This blog will focus on the importance of considering intellectual property in estate planning. A recent article in the Wall Street Journal reminded me that intellectual property may be a very important part of an estate plan. The article focused on the settlement of a lawsuit between the heirs of Jack Kirby and Marvel Entertainment. Kirby, along with Stan Lee, had been a creator of many of the figures in the Marvel universe. The lawsuit concerned whether Kirby continued to hold intellectual property in the Marvel universe of characters or whether it was all “works for hire” under intellectual property law.
Jack Kirby died more than 20 years ago. This illustrates that issues with intellectual property may not be settled until long after a person’s death. There are several important points to consider in planning:
- The executor /trustee should be given power to manage the intellectual property
- The intellectual property should be considered in the disposition
The intellectual property may turn out being worth far more than originally anticipated. So, the client may want to give a percentage of the entire estate to each heir. This would include the intellectual property. In that manner, the value of the intellectual property may be of less importance to the relative disposition to the beneficiaries. If the intellectual property is specifically bequeathed to one beneficiary, the value of that bequest may be far greater than originally contemplated.
In addition to consideration of disposition and management at death, one should also consider management during life. The power of attorney might specifically grant authority to deal with the intellectual property. In fact, the client may want to include specific instructions regarding any intellectual property. For example, some clients may not want their intellectual property sold during their lifetime.
Intellectual property takes many forms and each unique form may require different tweaks. As the case of the Kirby estate’s intellectual property demonstrates, intellectual property may be worth far more than originally contemplated. Make sure the plan you put together anticipates changes which may occur.
Stephen C. Hartnett, J.D., LL.M.
Associate Director of Education
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (800) 846-1555