Trademarks, copyrights, patents, and trade secrets – all examples of intellectual property, an intangible personal property for purposes of estate planning.
Trademarks: Branding can be an important part of the success of a business or product and the same can create good will associated with the brand that can be vital to the marketability of a product or service offered by the company. Business succession planning will normally encompass the passing of any branding and trademarks associated with the business. Properly passing your interests in a trademark is important to business continuity moving forward.
Copyrights: Copyrights created after 1978 are valid for the life of the author plus 70 years – which means that a copyright could outlive both the author and his direct heirs. Works for hire – those made specifically for a company – are valid for 95 years after the first publication date to 120 years after the work is created. But, passing on the work itself is not the same as passing the copyright. The will, trust, or other planning document will have to specifically pass the copyright to the work. It is entirely posible for someone to pass the work to one heir and the copyright to another, so the instrument must be clear what interest is being passed. This can be very important because the owner of the copyright controls the right to create related works (books, movies, TV shows, etc.) based on the original work.
Patents: Design patents are valid for 14 years from the issue date, while utility patents are valid for 20 years from the filing date. Patents can be owned by individuals or companies. In the case of the latter, it’s the stock certificates or membership interests in the company that needs to be transfer to control the patent as well as receive the income generated from the patent.
Passing on intellectual property rights can be very valuable to your heirs, especially those inheriting a business or business interest. Make sure it’s done properly to protect your family’s future success.