Making Copyright Bequests
Let’s say you have written and published a book. Congratulations! Then you realize that you actually have to market the book to get people to buy it, and suddenly, it’s not so fun anymore. Or perhaps you’re happy with the way things are now, but you want to give your copyright to someone down the road who you know will do the work to keep the income flowing. How do you do that?
If you’re looking to give away your copyright down the road, you can gift it through your will or trust. If you want to keep it simple, you can just say in the document who you want to inherit it and leave things at that. You can also leave it in the trust and have the trustee send the income to your chosen beneficiary; I covered that in a previous blog article.
If you want to give your copyright away now, then you can do so through an assignment. Essentially, you sign a document that gives the copyright to your chosen recipient. Make sure you specify what you’re giving away, e.g., stating your book’s title so everyone knows what is being gifted. You also want to make sure there’s a date on this, so there’s no question about when it happened. Lastly, while notarizing the assignment is not required, validating your signature is helpful, so there’s no question of fraud down the road.
Are there downsides to one method over the other? It really depends on your end goal. If you want the person to receive it eventually but aren’t too concerned about the timing, then it’s fine to include it in your will or trust. If you want it out of your life yesterday, then an assignment is the way to go.
Another consideration is taxes. An inheritance is not considered income, so gifting a copyright through a will or trust will not incur taxes on either side (at least in California; I can’t speak to the tax laws of other states). An assignment during life, however, would be considered a taxable gift if the value of the copyright(s) exceeded the annual exclusion amount. If the copyright is making twenty bucks a year, this is probably not a concern, but if it’s bringing some substantial revenue, then you might want to talk to your accountant about method and timing. (Why you want to give it away when it’s making a lot of money is another entirely different question.)
Last but not least, there is the termination right to consider. The termination right allows the author, or the author’s heirs, to terminate any license or assignment thirty-five years after the deal was made. This right cannot be assigned, transferred or contracted out of. The only exception is gifts made through a will – the termination right does not apply to those. Otherwise, any gift of copyright you make can potentially be clawed back by your legal heirs. So if you worry that your kids will try to take your copyright back from the wonderful nonprofit you donated it to, you may want to gift it through your will instead.
If you have questions about whether and how to give away your copyright, I would happily answer them. Just reach out to me at kaway@kawaylaw.com.
