No one likes to think of their own demise, which may be one of the reasons many people put off creating estate documents until very late in life. Usually when they finally get around to planning their estate, they tend to focus on physical assets — investments, real estate, jewelry, family heirlooms, money, etc. But what about intangible assets? Perhaps you have authored articles, possess trade secrets, created a brand for your business. To protect your ideas and creations, these need to be identified as intellectual property and included in your estate plan.
Intellectual property is defined as an invention or work that is the result of your creativity, such as a design or a manuscript. In order to protect the rights to your documents or creations you have or can apply for a copyright, patent, trademark, etc. Even though you may not be a successful or famous musician, inventor or author, you may still possess intellectual property rights. An estate planning lawyer in Sacramento CA can aid you with your questions.
Examples of intangible assets that may be protected and should be included in your estate plan are:
- Software code
- Books, articles, blogs, content for the web
- Sheet music
- Musical recordings
- Trade Secrets – protected forever if their secret is not revealed
If any of these have been copyrighted, the rights last the entire lifetime of the creator plus an additional seventy years. These copyrights need to be incorporated into the estate plan and structured so that the heirs can possibly retain these rights.
Inventions are protected with a patent. Utility and plant patent rights are created for twenty years. In order for the patent to remain in place, there are maintenance fees that are assessed periodically. The patent rights prevent anyone else from manufacturing or selling the services and products listed in the patent. If the estate’s recipients are not going to use the rights, the license to the patent can be transferred to a third party and the heirs may be able to receive any royalty associated with the patent.
An intellectual property attorney along with an attorney along with an experience estate planning attorney can discuss the legalities and particulars of any copyrighted intellectual property you may have and include that in your estate plan. They will ask you to designate a recipient for the intellectual property. This may be a different executor than for the balance of your estate and may be more familiar with the copyright laws and in particular your copyrighted intellectual property.
Using a living trust that at death is transferred may avoid going through probate and should be considered for the intellectual property. In addition, if the grantor is unable to manage his own affairs and becomes incapacitated, the intangible assets can be managed by a designated appointee. Another way to handle the transfer of ownership of the intellectual property is to convey rights to a corporation or LLC. This may make for an easier transfer, possibly retaining any current management.
It is important to connect with an intellectual property lawyer to work with the attorney that handles your estate plan to ensure the documents are drawn up correctly and the inventions or documents created by you will be protected after you are gone.
Thanks to our friends and contributors from Yee Law Group for their insight into estate planning.