Understanding how to secure your intellectual property as part of your legacy has become increasingly important in this digital and globalised era. From authors and inventors to entrepreneurs and designers, more individuals are generating valuable intellectual assets that may have enduring financial and cultural value long after they are gone. Yet, many fail to consider how these assets fit within their estate plans. Ensuring these rights are protected and correctly transferred requires foresight, strategy, and often legal support.
Intellectual property (IP) includes creations of the mind: inventions, literary and artistic works, designs, symbols, names, and images used in commerce. In the eyes of the law, these creations are assets—just like real estate or stocks—and therefore can, and should, be included in estate planning. This article explores why intellectual property should be addressed in your estate, the steps involved in protecting it, and how to navigate the common pitfalls that might compromise the value and transfer of these unique assets.
At its essence, IP is an umbrella term for a diverse set of non-physical property types. The primary categories include copyrights, trademarks, patents, and trade secrets:
– Copyrights protect original works of authorship such as books, music, films, software, and architecture.
– Trademarks cover distinctive signs, logos, sounds or even colours that distinguish products or services.
– Patents grant inventors the exclusive right to make, use, or sell their invention for a certain period.
– Trade secrets consist of confidential information that gives a business a competitive edge.
Each form of IP has differing durations, enforcement mechanisms, and value prospects. For example, copyright typically lasts for the life of the author plus 70 years, offering potential income for multiple generations. Patents, in contrast, usually last for 20 years from the application date.
Understanding the scope and significance of your IP assets is the first step to ensuring they are handled correctly after your passing. Valuing these assets is not always straightforward, especially for assets like unpublished manuscripts or early-stage patents, but identifying them is a vital starting point.
An estate plan that addresses IP begins with a comprehensive inventory. This inventory should include registered and unregistered IP, documenting where appropriate registrations can be found, dates of protection, and details of ownership—important in cases where IP rights have been assigned, jointly held or licensed out. This might include:
– Copies and registration certificates of copyrights
– Trademark documentation including design evidence and usage timelines
– Patent numbers and ownership assignments
– Agreements or licences involving the IP
– Details of royalties or incomes derived from the IP
It is also important to understand whether any rights are held individually or through a corporate entity, as this affects succession. If you own part of a company that holds a trademark or patent, your stake in the company may be the relevant asset rather than the IP proper.
Many IP assets fall into legal grey areas when documentation is missing or ownership is disputed. Avoiding these pitfalls means being proactive while still alive. Gifted rights, multiple collaborators, and outsourced creative or technical contributors can all pose challenges. For example, while you may have commissioned a freelance designer to create your business logo, if no written contract transfers the rights to you, then you might not legally own it.
Verifying ownership means reviewing all relevant agreements to ensure correct IP transfers were made. This includes contracts with co-authors, freelance workers, co-inventors, or joint business partners. The estate executor might otherwise be left dealing with complex or unenforceable claims that reduce the overall value and increase the cost of managing the estate.
Documenting ownership, usage rights, and licence agreements creates a more straightforward process for successors or agents charged with administering the estate. It also helps avoid litigation by clarifying usage rights for heirs.
Once identified and documented, IP assets should be explicitly included in your estate plan, typically via a will or, where appropriate, a trust. Including these assets avoids the risk that they fall into intestacy (i.e. unplanned distribution), which can delay or undermine beneficial use by heirs.
Your will should:
– Designate the specific IP assets.
– Name a beneficiary or beneficiaries for each IP asset.
– Appoint a knowledgeable executor or trustee capable of managing IP.
However, simply bequeathing IP in a will is not always sufficient. For example, IP like copyrights or trademarks still require ongoing management, potentially for decade’s worth of royalties, renewals, enforcement or licensing. A trust may be better suited in particular cases, especially where the IP generates income for multiple heirs or where the creator wants better control over how and when the IP is used or monetised after death. Trusts also offer more privacy and are less susceptible to public probate litigation.
Think carefully about who is best placed to manage these assets. Artistic heirs may be suitable to continue copyrighted work or review publication plans, while business-savvy beneficiaries may be better for commercial IP such as patents or trademarks. Selecting someone without the necessary knowledge or interest may impair the long-term value of these assets.
