It’s hard enough to decide who should be the executor or trustee of your estate under ordinary circumstances, but what should you do if you are a published author, composer, or artist?

Estate Basics

When you die, you leave an “estate”, which is the property that you own in your name. Estates typically include real property (houses, etc.), personal property (jewelry, furniture, mementos), and intangible things like bank accounts, cash, stocks and bonds, and business interests.  To determine what should happen to the things that you own when you die, the most common instrument is the Last Will and Testament, or a Will, which enables you to designate an executor and direct them what to do with your estate.

If you wish to avoid probate court, you may choose to use a revocable or living Trust. Or, if you are looking to protect your assets from nursing home costs or future creditors for you or your beneficiaries, perhaps you would consider an irrevocable Trust.

But what if you are a creative person who has original works of authorship (i.e. literary, dramatic, artistic, and musical works that you created) that are generating royalties? Or what if your name is reputable because of your creative works, and you want to protect that legacy after you die, what should you do?

Copyright Basics

In the United States, intellectual property interests exist under the US federal copyright law, which has a unique provision designed to protect individuals with original works of authorship. With origins in British law, the US federal copyright law was first established in 1790, with significant amendments in 1976. It was the 1976 act that the length of a copyright term was extended to “…either 75 years or the life of the author plus 50 years,” and to 95 years after publication (120 years after creation for unpublished works), or the life of the author plus 70 years, whichever ends earlier for works created for hire.

Because the future value of a copyright is impossible for the author to predict, copyright law gives authors a future right to terminate some transfers or licenses. This gives a new opportunity for artists to market the work for a better price once its fair value is known. The rationale is that some authors or creators may be taken advantage of during their lifetime or while they are young and enter licensing or transfer deals that don’t fairly compensate them. This right to terminate cannot be waived or transferred to anyone else during the author’s life. And when an individual with original works of authorship die, the termination right passes to the author’s statutory heirs (unless designated otherwise in a Will), which allows them to terminate a prior transfer of copyright under some circumstances.

Termination Rights in Estate Planning

So, with this in mind, what should a creative do when planning their estate?  The answer depends on whether you are using a Will or a Trust, or if you set up a legal entity or company to hold and administer your future copyright rights. If the author uses a living Trust to direct the administration of their copyright rights, it is possible that the statutory heirs could undo the author’s intent after they die.

But if the author chooses to use a Will to establish a testamentary Trust (meaning a Trust that comes into being after they die), doing so prevents the author’s intent from later being terminated by statutory heirs.

Who Administers Copyright Rights After Death?

To determine who will have the authority to administer copyrights after death, when using a Will, the creative would name a literary executor, which should be someone separate from the general executor.  The literary executor should be an individual with the capability to properly administer copyright rights into the future. The Will would also identify who would benefit from the exploitation of the rights, and like any other asset in a Will or Trust, can be designated by the author to heirs, friends, family, charities, or anyone that the creator prefers.

The literary executor would be responsible for the administration of the rights, and as such, is considered a fiduciary under the law.  They are entitled to be paid for their work and are expected to perform their work in care for the beneficiaries. They should be someone who has specialized knowledge and experience in your industry and be comfortable with copyright license contracts, and know when they need to hire an entertainment lawyer to ensure the best protection. They also should have a clear understanding of your values, preferences, and personal wishes.

An essential consideration in doing this critical estate planning is not just to maximize the cash value of copyrights and their future exploitation, but also to protect the reputation of the creator, and to ensure that the copyrights are NOT used in the future in a manner that the creator would abhor.

Conclusion

If you are an artist, playwright, poet, novelist, composer or other creative type, don’t leave these important decisions for the last minute or worse, fail to make them at all. If you do not have a carefully drafted Will or a valid Trust, you are leaving the ownership and future exploitation of your works to chance.