment issues may be considered in the estate plan.
Plan for a Copyright
The right to termination is an automatic right of inheritance for copyrights and is not reversible. The termination right applies to any transfer during the creator's lifetime. However, the law granting termination rights includes a specific exception for transfers by a Will. During the creator's lifetime, a right to terminate a copyright at a future date. The creator of an original works needs to understand termination rights.
What happens to an inherited copyright? If a copyright is not included in an estate plan, statutory heirs inherit. All your copyrights If you do not specifically mention your copyright in your estate plan, then your work product and its value will be placed in the residuary estate. The residuary estate is simply everything left over after distributions, debt, and taxes.
Your Estate Planning Attorney
Different ways exist for a copyright owner and an Executor to treat copyrights in an estate plan. Don't leave your Intellectual Property and your estate plan up to chance. To make sure your document spells out exactly what you want to protect your IP, call me at 314-332-0011 or Book now for your complimentary consultation.