You’ve always been a creative type, and you’ve made a pretty good living through your residuals and royalties. You’ve got an impressive array of copyrights, patents, trademarks and other intellectual property to your name — and they may make up the bulk of your estate.
While you can use a will to pass your intellectual property rights to your heirs, it may be far more advantageous to use a trust, instead.
Why is a trust superior to a will when it comes to intellectual property?
Relying on a will to manage the way your intellectual property rights are passed to the next generation has numerous pitfalls. Among them are the following:
- Including them in the will means those assets will go through the probate process, which means they may be subject to taxes and fees that could otherwise be avoided.
- It will take longer for your heirs to benefit from your generosity, since a complex estate can languish in probate for months or years.
- Because wills are public documents once they go into probate, your heirs will have no privacy where those assets are concerned.
A properly crafted trust can avoid all of these problems, and that saves your heirs time, money and frustration — in addition to protecting their privacy. You can also use your estate planning process to look into lifetime transfers that will help reduce your overall estate taxes (which means more of your wealth will go to your heirs, not the government).
Constructing a trust for your intellectual property rights takes time and skill. You generally have to make sure that royalties and other holdings are shifted one-by-one from each publisher or company, and that’s not always quick or easy to manage — so start making your estate plans early so that your heirs get everything they are due.