Ongoing royalty revenues are the dream of every author, musician, and movie director. And those royalty revenues are even sweeter if you don’t have to put any effort into marketing the work yourself. But if this dream is achieved, it also creates a problem for the artist, and they often ask themselves – what happens to those royalties after I die?
If you do nothing, then those royalty revenues are part of the “residue” or “remainder” of the estate, and they go to your heirs (if you don’t have a will or trust) or your beneficiaries (if you do have a will or trust). But there is still the problem of dealing with the entity issuing the royalty checks – the person in charge of the estate has to not only reach out to tell them to update their records, but they also have to provide evidence proving who is entitled to receive the checks. This can get especially hairy if there are many heirs or beneficiaries, as no one likes the idea of cutting fifteen checks when they used to only cut one. It’s certainly doable, but it’s quite a hassle.
Things get much simpler if you state in your will or trust who you want to receive the royalty checks. You can even state that the royalty checks go to your trust, and the trustee can distribute the funds from there. In this situation, the entity issuing the checks can see in writing who is entitled to royalties, which saves time and hassle for everyone.
But there’s one more thing you can do to ensure that royalty checks are seamlessly transferred after your death (or as seamlessly as these things are capable of being). Some entities allow you to name beneficiaries in your file, so they don’t even need to look at your will or trust, similar to a life insurance policy. You can also include a provision in the original contract, either naming beneficiaries for royalties after your death or setting up a system so that the rightful recipients can be easily determined. If the entity has the paperwork on file, that saves even more time getting records updated and checks issued.
If you’re fortunate enough to have royalty revenues, taking the above steps will make the administration of your estate much easier. If you would like assistance with creating or updating your trust or your contract (or you are asking yourself the big questions, like what happens to my royalties when I die?), then please feel free to reach out to me at email@example.com.