Copyrights: Estate Planning Conundrum

Image courtesy of Stuart Miles / FreeDigitalPhotos.net

If you own a copyright and need to estate plan, you’re in good company:  James Joyce, Walt Disney, C.S. Lewis, and Andy Warhol faced your same dilemma.  Although the Sonny Bono Copyright Term Extension Act generously extended the length of copyrights, at some point in the future your copyright will be controlled by someone other than you.

The Life of a Copyright

It is commonly known that the U.S. Constitution granted authors the exclusive right to their writings for limited times, both incentivizing creativity and dissemination of ideas and ultimately giving the public access to creative works.  Copyright protection generally lasts of the life of the author plus an additional 70 years; for works for hire or for anonymous or pseudonymous work (unless the author’s name is revealed in the records of the copyright office), protection lasts 95 years from publication or 120 years from creation, whichever is shorter.

Making your Copyright Useful

Copyrights are designed to protect the use of our creative works.  What does “protect” mean to you? More importantly, what does it mean to your surviving spouse, children and grandchildren?  The usefulness of your works is the essence of your copyright and some important questions should be reviewed:

  • Are you concerned about your work being reproduced without compensation?
  • Are you concerned your work may be used for profit by another?
  • How would you feel if your family “protected” your work by refusing all use?

Simply leaving your copyright to another as part of your estate plan is not enough.  You need to consider whether you want to leave more specific wishes for the use of your copyright.

Your Survivors’ Power to Terminate the Grant of Your Copyright

Let’s just say you grant your copyright during your lifetime for what you think is a GREAT purpose and/or financial gain.  As you may be aware, under the 1976 Copyright Act, the creator enjoys an absolute, nonwaivable right to terminate a transfer during a five-year window that begins 35 years after the assignment of the copyright.  Did you know that the creator’s “statutory heirs” have this termination right after the creator’s death?

In essence, this means that the creator’s surviving spouse, children and grandchildren may exercise this post-mortem termination right whether or not you agree.   This is concerning because your copyright may not be used as intended.  For example, in the case of James Joyce, his survivors have opted to take many of his works OUT of the public domain, which is widely seen as a disservice because, among other things, it can lead to the erosion of the author’s place in the literary world.

Estate Planning Tools for Copyrights

There is one limited exception permitted by the Copyright Act which allows the creator to waive this termination right and circumvent the statutory heirs’ termination right: the creator can transfer the copyright by Last Will and Testament.  However, at least in California, this can require a probate administration of the estate which can be time-consuming and expensive.  Therefore, the creator could consider transferring the copyright to a Living Trust.  However, the 1976 Copyright Act does not allow the creator to waive termination rights in a Living Trust or other state-recognized will substitute.  Therefore, it is possible that your surviving spouse, children and/or grandchildren could unwind the transfer made to a Living Trust.  Clearly, this is an estate planning conundrum.

Regardless of what approach you take, you may be inspired to create a plan for the use of your copyright by the approach of Andy Warhol, whose Will mandated that his works be managed by a foundation.  This foundation allows for Warhol’s imagery to be used widely in the interest of free expression, but aggressively defends the copyright when it is used for commercial purposes, such as coffee mugs, posters and other consumer items.  In this manner, the copyrighted materials further creative expression but protect the copyrighted materials from financial gain by others.

Like Warhol, your estate plan can leave instructions which restrict the license of your copyright for specific purposes, exhibition, publication, or production of your creative works, and the use of your name and likeness in connection with your copyright, all of which are likely very important to you as the creator of the work.  Given that the copyright protection lasts long after the death of the creator, it is very possible that you will never even meet or know the beneficiaries and/or heirs that will control your copyright even within 50 years of your death – well before the copyright may terminate.  Therefore, it seems like some basic instructions in your estate plan, at the very least, would be prudent.

Your Legacy

Whatever you chose, be it to transfer your copyright via your Will or Living Trust, it is clear that you need to give thought to how you want your copyrighted works used after your death.  Even if they are not widely used now, you need to contemplate future interest in your works after your death and consider leaving your survivors with some instructions.  After all, the creative works you have copyrighted may give rights to your survivors that allow them to control your legacy many years after your death.

Kimberly Napolitano, concentrates on the representation of individuals and families in all aspects of estate planning, business succession, asset protection, and the reduction of tax burdens. To learn more about Kimberly or for further questions visit our website laxlawyers.com.

Always consult an attorney in your area.
Image courtesy of http://www.freedigitalphotos.net/
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