For those unfamiliar with Copyright, this is a particular form of legal protection used to stop individuals from copying, performing, distributing, selling, publishing or licensing a person’s intellectual property (I.e. music, books, artwork etc.) without their permission.
Whilst the outcomes of these Copyright cases is debatable, the topic of intellectual property and Copyright is an important subject when considering estate planning. This is particularly so when the intellectual property in question holds significant cultural and monetary value. As for individuals such as artists, musicians, writers and business owners, Copyright may embody a large portion of their assets which they will inevitably want to pass on after they die.
Under section 1(1) of the “Copyright, Designs and Patents Act 1988”, the law states that Copyright covers “Original literary, dramatic, musical or artistic works, sound recordings, films, broadcasts and the typographical arrangement of published editions”.
For the majority of works, this protection covers the period of the author’s life and a further 70 years from the end of the calendar year in which they die. After this time the intellectual property falls into the public domain, where Copyright restrictions are removed. With this additional 70 years of benefit following death, intellectual property is clearly a valuable asset to be left to your chosen beneficiaries.
At present Intellectual property rights can be sold, assigned to another person through the use of a deed, placed in Trust or left directly to beneficiaries through the use of a Will. An estate with multiple Copyrights such as songs, paintings, and literary works can therefore be dissected and left in a number of different ways. This may include being divided amongst multiple beneficiaries with each recipient taking an individual share of varying proportions.
The recipient of these intellectual property rights can be a person such as a friend or family, or a non-physical entity such a charity or business. An example of this was revealed following the 2016 death of George Michael when it was publicised that he had donated to Band Aid, all of his royalties (money received in exchange for use of his intellectual property) for his copyrighted hit song “Last Christmas” to support the fight against Ethiopian famine.
The value of intellectual property can be further highlighted in the recent reports of the company “Hipgnosis” buying percentages of intellectual property rights from credited authors willing to sell their share. At present, this catalogue consists of hit songs including Beyoncé’s “Single ladies (put a ring on it)” and Rihanna’s “Umbrella” which are thought to bring in substantial amounts of income due to their cultural value and continued popularity.
A common form of estate planning for authors includes the use of a Will to leave intellectual property on trust for their chosen beneficiaries. This form of planning allows for appointed Executors to continue to licence, distribute and contract the intellectual property as if the author were still alive. This has the benefit of continuing to enforce rights attached to the intellectual property and to generate an income. A similar example of this can be seen in the “Estate of Marvin Gaye” which has successfully won multiple Copyright court cases in the last few years for infringing rights left by Marvin Gaye following his death.
For further information on estate planning please contact the Private Client team at Hodge Jones & Allen.