DISCLAIMER: This post is not meant to give legal advice is only for education purposes. You should consult with an attorney for any legal needs regarding your estate, intellectual property, or any other legal concerns.
What is Intellectual Property Law?
Intellectual property law deals with the practices for securing and strengthening legal rights to designs, inventions, and creative works. Plainly as the law defends ownership of private property and real estate, so does it defend the private control of indefinite assets. Intellectual property is the collection of legal claims to a declared idea.
It can also be described as the property that follows the “fruits of mental labor”. There are three fundamental forms of intellectual property:
Trademarks – These can either be visual (like Logos) or based on words (a Brand name), and are generally meant to protect brands from being confused with other brands, and benefiting through that confusion.
Copyrights – Copyrights are the most common form of intellectual property and creative written works (including music, literature and art) from being duplicated or stolen.
Patents – Patents generally help protect inventions and innovations. These are usually more complex as it has to be determined that the invention or innovation is sufficiently different from previous inventions or innovations.
While they obviously have their own laws associated with each type, they can be thought of conceptually just like other property, i.e. they can be bough, sold, and passed on through wills other contracts. They also fall under the same marriage/divorce rules as other physical property, which can vary from state to state and country to country.
The pointers below articulate intellectual property is affected by inheritance, divorce or other family legal issues.
Intellectual Property and Divorce
In community resources states such as California, the divorce law is such that all assets shared to the matrimonial alliance must be divided evenly during divorce. The nuptial property is something obtained during the union, yet before a divorce. In certain separation events, there are significant concerns regarding intellectual resources. In a split, there are many questions which must be answered if the man or wife has a trademark, patent or copyright.
If precise plans for transferring IPA claims are not put in place, the rights will usually pass via a will’s residuary property. Black’s Law Dictionary describes it as the portion of a decedent’s estate that remains after all liabilities, costs, charges, and particular legacies and devises have been met. Any property not accurately bequeathed in the will becomes residue.
You may ask how much it is worth and what the implication will be if the concept was developed before union but completed during the marriage. Other questions commonly asked are such as what if the project is not completed at the time of divorce.
Intellectual Property and Inheritance
Intellectual property can be easy to miss during estate outlining because there is no physical presence, opposed to the actual personal estate or real goods that can be seen and more easily valued. Most business proprietors and entrepreneurs own some form of their intellectual property, and artists almost certainly do, usually in the form of copyrights over music, lyrics and visual creative works.
These intellectual property assets, or “IPAs” will transfer through normal inheritance laws just like other assets. And just like other physical assets, you can transfer your IPAs through assigning them within a written contract administered during your life or give the IPAs after passing away by the trust contract, by disposition during your will.
The answer is not always straight forward, and this post is not meant to give legal advice. It is best to consult with an estate planning attorney when formalizing your approach to wills and your estate. However we will point out a few important items that you should keep an eye out for and perhaps raise with your attorney.
If your inheritance tree is relatively simple, it may be perfectly fine to rely on the default inheritance laws to disperse your assets. In fact, at least one attorney argues that rushing to fill out online wills may do more harm than good. It really does depend on your situation.
A Composite Approach
Depending on the quality of the IPAs, a composite approach may allow the best answer. When assessing whether IP assets should be given during your life or upon your death as a testamentary gift it is necessary to examine the likely tax indications of an IPA transfer.
The federal gift could be principal determinants in your decision. Other factors include the age and ability of the beneficiaries and their capacity to protect and utilize the IPAs. Proper preparation is important.
A badly drafted will, such as neglecting heirs, over complicating inheritance rules, or forgetting certain intellectual or physical property, could yield unexpected results. A “random” receiver may not adequately exploit the benefits held in lyrics, images, publications, copyrights, trade secrets or brands. As a result, you should try to to take deliberate steps to guarantee they go to the individual who can best administrator those assets, and for the gain of those you want.