When it comes to transferring wealth through estate planning, a few things may come to mind: houses, possessions and money. But in the case of creatives like authors, artists or inventors, intellectual property is another aspect of that wealth.
It is important for anyone with this intangible property to consider exactly how they want to transfer those rights.
Types of IP protection
As the World Intellectual Property Organization describes, it is the exclusivity of an IP asset that gives it its value. This exclusivity takes the form of several types of legal protection including copyright, patents and trademarks.
Types of IP transfer
Transferring these protections requires different steps depending on the type. Wills and trusts act as essential tools to shift copyrights, patents and trademarks from the author’s hands to his or her beneficiaries.
Wills help describes who gets the rights to the IP and the wording of a will may help adjust particular terms on how beneficiaries divide it. As Wealth Counsel details, United States copyright law protects works until entering the public domain. Depending on how estates handle this, it may mean a value-producing IP for 95 years from the artist’s first publication or 120 years from its creation.
Trusts also allow for IP assets to have the protection and detailed transfer instructions they need to remain in the hands of beneficiaries.
Another option for some IPs is a lifetime gift. This is often the simplest transfer strategy, though it may not protect against taxes from the substantial appreciation of that IP’s value.
IP rights are valuable to loved ones not only because they once created value, but because of their potential to continue creating income long after the original creator’s passing. It is important for anyone with IP like this to make sure it goes to the people they want it to.