Estate planning is a powerful means to protect your wealth as it transfers to future generations. It involves not only common assets, such as bank accounts, real estate, and vehicles, but also more specialized assets like intellectual property assets.
More specifically, copyrights are extremely valuable and deserve special attention when planning your estate.
Copyright Basics
Federal copyright protection covers “original works of authorship” that have been brought into existence into some category of fixed medium.
For example, a writer who organizes their ideas into a book can seek copyright protection for them. Movies, software, songs, architectural designs, and artwork are all examples of other works protected by copyright laws.
Regarding the length of protection for copyrighted materials, most works created from 1978 on enjoy a protection period of 70 years from the date of the author or creator’s death.
Although a creator or author need not formally register a copyright, registering results in a public record serves as powerful evidence in the case of copyright protection litigation.
Copyright Assets and Estate Planning
Copyright issues can present certain challenges when it comes to estate planning. Attorneys meticulously review every asset to avoid ownership disputes and other issues. They frequently encounter copyrights and related details that must be addressed.
Ultimately, it’s the copyright holder who makes the decision after receiving pertinent and insightful guidance and advice from their attorney. With the proper counsel, copyright holders can avoid copyright and estate planning problems like the following.
Inadvertent Asset Splitting
A copyright owner may unintentionally leave the physical copyrighted work to one heir and the copyright itself to another. This typically occurs when the estate planning documents fail to directly specify an heir to a work’s copyright.
Without language addressing the actual copyright, the court will use estate planning law to distribute the asset, often resulting in the copyright not following the physical work. This can lead to problems, as the copyright holder and the heir of the physical work may be at odds over the use or destination of the work.
In addition to “splitting” the asset, the heir with the copyright might be subject to heavy tax liability without the benefit of possessing or controlling the physical asset. The way to solve this issue is to simply specify that the copyright and the protected work transfer together.
Trusts and Copyright Issues
Another issue involves the use of trusts for copyrights. Placing assets in trust is a common practice in estate planning law. However, certain copyright issues may arise that endanger the copyright’s value when a trust is used.
For example, a copyright holder has various termination of use and transfer rights over their works. When the copyright holder passes, these rights pass exclusively to the decedent’s statutory heirs. In other words, the decedent loses all control over the copyright upon their death.
Copyright holders should also be aware that copyright termination rights cannot be placed in a trust or transferred to a will. As such, it’s important for them to carefully consider their decisions during the planning phase.
Planning Is Indispensable
If you own the copyrights to valuable assets, you can protect them effectively with guided estate planning.
Proper planning anticipates and helps prevent issues that might otherwise arise in the future. Taking the time to work with an experienced estate planning lawyer not only protects you and your assets but also offers peace of mind.
Get the Guidance You Need
Your copyright and other intellectual property assets deserve protection. OC Wills and Trusts provides tailored estate planning guidance and services to clients throughout Orange County. Contact our office to begin developing a plan to protect your assets.
