Literary Estate Planning
Novelists, Inc. Conference St. Pete Beach Oct. 2014
Copyright is for life of the author plus 70 years. You have physical assets as well as digital assets. Be aware that it can be a violation of federal or criminal laws for friends or family members to take over your online accounts. Think about what happens not only when you die, but also if you become disabled.
If you’ve done nothing and you die, the state will have an intestate succession. The statute says who inherits your assets. Your options are to gift your intellectual property, copyrights, and physical assets in your will.
Your literary attorney can work as a consultant with your family estate lawyer. If you grant items to people in your will, the recipient gets everything. Who can step into your shoes when the time comes?
An alternative is to set up a legal or corporate entity. An LLC, S or C Corporation are the options. The corporate entity could have perpetual existence. If the Corporation owns the copyright, it can affect the term of copyright.You could make your children the shareholders. But then they would run the company. Can they manage it all in agreement with each other? A third choice, and the best one, is to create a trust. You can separate the management from the revenue. The trust would be managed for the benefit of your beneficiaries. You can assign one person as trustee to manage the following, which are examples only:
Rights to hire editors and other ancillary help
Management of digital assets
Rights to negotiate contracts and subsidiary rights (as well as the right to refuse offers)
This allows your identity, as the author, to continue. The trustee does not have to be the beneficiary but then he should be compensated. There are tax consequences if the trustees are the beneficiaries. It’s also important for you to have an inventory. List your book titles, contracts, termination dates, agent information, revenue sources, and location of assets. Joint works need to be explained, and you should have a written agreement with collaborators. Consider contracts with cover designers. Do you own the covers to reuse as desired?
In a trust or will, it shouldn’t be so detailed as to list individual titles. It should be broader and more encompassing to cover intellectual property. Authorize the trustee to hire an agent, formatter, publicity person, cover designer, etc. Set up a procedure for beneficiaries to select new trustees so the trust can continue.
Any publisher will freeze your account upon your death. The executor needs to provide court documentation that he is authorized to collect money. But for digital property, this might not work. Federal laws make it difficult for a third party to take over your digital accounts. Only nine states have statutes to deal with this issue. So appoint a person in your will or trust to access and manage your digital accounts. You’ll also want a power of attorney in case you are disabled.
Put the bank account where your royalties go into your trust, and put the trust name on the bank account. For a DBA, put this in your will or trust as an asset to be passed on.
If you donate your materials to a library or school, talk to them to make sure they have adequate resources to preserve your collection.
Note: Any errors in this article are due to my interpretation. This post does not constitute legal advice. Please consult your own literary attorney for your personal situation.
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