September 29, 2022
Estate planning is the process of deciding how your assets will be managed and distributed if you become incapacitated or die. Traditionally, this process focuses on how tangible assets like bank accounts, investments, real estate properties, cars, and other valuable assets will be distributed. However, intellectual property rights owners must also consider what will happen with these intangible assets when they pass away. If you are looking for guidance on estate planning for intellectual property, Mindful Counsel’s team of dedicated estate planning lawyers is here to help: contact us today at (480) 422-6246.
Intellectual property is a broad term that describes creations of the mind, including inventions, artistic works, designs, or branding components used in commerce. These creations are considered intangible (non-physical) assets, as opposed to tangible assets like real estate properties or investment accounts.
These intangible assets have financial value, and thus often require legal protection. This protection is obtained through intellectual property rights, which the World Trade Organization defines as “the rights given to persons over the creations of their minds.”
There are four main types of intellectual property (IP) rights and all of them can have significant value. Individuals who own any of these forms of intellectual property should make sure to include the IP rights as part of a comprehensive estate plan.
Trademarks offer legal protection for words, phrases, designs, symbols, and combinations of these things if they identify specific goods or services and allow customers to recognize the products of the company in the marketplace. A trademark indicates the source of goods and services, legally protects the company’s branding and provides legal protection against other entities using the trademarked content without permission.
Copyrights grant the owners of creative works the exclusive rights to distribute, display, copy, and adapt their works. This form of intellectual property protects the creators of original content from others duplicating or using that content without permission. Only “tangible forms” may be copyrighted – such as music, screenplays, novels, paintings, etc. In the United States, copyrighted works are protected until 70 years after the creator’s death.
The owners of inventions can protect their intellectual property rights by applying for a patent. Patents grant inventors exclusive rights to the process, design, or invention of the product over a specific period. The patent owner is the only one who may build, sell, and use the invention. Most patents are granted for 20 years, but some are valid for only 14 years. In exchange for these rights, the inventor must a detailed disclosure of the invention.
Trade secrets protect the intellectual property rights of confidential company information. The World Intellectual Property Organization (WIPO) has three official criteria for qualifying as a trade secret:
Intellectual property owners have a few options for incorporating their IP rights into an estate plan. While these rights can be included in a basic will, stronger protections may be available by placing the intellectual property into a trust.
Assets that are placed in wills must go through a lengthy and expensive probate process, where they are subject to taxes and fees that may be avoided when using a trust. Probate also often results in delays that force heirs to wait months or even years before receiving the assets. In addition, wills are public documents, which means that the distribution of intellectual property assets will be public knowledge. Conversely, a trust allows the distribution process to remain private. You can learn more about intellectual property trusts and other legal options related to estate planning for intellectual property by contacting Mindful Counsel.
During the estate planning process, it is important to consider how intellectual property rights will be transferred when the owner passes away. This transfer process will vary depending on the type of intellectual property rights:
The best way to protect intellectual property is to officially register it through the appropriate government process – whether that is a trademark, copyright, patent, or trade secret rights. The right form of protection will depend on the type of intellectual property and the nature of the content. Experienced intellectual property rights lawyers work with their clients to determine the best form of protection based on the client’s circumstances and the property they are looking to protect.
In some cases, multiple forms of protection may be necessary. For example, a patent may be necessary to protect the IP rights of an invention. A trademark could be registered for the branding used in the marketing of that invention. Trade secret protection could then be used to protect confidential information related to the product.
If you are creating an estate plan or looking to update your current plan, you may benefit from seeking legal guidance. Estate planning is complex regardless of the circumstances, but estates with intellectual property rights involve their own complexities. At Mindful Counsel, our experienced estate planning lawyers can help you ensure that your intellectual property is handled according to your wishes. Contact us today at (480) 422-6246 to learn more about estate planning and intellectual property.
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