The integration of “intellectual property” (IP) laws within estate planning legislation, protects estate owners of copyright, patent, and trademark assets. In the past few decades, the statutory evolution of IP laws reflects the remarkable expansion of innovation. The integration of IP law within estate laws, serves to protect the IP rights of artists, authors, and inventors, as well as the heirs and beneficiaries gifted these special assets as part of their inheritance after a decedent owner of the original work passes. In a circumstance of “no will” estate probate, intellectual property rules guide decisions regarding the division of IP assets.
Estate transferred intellectual property assets are subject to contract rights. The statutory heirs of an estate with IP ownership also retains the right of termination as part of its administrative right of inheritance. Rules of termination for copyrights, for example, require a 5-year period, after thirty-five years from date of execution, 17 U.S.C. §203(a)(3)-(4). Royalties, registration, or taxation can influence an estate executor’s or trustee’s decision to contract, sell, or terminate an IP asset.
An estate owning the licensed registration of an IP asset can evidence rights to fair use in court. The United States Patent and Trademark Office (USPTO) registered licensing of intellectual property, ensures the originator of the work can control the usuary from contractual agreements permitting use of the creativity or invention by a third-party. Estate transfers of artistic works or technological innovations can assert “ownership” authority in agreements permitting third-party exploitation of IP licensing in exchange or royalties or other payment.
The inclusion of IP assets in a Will written prior to the death of the originator or owner of the work, is possible by way of transfer. Testamentary bequests and lifetime transfers are options for intellectual property registrants planning an estate. Estate or trust transfer of intellectual property rights at the bequest of the owner can also be performed in a written testamentary estate planning document. Bequests are generally made for transfer of material personal assets and real property. An estate can also be structured to designate the disposition of IP assets separately within a “residuary estate.” In the latter form of bequest, the distribution of the value of those assets among an estate’s beneficiaries is divided equally, rather than designated.
Rules of Intestacy provide that where there is a “no will” estate, intellectual property is transferred to heirs under law. In some states, rules of intestate secession guide transfer of a Decedent’s estate assets to the administrator of the estate advance of final transfer to beneficiaries. In all states, surviving spouse are accorded direct transfer of a deceased spouse’s estate, including IP assets. The same laws stipulate the rules for transfer to children where both parents are deceased. Siblings are generally assigned their intestate portion of an estate’s assets, including intellectual property if no parents are surviving a child’s death.
There are also a range of intestate secession rules for transfer of estate assets to surviving relatives should there be no spouse or children.
The presence of USPTO registration of a copyright, patent, or trademark establishes an estate’s rights to usuary based on licensed agreement. A key consideration when drafting a Will, IP works are valuable assets with potential for fungible transfer of royalties and other payments depending on fair use agreement. An estate is also responsible for any maintenance costs associated with a registered work. If in probate, estate’s fiduciary may be obliged to file USPTO documentation to transfer the registered IP asset to a new owner. Planned giving professionals involved in transfer of IP assets to a nonprofit charitable giving plan, will benefit from finding out more about the rules binding intellectual property asset gifts.
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Estate rights to a patent, copyright, or trademark as result of testamentary bequest or lifetime transfer protect inheriting heirs’ rights to usuary and royalties in a probate case.
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