Last week we started our examination of trusts in the author estate plan with a discussion of the four steps for selecting the right trustee.
Today we’ll take a look at how to divide your copyrights and other intellectual property within the trust itself.
Dividing your copyrights among your heirs essentially boils down to two different – but equally important – questions:
Who you want to benefit from the copyrights after your death?
Who do you want in charge of managing the copyrights after you’re gone?
Many authors consider question #1, but fewer pay attention to #2 – even though that second question impacts the first in serious ways.
Let’s look at how it works.
In most cases, traditional publishing contracts don’t terminate automatically when the author dies. The publisher retains the right to produce and sell the works, and the author’s heirs or estate will receive the author’s share of royalties on sales. For traditionally published authors, “inheritance” essentially means the right to receive these royalties, though it also includes the right to manage and control the contract rights that accompany the works.
If the work goes out of print, for example, the heirs have the right to contract for renewed publication – or to self-publish the works, if the heirs decide to do so.
For independently published works (aka, self-published books) the heirs can either continue self-publishing, seek traditional publication, or take the work off the market altogether.
Clearly, the person–or people–you choose to inherit your copyrights could have an enormous impact on the success (and financial payoff) of your works after you are gone.
The good news is, you can name one person (or set of people) to benefit from the copyrights and another person (who may, but need not also be a financial beneficiary) who gets to manage and make the business decisions about your works. You address this in your trust by specifying (a) who gets to benefit financially from the copyrights, including the percentages each named person receives, and (b) who gets to make the business decisions.
Remember: if you want to split the financial benefits from the business decisions, the trust must state, clearly, who fills each role.
It’s a good idea to include special language naming the person (or people) you want to control the copyrights on behalf of the estate, and to choose a person for this role who has sufficient familiarity with intellectual property (and publishing) to manage your copyrights well. You can’t control the way your works are managed after you’re gone, but you can control the person you trust to manage them on your–and your heirs’–behalf.
Have questions about this or other author estate planning issues? Feel free to ask in the comments!