By Susan Spann
For the past few months, my guest posts here at Writers in the Storm have taken a look at different aspects of the author estate plan. This month, we’ll finish the series with a problem every author faces: selecting the heirs.
In some cases, choosing who will inherit an author’s copyrights isn’t difficult – for example, when the author has a spouse but no children, children but no spouse, or simply wants to leave the estate to charity. For most of us, however, inheritance issues require at least a little thought.
Let’s take a look at some of the available options you might–or might not—have already considered:
1. One heir, one copyright – splitting the works. When heirs don’t get along, authors sometimes consider splitting copyright ownership by leaving each heirs full ownership of a different copyright. A spouse might receive some of the works, and the author’s children each end up with ownership of a different novel. Generally speaking, this is not a good idea, especially if the author writes a series. Conflicts among the heirs may tie the works up indefinitely, and publishers don’t want to contract with different heirs for different works. As a general rule, splintering ownership of a literary estate creates more conflict – and more chance of everything going out of print – than treating your body of work as a single “property” or estate.
2. All heirs, all copyrights – treating the copyrights as a bundle. When authors want multiple heirs to share the benefits of the author’s literary estate, the best (and easiest) way to address the issue is to name a literary executor and/or “managing heir” who has responsibility for managing the entire literary estate, and then leaving each of the other heirs an “undivided percentage interest” in the literary estate as a whole.
In simpler language, an author who has three children might name the oldest child the literary executor and/or “managing heir” (the person who will work with the lawyer or literary executor to manage the estate) and leave all three children an undivided 1/3 ownership interest in the literary estate (meaning the author’s copyrights and the right to receive a 1/3 share of royalties and other income generated by the author’s works). Sometimes, authors prefer to leave the managing heir a slightly larger share, or to split the percentages unevenly – all of which are normal variations on the theme.
This way, if one novel or series generates more income than the others, the inheritance isn’t split in a lopsided manner. This is the most common, and usually the simplest, way of splitting an author’s literary estate.
3. Life estates and multi-generational heirs. Sometimes an author wants to leave the copyright income to one set of adult heirs and also to ensure that the literary estate will pass to a younger set of heirs (for example, the author’s grandchildren or great-grandchildren) at some future date. The author accomplishes this through a “life estate.
A life estate is a type of inheritance in which a person inherits an asset (in this example, the right to receive a share of the income from copyrights) for as long as that person lives, and upon the named heir’s death, the asset automatically passes to another person (called a “remainderman”) named in the author’s will or trust.
An example of “life estate” language might look like this: “I leave ownership of my copyrighted works, and the right to receive all income and profits therefrom, to my son George for his lifetime, and thereafter to all of my living grandchildren in equal, undivided shares.”
Authors should always consult an attorney before attempting to draft or create multi-generational inheritances and life estates in estate planning documents. In many states, special legalese is required to create a life estate and other special estate planning interests. “Estates and Future Interests” are a special law school course – sometimes taught as part of property law as well as estate planning classes – and the attempted gift can fail if the language isn’t properly worded. Even worse, a person can inadvertently create one of several rare but tricky “future interests” that causes a truly difficult probate snarl. If you want to create a specialized estate plan, it’s worth the time to find an experienced, reasonably priced attorney in your area who understands the special needs of intellectual property (copyright) inheritance issues.
4. Charities. Leaving part or all of your estate to charity is a noble, and often beneficial, act. Many of my clients do include favored charities in their wills and trusts, though charitable in the author estate plan can create some unique and unusual issues.
First, most charities aren’t set up to manage copyrights and other intellectual property interests. An author’s literary estate might bring in thousands of dollars a year, money a charity might well need and put to excellent use. But if the charity’s work is focused on fighting hunger by equipping and training individuals in developing countries, that charity might not have the time, staff, and capacity to manage copyrights on the side. In many cases, it might even cost the charity more to manage the copyrights than the literary estate is worth.
If you want to leave a portion of your estate to charity, consider leaving the charity a share of your liquid assets (cash, or the proceeds of selling stocks and bonds) or a percentage-based interest in the income from your literary estate—but placing the burden of managing the literary works on a different heir (who should probably also receive a percentage share, or the right to payment, in compensation for managing the literary estate). The less work a charity has to do to manage its “inheritance,” the better the organization can use the funds to accomplish the charitable purpose you intended to support.
I hope you’ve enjoyed this series on author estate plans and how to manage them! Join me next month, when I’ll start a new and exciting series to carry us into 2014!
If you have questions about this or any other author estate planning issues, please do ask in the comments – I love to help!
Susan Spann is a publishing attorney and author from Sacramento, California. Her debut mystery novel, CLAWS OF THE CAT (Thomas Dunne Books, July 2013), is the first in a series featuring ninja detective Hiro Hattori. Susan blogs about writing, publishing law and seahorses at http://www.SusanSpann.com. Find her on Twitter @SusanSpann or on Facebook.
Copyright © 2023 Writers In The Storm - All Rights Reserved
Hi Susan! I have a trust but it does not mention my copyright(s). Is there specific language that needs to be used to include the copyrights into the trust? Or is it more general? How do I add them to the trust? Thanks for clarifying for me!
Hi Betty! While you don't have to have unique language to pass your copyrights - they will go to the heirs in the percentages described in your standard trust language - it's usually a good idea to mention them specifically, especially if you want to ensure the right people control the literary estate after your passing.
Although you may need to consult with an attorney in your state, the language normally looks something like this:
"With regard to all of my literary works, published and unpublished, and other intellectual property ("Literary Estate"), I hereby appoint [name] to serve as literary executor, with full and continuing powers of management and control of the Literary Estate, and declare that the following persons will receive the following stated ownership interests in the Literary Estate, including the rights to receive income thereon: [state people and percentages]."
Depending on the state, you may also need to set up provisions for your trust to continue to manage the Literary Estate, or arrange a testamentary trust for management of your estate - or you may simply use less complex language like this:
"I hereby leave all of my literary works, published and unpublished, and other intellectual property ("Literary Estate") to [Names and percentages], with the request that they manage the Literary Estate in a cooperative manner, and that in the event of any conflict, the decision of [Name] will control."
The real reason for consulting an attorney, however, is to ensure that if your state's law considers ongoing bequests to be a form of sub-trust (which some do) the language is properly drafted.
Thanks, Susan! I'll get with my lawyer here to take care of this. You rock!
Reblogged this on heatherzhutchinswrites and commented:
Here's a problem we should all be lucky enough to have--HEIR issues!
I'm glad you found this helpful, Heather!
Susan, I'm not a published author (yet!) and this is something I've rarely thought about in a detailed manner. I hope to someday have to think about it and this post will serve me well. Thank you! 🙂