Generally speaking, the more comprehensive your estate plan is, the better for your beneficiaries. Most people tend to think of assets as houses, cars, jewelry, etc. But in some instances, intellectual property could also be considered a transferable asset. Patents, trademarks, copyrights, even rights of publicity are intangible assets that should be factored into an estate plan for smooth handling.
Patents
The United States Patent and Trademark Office (USPTO) assigns patents to designers and inventors to protect newly invented technology, processes, machines, products, and more for specific periods of time. For example, utility patents are protected for 20 years, while design patent protections extend 15 years from their date of issuance.
When a patent owner dies, the patent rights pass on to the estate just like other assets and continue to be protected throughout the remainder of the patent term. The beneficiaries can then continue to maintain the patent by applying for renewals and managing any lawsuits or infringements.
Like other assets, patents (and patent applications) can be transferred to a trust, which avoids any probate proceedings. When assigning a patent to a trust, a document explaining the ownership transfer must be recorded with the USPTO.
Trademarks
Like patents, registered trademarks are typically transferred to the estate if no other provision has been made. Trademarks can be registered at the state or federal level, though in some cases, a trademark that has not been formally registered may still be protected by common law, particularly when distinguished geographically in the marketplace.
Trademarks can be provided for in a will, or can be handed over to a trust. Like patents, the USPTO needs to be notified if a trademark has been assigned to a trust. It’s recommended that a written trademark license agreement be implemented to ensure proper usage of the mark. If the trustee, or heir, does not control the usage of the trademark appropriately, protections could be lost.
Copyrights
Copyright protection extends as long as the creator lives, plus an additional 70 years after their death (for works created on or after January 1, 1978), though there may be some exceptions to that rule. For works created anonymously or under a pseudonym, protection lasts for either 95 years from the first publish date or 120 years after its creation, whatever comes first.
If the work has been licensed or transferred, that agreement is not affected by the creator’s death, as the license holder can continue to use the rights until the copyright term or the agreement terms expire. A provision in the will can dictate specific usage requirements for copyrights.
Name, Image and Likeness (Right of Publicity)
In some circumstances, the estate can inherit the right to control commercial use of a person’s name, image and likeness – which can extend to voice and signatures as well. However, there are variations by state that control the duration and scope of these rights.
The right of publicity is considered an asset that can be valued for federal estate tax purposes, based on the fair market value at the person’s date of death. Thus, an estate plan should consider what future market value will be and develop strategies for minimizing the tax or funding the estate to cover the potential tax.
Ownership and management of the right of publicity can be transferred through contracts or licensing agreements, and should be addressed in a comprehensive estate plan.
Seek Experienced Guidance
Because the transfer of intellectual property can be nuanced and affected by multiple details, it’s extremely important to speak to an estate planning expert who can create a robust estate plan that ensures all of your IP interests are covered. At Wills & Wellness, we work with you to design and strategize a plan that protects your assets and your beneficiaries.