Assigning appropriate value to IP is a key part of estate planning and can impact inheritance tax calculations. In the UK, for instance, inheritance tax is levied at 40% on estates above a certain threshold. IP assets can significantly increase the total estate value and therefore must be considered for tax liabilities.
Valuation can be complex and is usually done by a professional with expertise in the particular type of IP. This may include analysis of:
– Previous income or royalties generated.
– Projected future income streams.
– Market comparables.
– Legal position (e.g. enforceability of the rights).
It’s also possible to take advantage of tax planning strategies, such as gifting IP rights before death (though this has implications if you continue to earn from it), using business property reliefs, or placing IP into a trust to delay or reduce tax exposure. An accountant or tax estate specialist should be consulted early in the process to avoid adverse consequences.
Unlike other assets that are one-and-done transfers, IP can generate income through royalties and licensing for decades, especially for writers, musicians, and inventors. Estate plans need to account for:
– Who should receive income – for instance, children or charitable causes.
– How collected royalties are to be managed or reinvested.
– Who is to be responsible for negotiating licences or renewals.
A key consideration is how receivers of royalties will uphold and maintain the asset. Failing to renew trademarks or patents, or not defending against copyright infringement, can erode value sharply. Therefore, empowering the estate or trust administrator with clear guidelines and perhaps working with a publishing agent or IP manager can help preserve the income potential.
Tracking royalty sources and establishing systems for their continuity—such as collection societies or existing contracts—is critical. Ensure contact details, contract statuses, and login credentials for relevant accounts are all documented and accessible to the executor.
In today’s digital age, IP rights often extend across global lines. Books published digitally, apps on international platforms, or trademarks registered in multiple countries involve different jurisdictions, expiry rules, and enforcement mechanisms.
Estate planning should include a review of international IP holdings and what local laws may require. Some countries have tighter constraints on the transfer of copyrights. You may need counterpart legal advisors in those countries to help ensure compliance and proper legal transfer.
If your IP is registered abroad or generating income in other currencies, you’ll need to understand foreign inheritance laws, currency tax implications, and how probate processes differ. In many cases, seeking legal advice with cross-border IP or estate planning experience is sensible.
With the internet’s growth, more people now possess digital intellectual property. This includes blogs, YouTube channels, NFTs, social media content, online courses, and more. Many of these are monetised or carry value in brand identity, business following or commercial leads.
Including digital IP in estate planning is an emerging and increasingly critical practice. Consideration needs to be given to:
– Access to passwords, digital wallets and publishing platforms.
– Legal rights over content with third-party platforms.
– Monetisation agreements with platforms like Amazon, Apple or YouTube.
– Succession planning for retaining or closing digital accounts.
Digital estate plans generally include a digital assets inventory and clear instructions for trusted individuals to access, manage or archive digital works. As legislation and platform policies often lag behind technological change, clear documentation on your wishes and access rights becomes even more vital.
Several common pitfalls can undermine the value or correct transfer of IP in an estate. These include:
– Failing to identify or record all IP.
– Out-of-date wills that omit recent IP developments.
– Poor selection of beneficiaries for complex IP.
– Legal errors in copyright transfers.
– Tax miscalculations or missed deductions.
– Overlooking digital content.
Planning ahead, keeping meticulous records, seeking legal and financial advice, and updating your estate plan periodically, especially after launching new works or registering fresh IP, are all essential steps in avoiding complications down the line.
The era where only the ultra-wealthy or famous had enduring intellectual property legacies is over. Today, a broad swathe of people holds copyright, design rights, patents, and digital assets with potential long-term significance. Ensuring these are properly included in your estate means treating them with the same serious attention as traditional assets.
From identifying exactly what you own to establishing who should inherit and oversee that value, estate planning for IP is a multi-layered but increasingly essential task. With professional support and careful preparation, you can help ensure that your creative or innovative legacy benefits not only your beneficiaries but continues to contribute to the world well beyond your lifetime.
Securing your intellectual property within your estate plan isn’t just a legal formality—it’s a way to preserve your legacy, support your heirs, and ensure your creative or entrepreneurial work remains impactful and protected. Whether you’re an artist, inventor, or content creator, taking proactive steps now can make all the difference for future generations.
Privacy Policy
Terms and Conditions
Disclaimer
COPYRIGHT © 2024 MY WILL AND PROBATE
