For some people, such as authors, songwriters, artists, inventors and others who owe their success and wealth to their own creativity, estate planning is about more than leaving tangible assets to their loved ones and other beneficiaries. They may have intellectual property to consider.
Intellectual property, particularly when already registered and legally protected, can provide a lifetime of financial stability for family members. By leaving it to the right beneficiaries and using the appropriate estate planning tools, you can help ensure that it continues to be protected after you’re gone.
There are four primary types of intellectual property: copyrights, patents, trademarks and trade secrets. The latter two are most likely to be held by companies, so we’ll just look at the first two.
These are legal protections for “original works of authorship.” The works can be anything from books, music and paintings to computer software to architectural designs registered with the United States Copyright Office. You would typically include these in a will or trust. You can also transfer them to a beneficiary as a lifetime gift.
However a copyright is bequeathed, it should include specific instructions to a trustee or executor. If someone has many works, such as books or songs, they may appoint a special executor to help ensure that their works are protected and not misused.
You can acquire a patent to protect a discovery or invention of “any new and useful process, machine, manufacture, or composition of matter” or improvement to any of those things. They’re issued by the United States Patent and Trademark Office.
They’re often included in a trust rather than a will to help protect their privacy. Patents last for a much shorter period than copyrights, so its transfer as a lifetime gift isn’t usually the best option.
Intellectual property can have significant monetary value if it generates royalties. For example, a book can remain in print long after the author has died, and songs can outlive their composers by many decades. Family members and nonprofit organizations can benefit from these royalties for generations to come.
There’s a lot to consider when including intellectual property in an estate plan. An experienced estate planning attorney can help you preserve the fruits of your creativity and knowledge and keep them in good hands long after you’re gone.