If you’re a songwriter, inventor, artist, author or some other creative person who owns intellectual property (IP) rights, then you’ll need to plan for what you’d like to happen with them when you pass away.
Of the four most common intellectual property rights, individuals generally only hold patents and copyrights. Corporate entities generally own trademarks or trade secrets. It’s critical that you understand how to best pass on your IP rights when you pass away, as it’s a way that you can continue providing for your family once you’re gone.
How to handle copyrights when estate planning
You can secure a copyright on any number of “original works of authorship,” including music, computer programs, books, paintings and architectural designs, for example.
One option for passing this IP on to others is to transfer it as a lifetime gift to a beneficiary, include it in your will or place it in a trust. You’ll need to detail specific instructions that your executor or trustee should follow in administering or distributing a copyright to your beneficiaries to ensure they properly use and protect it.
How to handle patents as part of the estate planning process
Someone generally secures a patent to protect their right to any invention, discovery, process or composition of matter. Patent holders most commonly include their rights in a trust for privacy reasons. It’s not ideal to transfer patents as a lifetime gift since they remain valid for significantly less time than a copyright.
Why you need to devise a plan for your intellectual property rights
As you’re likely aware, one of the reasons why it’s so critical to account for your IP in your estate plan is because it often has significant monetary value and the potential for accruing future royalties depending on what you do with it. You may want to consult with an attorney about how to best incorporate your intellectual property rights into your estate plan to ensure that they seamlessly pass to whomever you intend when the time is right.