Are you an inventor, an author, artist or the owner of a closely held business? If so, you may have already taken action to secure your intellectual property rights. Certain types of intellectual property—like business ideas, visual art, published or unpublished literary and musical works, inventions, computer programs, clothing design and architecture—may be protected by federal law through copyrights, patents and trademarks.
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sell a family vacation home to pay the estates taxes, a well-known author may worry that future publication rights to unpublished works will need to be sold in the same manner after his or her death.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.
Estate planning for intangible assets like intellectual property has many complicated considerations. Make sure to speak with a qualified estate planning attorney to help ensure the ultimate distribution of your assets according to your wishes.
Reference: Sabetha (KS) Herald (August 24, 2016) “Estate planning for intellectual property”