When Intellectual Property is an Estate Asset
Intellectual Property, or IP, rights are protected in a variety of ways—through federal laws that protect copyrights, patents and trademarks. These are used by authors, artists and inventors to protect everything from published and unpublished literary and musical works to inventions and visual art. If you are the owner of a business, your IP assets might include the logos and slogans that are part of your business’ brand.
The Sabetha (KS) Herald’s article, “Estate planning for intellectual property,” suggests that, initially, it is important to determine whether the intellectual property can be passed down to your heirs. Some types of intellectual property may have renewal or termination rights, which can create questions as to when intellectual property right owners elect a second executor to handle intellectual property issues in their estates. In addition, the valuation of intellectual property is a challenge for estate planning.
Estate tax impacts those with substantial assets, regardless of the type of property included in the estate. Similar to an executor being forced to sell a family vacation home to pay the estates taxes, a well-known author may worry that future publication rights to unpublished works will need to be sold in the same manner after his or her death.
Proper estate planning is critical to make certain that the decedent’s wishes are carried out. One idea is a life insurance policy purchased and owned by an Irrevocable Life Insurance Trust (ILIT). If structured and administered correctly, an ILIT can provide cash at death to help satisfy obligations like estate taxes. It can give some flexibility to an estate with only a small amount of liquid assets.
Where IP law meets estate planning is a complex area of the law. To ensure that your IP assets are as well protected as other assets, you will want to work with an estate planning attorney with knowledge of these two areas of the law.
Reference: Sabetha (KS) Herald (August 24, 2016) “Estate planning for intellectual property”