Estate Planning and Intellectual Property Assets: Valuation, Transfers, Taxes, Strategies for Counsel

For some taxpayers, IP assets – such as copyrights, trademarks, patents, and the right of publicity – have significant value. Taxpayers who own valuable IP face specific estate planning and compliance challenges.

From a planning perspective, taxpayers want to ensure that ownership of IP assets and their related income streams are managed efficiently and productively and that the benefits are passed on to family or other designated beneficiaries. Wills and trusts are critical tools to ensure IP is transferred to the right people, at the right time, in the right way and the strategic use of LLCs or other legal entities can help to organize and manage IP and facilitate tax efficient transfers of rights. However, because IP assets are given unique treatment under the law, standard planning techniques may not be enough to ensure the owner’s intentions are carried out.

From a compliance perspective, estates want to be sure they establish defensible and accurate valuations as a basis for ownership transfers and for paying estate taxes after death. Valuing IP assets has its own unique challenges and has been subject to significant scrutiny by taxing authorities in recent years. Indefensible or inaccurate IP valuations can generate significant costs as a result of having to participate in litigation and/or paying penalties due to values that are found to be below fair market value.

Trust and estate attorneys must understand the unique issues associated with IP assets, and how they are valued, when advising their clients prior to or after their creator’s or owner’s death.

Listen as our experienced panel provides practical guidance on the unique challenges and benefits of structuring estate plans for intellectual property rights owners.