New York Estate Planning & Elder Law Blog
Celebrity assets left without a will or formal testamentary estate document are increasingly of interest to both estate and intellectual property law practitioners. Example is the estate of the late Singer, Aretha Franklin. Otherwise known as the “Queen of Soul,” the estimated $80 million estate involving the value of the artist’s artistic copyright and the trademark of her celebrity, has been embroiled in ongoing legal dispute over permissions to her name, work, image, and likeness within commercial publicity. Of the estate’s intellectual property which has been contested in litigation over publicity rights, a significant portion of those assets has been recently subject to taxation.
Merchandising Rights of Publicity
Trademark and copyright law allow for estate administration of port-mortem rights to publicity associated with intellectual property assets. For purposes of valuation, the image, likeness, or representation of an artist or celebrity is an asset. Merchandising rights entitle a copyright or trademark licensee to derive future value from those assets, based on strategic performance estimates of a publicity campaign. Celebrity publicity valuation is complicated by publicity placement, as well as the cost of trademark permissions. Request for use of a copyright or trademark for publicity requires legal agreement. Terms and conditions to publicity agreements generally include a royalty clause, specifying a percentage based on an estimate of the future streams of income to flow from the use of a celebrity’s work or image.
Special Conditions
The case of Aretha Franklin also exhibits the “special conditions” of celebrity estate property defined under intellectual property laws. Valuation of postmortem right to the proceeds from publicity can involve consideration of the value of a celebrity image across different segments of the marketplace. “Special conditions” where an artist is renowned in stature (i.e. Franklin was a civil rights activist and the first woman inductee of the Rock and Roll Hall of Fame). Comparable fair market value of estate rights to royalties and other monies from copyright and trademark permissions agreements (i.e. Michael Jackson Estate) where the courts and the U.S. federal Internal Revenue Service (“IRS”) are concerned.
Publicity a Taxable Asset
Valuation of IP rights of publicity should include IRS taxable reporting of any income an estate receives as result of permissions for use. Any discrepancy between income reported by an estate fiduciary, and the value of that income assigned by the IRS, will inevitably lead to audit. Celebrity estates not reporting income from royalties and other permissions related contracts may be subject to review by the Tax Court.
IP Rights, Fiduciaries
The IRS and USPTO recognize that right of an estate to provide permissions for use of a decedent celebrity’s image, likeness or representation in exchange for income where allowed under law. In cases where an artist or other celebrity has not named heirs or beneficiaries in a will, and the decedent has also died domiciled in a jurisdiction that does not recognize the post-mortem right of publicity by estates, without sufficient legal counsel the estate can be compromised.
Anticipating publicity rights requests? Ask an attorney at law about protecting the intellectual property rights of an estate.
Estate Law Attorney Practice
Ettinger Law Firm is a licensed New York attorney practice specializing in estate planning and probate litigation. Contact Ettinger Law Firm to schedule a consultation about an estate law matter involving copyright or trademark of a celebrity name.
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