Does Your Estate Plan Protect Your Intellectual Property?
If you own a business, you almost certainly have intellectual property. However, because your intellectual property is intangible, it can be invisible to you and those who aren’t familiar with the intellectual property’s nature and value. Therefore, often gets overlooked, especially when it comes to estate planning. Yet, suppose you fail to properly document your intellectual property. In that case, your estate plan will likely not protect it—and this could cause your loved ones to miss out on what can be among your most valuable assets.
When we talk about intellectual property, we’re referring to creations of the mind, including inventions, literary and artistic works, designs, logos, brand names, and images, all of which are used in the course of a business.
Even if you’ve worked with a lawyer to set up your business, they may not be thinking about what happens to intangible business assets upon your death. Similarly, most lawyers who focus on estate planning don’t really understand intellectual property’s value and how to protect it.
Along those same lines, when helping you set up your business structures, most business lawyers aren’t thinking about your incapacity or death. With this in mind, you must understand enough to ensure that any intellectual property you own is documented and protected. Make sure you’re working with a legal team that helps ensure the value of your intellectual property isn’t lost when you die.
Identifying, Valuing, and Protecting Your Intellectual Property
In today’s world, your intellectual property could be your most valuable asset. Studies show that 80% of a typical company’s total value consists of intellectual property. Given this, we will support you in making the invisible visible, enhancing its value, protecting it properly. We can ensure your family receives the maximum value from your intellectual capital when you pass away.
Properly protecting your intellectual property, or IP, begins with identifying it and valuing it. Yet, even the biggest of today’s companies often fail in this regard. “Very few companies recognize the value of their IP, nor have they secured an IP strategy that mirrors their long-term corporate strategy in order to maximize this value, ” said Brian Hinman, Chief Innovation Officer at Aon, a leading global professional services firm.
You might think that identifying, protecting, and valuing intellectual property is something that only applies to big companies. But it applies to all businesses. Indeed, your intellectual property can be of even greater value to your loved ones once you’re no longer around and able to financially provide for them.
For all of these reasons, you must take the proper steps to protect these intangible assets during your lifetime and for your heirs.
Documentation and Registration
The first step to protect your intellectual property is to formally document it in your inventory of assets. When you create your asset inventory, be sure to list all business entities you own. And consider that each business entity should maintain a record of its assets, including intangible assets like intellectual property.
The next step is to legally register trademarks, copyrights, and patents with the U.S. Patent and Trademark Office. And ensure you have the proper legal agreements and contracts in place to guarantee there’s no question about who owns these works. To this end, if you have not protected your intellectual property with copyrights, trademarks, patents, royalty and licensing agreements, non-competes for employees, and work-for-hire provisions in your existing agreements with independent contractors and vendors, now is the time to do so.
Don’t wait until your intellectual property gets stolen or you receive a cease-and-desist letter to put these protections in place. Registering a trademark or copyright might cost you time and money. But failing to register your brand can cost far more than that in legal fees or the lost value of your assets, especially if you end up in court, trying to fight for what you thought you owned.
Address Your Intellectual Property in Your Estate Plan
You don’t want to put your loved ones in the position of losing those intangible assets in the event of your incapacity or death. To prevent your heirs from losing out on your most valuable assets, as well as ensuring they don’t get caught up in long, costly court battles over the ownership of your intangible assets, you should put in the time and energy to protect these assets now.
After you have documented your intellectual property, review the operating agreement or bylaws of your business entity. And if you don’t have an operating agreement or bylaws, now is the time to put these essential legal agreements in place. Read through your governing documents to see what they say about what happens to your business and its intellectual property upon your death or incapacity.
If you think this all sounds overly complicated, imagine how much more difficult it will be for your loved ones to deal with it should something happen to you. In fact, it could prove impossible for your loved ones to handle these matters in your absence, which is why it’s so important for you and your legal team to take care of these issues now. That way, your family isn’t stuck trying to clean up your mess after your death.
To demonstrate just how lengthy, costly, and ugly court battles over intellectual property can be, read this account of the troubles American writer John Steinbeck’s children and grandchildren had in dealing with the rights to his literary works following his death. Even though the Nobel Prize-winning author died in 1968, his family members were still fighting over his intangible assets as recently as 2017, nearly half a century later.
Protect Your Intellectual Property for Future Generations
While you might not be a Steinbeck, you very well may have valuable intellectual property that has not been properly documented or addressed in your estate plan. If that’s the case, meet with us right away to discuss how we can support you in documenting, valuing, and protecting these intangible assets, so your loved ones can benefit from these creations for generations to come.
This article is a service of Ruberg Law PLLC. We don’t just draft documents; we ensure you make informed, empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Planning Session during which you will get financially organized and decide what YOU want for YOUR family. You can begin by calling our office today to schedule your Planning Session at no charge.