The World Intellectual Property Organization defines intellectual property as “creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names, and images sued in commerce.” Typically, intellectual property is protected by legal mechanisms such as patents, trademarks, and copyrights that help people achieve and maintain recognition and financial benefits from things they have created. While intellectual property has many specific laws to help govern it and some attorneys choose to focus their practice on intellectual property law, intellectual property is personal property and can be an important part of comprehensive estate planning.
Distributing Intellectual Property
There are several considerations that come into play when determining how to distribute intellectual property. For some people, intellectual property can be the main source of their financial livelihood. Others may have inherited or otherwise acquired certain intellectual property rights throughout their lifetime and use them for supplemental income purposes. Regardless of the way in which you came to possess intellectual property, if you want to continue benefiting from it then you can and should keep personal possession of it until you no longer depend on or desire the income from it. If you do maintain control over intellectual property, make sure that you have provided for its distribution in your estate planning in case of unforeseen circumstances.
When engaging in estate planning for intellectual property, make sure that you consider the period of ownership that you are entitled to. This will be important when you determine who to pass the rights to. For instance, if you have a trademark as part of your intellectual property portfolio, the registration for that trademark typically lasts for 10 years if the trademark remains in use in some way. This 10-year period is renewable indefinitely, but passing along a trademark through your estate requires that whomever you are bequeathing it to take action to continue renewing the trademark and you will want to make sure they understand this and can comply with it.
Patents have various periods that they are in effect for depending on the type of patent. Copyrights, depending on whether they are owned by an individual or a company for whom an individual works, can remain in effect for over 100 years depending on their circumstances. It is also important to remember that intellectual property will not benefit you or anyone else if you or the heir you choose to receive it does not enforce the legal rights attached to it against those that may try to infringe upon it. This may require you or your heir to maintain a relationship with an intellectual property attorney, and you want to be sure whoever holds the rights is willing to enforce them.
There are also potential tax consequences related to intellectual property rights. Depending on their value, they may be subject to gift taxes or estate taxes. Determining what tax consequences, if any, might accompany the transfer of your intellectual property will help you decide what vehicle to use in distributing them.
The Importance of a Detailed Will
A detailed, specific Will is an essential part of comprehensive estate planning. This is especially true with intellectual property rights. When you die without a Will, New York allows state courts to determine how to distribute your estate based on New York’s intestate succession laws. However, if you do not specify to whom you want to distribute your intellectual property rights, then the state may group all your property together and distribute it to your heirs according to statute. While your intellectual property rights will transfer to an heir, it may not be the person you want it to be.