Intellectual property such as computer programs, patents, copyrights, and trademarks create unique issues when planning for the estate of a creative entrepreneur. What will happen to the patent? Who will get the rights to the book? These are questions that must be answered by every creative considering their copyright is likely to last a lot longer than they do.
What about the emerging world of social media and its impact on intellectual property? When you see individuals making thousands of dollars each day from their Instagram account, they’ve clearly tapped into something that they need to protect. What about the Facebook entrepreneur who has amassed a following that has been monetized into a cash flow positive business? How do you plan for these business owners?
First, a creative entrepreneur should make sure to choose professionals who understand that business today is happening in ways never imagined even ten years ago. Digital venues such as Facebook, Instagram, Snapchat, and Twitter are changing the way goods and services are marketed and provided to consumers, and savvy entrepreneurs are seizing the opportunity to leverage their understanding of the digital space to build businesses with valuations into the billions. The digital community is not going to stop evolving any time soon.
The planning needs of creative entrepreneurs such as authors, computer programmers, artists, and musicians are unique primarily because of their constant state of evolution; and the assets they create have the potential to continue to support their loved ones for generations to come. A trust must be properly designed to hold copyrights, art, and other intellectual property in a manner that facilitates the continued change. Furthermore, there may be certain assets that must be conveyed with a will as opposed to being placed in trust based on the Copyright Act. A failure to consider these limitations could have unintended tax consequences.
Consider this quick checklist when discussing the long-term planning of your intellectual property:
- Insure all assets are properly registered and protected by the owner. Keep good records of ownership of the copyright or patent. Don’t assume they are clearly registered with the appropriate authority.
- Understand the valuation of the asset. How much is your self publishing empire really worth? You should consider this question early on because it could have an impact on the tax ramifications of your estate.
- Insure the assets are protected long-term. Consider a literary trustee or an industry professional who can act in a fiduciary capacity to insure the long-term protection of your creative legacy.
- Understand the tax ramifications of conveying the asset. Always consider the taxes.
These and other issues are critical considerations every creative entrepreneur must consider when planning their estate. The estate planning attorneys at Smith Simmons are prepared to assist you in maximizing the value of your creative assets for generations to come. Contact us today.