Whatever you create through either intellect or creative invention can be considered your property. You are fully entitled to protect intellectual property through various legal tools such as: copyrights, patents, and trademarks. You can protect everything from published or unpublished works of art to inventions, discoveries, trade secrets, software, books, articles, designs, and more. And all of these, if properly organised, can be passed from yourself as the initiator to beneficiaries as designated in your Will.
Intellectual property can encompass intangible assets that cannot be seen or touched because they do not exist physically or materially, but are original elements that have been mindfully innovated by a creator or inventor. For this reason, it is important to seek legal help when assessing intellectual property and intangible assets; usually this is done for the purpose of transferring them to others through the writing of a Will, and managing the revenue they may produce for the estate in the future.
Written works include novels, screenplays, poems, songs, artwork, photography, software, sound recordings, and films. Copyright belongs to the author as soon as the work is created, and gives the author the right to make and distribute copies of the original work, perform and display the work, and create derivative works based upon it. Posthumous publication of works may continue long after death of the author. In many cases, a literary executor will be appointed to specifically deal with publishing rights and income from the author’s body of work.
Patents apply to inventions and are usually related to the functional aspects of a product. However, design patents and plant patents related to industrial design, architecture, and engineering can also be registered.
This usually relates to business names, logos, or product names; anything related to the identification of your business. If you are a business owner, you or your business, may own registered trademarks for the name of your business, logos you have devised, or names for products. A registered trademark can last indefinitely as long as you continue using the mark and file maintenance documents on time.
Unregistered Trade Marks
It is generally accepted that common law rights in trademarks (trademarks that are used but not registered) form part of the goodwill of a business and are only transferable on the basis of its use to establish the business’s reputation. It is unclear whether the goodwill of an unregistered trade mark will transfer to an heir. This is one good reason to register your trademarks!
The importance of an intellectual property lawyer or financial advisor
Copyrights, patents, and trademarks, etc, live on after the innovator dies, and can be an important source of income for families. An intellectual property lawyer will need to decide whether the copyrights, patents, trademarks, etc, have expired or are legally able to be passed on to beneficiaries. Intellectual property can be an extremely valuable part of an estate, and therefore tax issues can arise. Determining the value of intellectual property can be a complex task. Legal and financial experts are able to guide individuals through evaluations, and devise beneficial tax strategies as they draw up their Wills.
A Will protects the value of your intellectual property
Like a bank account or family business, intellectual property must be managed correctly to maximise its value. If you don’t have a Will that specifies what should happen to your intellectual property, it will become part of your residual estate. This means it may not go to the person you intended, and may not be managed in a suitable manner that will protect and perpetuate its value.
Including intellectual property in your Will
- To include your intellectual property in your estate plan, you must first make a list of the intellectual property you own. Take this list with you when you meet with an estate planning lawyer. Keep a copy with your other estate planning documents. It can assist your heirs when sorting out things after your death.
- Decide to whom you wish to leave your intellectual property. Who or what is most likely to preserve and maximise the value of your intellectual property?
- How much is your intellectual property worth? You may need expert advice to properly evaluate and answer this question.
Will the intellectual property trigger additional taxes so that a special tax strategy is needed?
- You can’t see and touch intangible intellectual property, which makes it easy to forget when you’re developing an estate plan. But when you include your intellectual property in your planning you help to protect it, minimise tax liability, and maximise the value of your brain power’s innovation.
- Intellectual property can generate an income stream through licensing.
- If managed correctly, some forms of intellectual property such as trademarks, are also able to appreciate in value over their lifespan, much like immovable property.
- Similar to the legalities surrounding the inheritance of immoveable property, the heir designated to inherit should be recorded as the new proprietor in a relevant Intellectual Property register. The new proprietor’s rights may not be enforceable until this step is taken.
It is certainly worth considering how your intellectual property rights may devolve to your heirs. Taking the right steps now, such as registering unregistered rights or ceding unregistered rights expressly while alive, will ensure that transfer to your chosen heirs will proceed as smoothly as possible.
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