Estate Planning for Creators of Intellectual Property

Taxpayers who have significant self-generated intellectual property assets, such as copyrights to artistic or literary works, trademarks, and service marks or patents, face specific estate planning challenges in ensuring that ownership of these assets and their related income streams are passed for the benefit of family descendants or other designated beneficiaries. Planners serving these clients must understand the intersection of the Internal Revenue Code and the Copyright Act in structuring estate and trust documents to efficiently transfer to beneficiaries after the death of their creator.

Estate planners must ensure that any copyrights held by the author or artist are correctly registered and meet the criteria for the client to pass his/her rights on to others. Additionally, the Copyright Act specifies assets that can only be transferred by will; planners must identify those assets and structure will documents to avoid unintended tax consequences.

Understanding valuation of future royalty streams from intellectual property is also a must for estate planners serving clients who have IP rights in their self-created assets. By utilizing LLCs or other incorporated vehicles, planners can minimize tax through documenting valuation discounts upon transfer of assets to these vehicles.

Listen as our experienced panel provides practical guidance on the unique challenges and benefits of structuring estate plans for authors, artists and other creative personnel.

1. Introduction/overview
2. Intersection of Internal Revenue Code and Copyright Act
3. Areas of an author’s business that must be covered by a will
4. Literary trustee duties
5. Foreign considerations for copyrights held by estates and trusts
6. Trademarks and service marks
7. Patents
8. Structuring trusts and LLCs

The panel will review these and other key issues:

• Types of assets that must be passed down via a will under Copyright Act provisions
• Structuring an LLC in conjunction with a trust to hold intellectual property assets
• Best practices for utilizing valuation discounts
• License vs. sale and valuation considerations