As a small business owner, I find myself networking and meeting people on a regular basis. You will probably not be surprised to hear that answering and asking questions is an important part of this process, or that you will often find yourself answering the same questions on a regular basis. One of the ones that crops up frequently for me goes something like this: “You practice estate planning, copyrights, and trademarks? Wow, those are really different fields. Is there any kind of overlap between them?”
As a matter of fact, there is an overlap. But it needs a little background information for it to become clear.
Let’s start with copyrights. Copyrights provide protection for creative expression: books, movies, art, music, and things of that nature. Copyright exists, at least in part, so that the creators of these works are able to profit off of them. It’s only fair; if you spent years slaving over the next great American novel, you wouldn’t want people to be able to sell copies at every street corner without getting a piece of the action. Congress also assumes that you don’t just want to provide for yourself during your lifetime; you want to provide for your children and grandchildren too, even after you’re gone. So, when they updated the Copyright Act in 1976, they made the new copyright term the life of the creator plus 70 years. That’s definitely long enough for your work to provide for your children and grandchildren…as long as there’s someone managing your copyright so it stays profitable.
Now let’s move on to trademarks. Trademarks serve as a way to identify yourself and your goods in the marketplace. Consumers want to know where their products come from, and sellers want them to create a positive connection between their product and their company. So they use company names and logos to make it easier for people to say “Oh, I know this brand. I’ve liked their other products, so I’ll give this one a try.” Unlike copyrights, trademarks do not have a set expiration date. A trademark will continue to be valid for as long as it is used in commerce (though if it’s registered with the United States Patent and Trademark Office, you’ll need to check in with them periodically, so they know you’re still using the mark). As just one example, the oldest trademark in the world, Stella Artois’ logo, has been in use since 1366, and it’s still going strong. But a company will lose their trademark if they don’t use it.
You probably see where I’m going with this. Copyrights are designed to outlive their creators, and trademarks are capable of doing so as long as someone is using them. Given this, it only makes sense that if you have an income-producing asset that will outlive you, you should have a plan for who will take over the reins when you can no longer manage the asset yourself. And that’s where estate planning comes in.
Here’s what happens if you die without a will and trust: someone will have to be appointed your executor, and that poor soul will have the thankless task of tracking down everything you own and figuring out what it’s worth. If it’s worth enough ($150,000 in California), then the estate has to go through probate. Probate is the process whereby the government oversees the distribution of your estate. Like most things involving the government, it is tedious, time-consuming, and expensive. Your estate will eventually go to your heirs, minus the various fees involved in probate, but it may take years to get there. It’s also possible that your heirs (usually your spouse and children, but sometimes another relative) are not the people you want your estate to go to, or are not the best people to manage your income-producing copyrights and trademarks.
Enter the will and trust. With a will, you can say who you want to receive specific assets. In addition, if you want to give your copyright to someone besides your heirs, giving it away in a will prevents your heirs from taking it back via the termination right (more on that in another article).
When you add a trust into the mix, things get even brighter. A trust will help you avoid probate entirely, and you can designate someone (a trustee) to manage your copyrights and trademarks so they keep making money, while the profits go to the people of your choosing (your kids, your favorite charity, or even both).
And there you have, in a nutshell, the summary of how all my practice areas tie together. If you would like to hear more about how to protect your assets in the long term, or if I have totally confused you and you would like to ask questions, please don’t hesitate to contact me.