When most people think of estate planning, they think about tax issues, trusts, and passing along assets like investments, cars and houses to the next generation. Of course, those topics are at the heart of estate planning, but you can use your plan to address additional assets, too. Intellectual property is one of the non-traditional items you may want to incorporate into your plan.
What Is Intellectual Property?
Simply put, intellectual property (IP) is something you produce through creativity. IP includes inventions, books, poems, music, art, designs, symbols, names and images used in commerce. As the creator of such an item, the law gives you a limited monopoly over its use, enabling you to gain recognition or benefit financially from your creation. The most widely known types of IP are copyrights, patents and trademarks.
Professional Appraisal: Determining the True Worth
Before integrating intellectual property into your estate plan, a professional appraisal is not just advisable; it’s essential. Intellectual property, comprising patents, trademarks, copyrights, and trade secrets, carries a unique set of challenges when it comes to valuation. Engage experts who can assess the realistic, tangible value of your IP assets. This valuation serves as the foundation for informed decision-making throughout the estate planning process.
To Sell or to Include: Strategic Decision-Making
Once the true worth of your intellectual property is established, the next decision revolves around whether to sell these assets during your lifetime or include them in your estate plan. Each option carries its own implications, requiring careful consideration of your financial goals and legacy objectives.
Structuring Your Estate Plan: Keeping IP Out of Probate
Should you choose to include your IP assets in your estate plan, collaboration with your attorney becomes paramount. Together, you’ll strategize on how to incorporate these assets while keeping them out of probate. Common approaches involve utilizing legal structures such as Limited Liability Companies (LLCs) or trusts, providing a shield against the complexities and delays associated with probate proceedings.
Appointing a Knowledgeable Executor or Trustee
Recognizing the complexity of intellectual property, especially in the context of legal and ownership transitions, it’s prudent to name an executor or trustee with specialized knowledge of IP issues. This individual will play a crucial role in ensuring a smooth transfer of ownership, navigating intricate legal landscapes to preserve the integrity and value of the IP assets.
Future-Proofing: Considering Potential Value Increase
Intellectual property, by its nature, can experience fluctuations in value over time. Anticipate potential increases in value by incorporating a forward-thinking approach into your estate plan. Instead of assigning specific IP assets to individual heirs, consider distributing a percentage of your estate to each beneficiary. This ensures equitable benefits if the value of the IP assets appreciates, preventing an imbalance in the distribution of wealth among your heirs.
Transferring Ownership: Post-Mortem Considerations
In the aftermath of your passing, the intricate process of transferring ownership of intellectual property begins. Your estate plan serves as the guiding document, directing the seamless transition of IP assets to the individuals or entities named as beneficiaries. This phase requires meticulous attention to detail and adherence to legal procedures to safeguard the legacy you’ve worked hard to build.
In conclusion, integrating intellectual property into your estate plan demands a strategic, forward-thinking approach. By navigating the complexities with professional guidance, you can maximize the value of your legacy, ensuring that your innovative or creative contributions endure and benefit future generations. As the landscape of intellectual property evolves, a well-crafted estate plan becomes an invaluable tool for preserving your legacy in a dynamic and ever-changing world.
Get Help Incorporating IP Into Your Estate Plan
If you have trademarks, copyrights or patents to include in your California estate plan, make sure you work with an experienced lawyer who understands the complexities of IP and can call on experts to assist when needed. You’ll find that attorney here at the Law Office of Janet L. Brewer. Call 650-325-8276 or contact us online anytime. We are located in Los Altos.
