Creative works that belong to you are considered your intellectual property and are often called digital assets. Because your digital assets are often worth something, they should be included in your estate plan just like your financial assets.
Protect your intellectual property and pass it down to future generations without losing it’s value or integrity.
Your Work is Important
If you are a professional digital artist, an author, or an employee of a company that owns your work, what you do daily is created by you for commercial purposes and is worth protecting. However, if you are a finance specialist, who in your spare time writes scores of music for piano, you may not consider this a valuable asset to pass on. Your family or friends may disagree. If you do not plan for what will happen to your works, your family could struggle over what to do with your music compositions when you die. Even worse, someone else could steal your work and pass it off as their own without your family’s knowledge or permission.
Intellectual property is a work or invention that is the result of human creativity and intellect and can be legally protected. To legally protect your work and pass it on to the next generation, consider these legal options.
Copyright protection is “granted by law for original works of authorship fixed in a tangible medium of expression such as literary, dramatic, musical, and artistic works like poetry, novels, movies, songs, computer software, and architecture. Copyright exists from the moment a work is created. If someone does copy your work, you then have to register with the copyright office if you wish to bring a lawsuit for infringement of a U.S. work. Copyright does not protect facts, ideas, systems, or methods of operation, although it may protect the way these things are expressed. (1)
To learn more about copyrighting your work, check out Copyright.gov
Passing On a Copyright
If you get a copyright for your work, you can pass the work on to future generations who receive any benefits of your copyrighted work. Otherwise, your work could pass into the public domain and be used by anyone indiscriminately. A copyright can be easily passed on in your will or as a lifetime gift. This way of inheriting also prevents your heirs from paying more income tax because of capital gains as a result.
If you have inherited a family copyright, you may want to record the death of the author at the Copyright office to extend the copyright for 70 years. “Otherwise, the work will be presumed to be in the public domain upon the earlier of 95 years from the date of first publication or 120 years from the creation of the work.” (2)
A patent protects inventions or discoveries. Ideas and discoveries are not protected by the copyright law, although the way in which they are expressed may be. (3) A patentable invention must be considered useful and work. It also may not be a law of nature, physical phenomena, or an abstract idea. As an inventor, you may apply for a patent. To learn more about patents and how to apply, check out the US Patent and Trademark Office.
In order for an invention to be patentable it must be a new invention or discovery and cannot have already been patented, described in a printed publication, or already in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention. It also cannot already have a patent that was filed before yours.
Passing on a Patent
If the inventor is deceased, an application for a patent may be submitted by legal representatives. If you are seeking a patent for your uncle who passed away, you would let the administrator for probate apply for the patent. If the inventor is legally incapacitated, the application for patent may be made by a legal guardian.
Patents can be passed on by the inventor through a will or a trust. A trust can prevent the matter of the patent from becoming public knowledge.
A trademark protects words, phrases, symbols, or designs identifying the source of the goods or services of one party and distinguishing them from those of others. If you own a trademark registration, you must file documents at regular intervals to renew your registration. If you don’t file these documents before the deadline, your registration will be canceled or will expire. To register a trademark or learn more about trademarks, visit the USPTO.gov site on trademarks.
Trademarks are generally something you would have in your estate as someone who owned a business and a brand logo. Oftentimes, small businesses do not realize that a trademark is necessary to keep other brands from infringing upon your rights as a trademark owner. If you don’t have a registered trademark, you have no legal standing if someone else steals your logo and tries to run a similar business. You can also be sued by another business who feels that your trademark infringes upon their rights as a business.
Passing on a Trademark
A registered trademark can be transferred by a will or trust. Avoiding probate is possible with a trust. This can reduce court fees associated with settling your estate in court.
Intellectual property that has been transferred to another party often generates royalties or other income that becomes part of a decedent’s estate. If there are any royalties associated with your intellectual property, you can have any publishers or other agencies notified to direct the payments to a trust or to your loved ones who have inherited the right to receive those royalties. (2)
If you are planning your estate, don’t miss the value of your digital assets. It is crucial to pass them on to the next generation with the rights and value of the asset intact. An experienced business attorney can help you set up your copyrights, patents, and trademarks while an estate planning attorney can help you work out how best to pass on their value without incurring capital income taxes for your heirs or losing the rights to your work.
Contact us at Hopler, Wilms, and Hanna to plan your estate and properly leave your financial, sentimental and digital assets to your heirs in the way that makes the most sense for your particular situation.
- Wealth Counsel Quarterly SPRING/SUMMER 2020 “Estate Planning for Intellectual Property Rights”, Sarah Barton, JD & Jennifer Villier, JD