When you have an income-producing asset like a copyright, it’s easy to focus on how to keep that income flowing over the next few months. It’s more difficult, but ultimately very rewarding, to plan out how that income will keep coming in over the next few years – just look at the Marvel movies as an example. But how many people plan for how that income will keep coming in over decades, even if they are not personally managing the asset anymore?
Most people don’t think about this at all. They may have a long-term plan, but it doesn’t include who will take over when the time comes, or how that person can keep the plan going smoothly. In most cases, a person will die without any special instructions for the copyright. When that happens, the copyright will be lumped in with all their other assets (collectively known as “the estate”), and ownership for each copyright will be divided evenly between the person’s heirs.
For some people, that works just fine. Either they don’t feel the copyright is valuable enough to cause a fuss, or their heirs are the people they want to benefit from the copyright anyway. What they fail to consider is that their heirs may not be the best people to manage the copyright. Some heirs don’t want the burden of managing an asset on an ongoing basis. Some think that no actual work is required, and are surprised when the money dries up. Some genuinely want the copyright and are willing to shoulder the burden of managing it, but they have no idea how to do so properly. And then there’s the complication of what happens when there are several heirs, who are all sharing ownership of a copyright but may not share a vision of what to do with it – a problem Prince’s six siblings will have to deal with, if and when Prince’s probate finally closes.
So what’s a person to do?
The first step is, of course, to have a plan. As part of that plan, you should decide who you want to manage your copyright after you retire or pass away. You should also decide who you want to receive the income from the copyright – it doesn’t have to be the same person. In fact, it might even be better if it wasn’t.
Once you have a plan, and you’ve decided who will be a part of it, you need to get those people on board. Share your plan with your future manager and prepare them for the role they’ll be taking on. Let them know what you’re doing to keep the money coming in, and what you do (or don’t) want to see happen with the copyright in the future. Share your plan with the person receiving the income as well, and discuss with them how much they can expect to receive and how they can use it wisely. History is littered with examples of people who not only lavishly spent their inheritance, but drove themselves into debt as a result of it. Don’t let your loved ones suffer the same fate.
If you need help putting this plan into motion, you are welcome to contact me at kaway@kawaylaw.com.