Heading into the month of December, we wanted to focus on the idea of gifting. While in our line of work, we often think of gifting in terms of taxes or inheritance, but there are so many other ways to leave gifts to those in your life. We asked our colleague Alyssa at Purple Fox Legal to share with us some of the “gifts that keep on giving” through intellectual property law, which is her focus. If Alyssa’s post helps you or you have questions about your copyrights or trademarks, reach out to her at email@example.com or 629-248-3310. -April
Guest Blogger Alyssa J. Devine, Esq. at Purple Fox Legal
Professional creatives, like songwriters and musicians, pour endless amounts of time, energy, and passion into their craft. They spend months perfecting each project, and years carrying the pride of a job well done. And, for many, this hard work continues to live long after they do.
This is where estate planning comes in. Proper estate planning guarantees that your legacy will be managed according to your standards, even when you’re not around to do so. The process names the people and organizations that can lay claim to your assets, and protects your work with red tape and safety nets. It is a critical step in any songwriter’s life.
Knowing the importance of something, and understanding how to do it are two separate matters. In this article, we’re introducing musicians and songwriters (like you!) to the most basic steps of estate planning. We’re covering the top five important tips for songwriters planning their estate.
1. Understand how property is transferred through estate planning
Comprehensive estate planning is crucial for ensuring that all property is transferred to its intended parties. While most estate plans will easily transfer common assets, like cash, vehicles, and real estate, professional songwriters also need to consider protecting their intellectual property. Intellectual property, like copyright, is incredibly important for you to continue providing a stream of income that can flow for generations.
To truly understand estate planning, songwriters must understand what an estate actually is. In layman’s terms, an estate is a portfolio that includes all property (tangible and intangible) accumulated throughout an individual’s lifetime. After your passing, all of your property, assets, and funds will become the property of the estate.
Once you pass on, all of your estate planning goes into action. The executor, or person responsible for carrying out the probate process, will distribute your property through a complex legal procedure. Your final wishes and requests will be followed, typically passed down in the form of a will. A judge will direct your executor to follow state regulations to transfer your assets and distribute your property.
2. Register your copyrights and maintain copies of every contract associated with them
Copyright registration is paramount in the songwriter’s estate plan. Registering your copyrights will ensure that they are protected for up to 70 years after the author’s death. But, songwriters and musicians should recognize that each song they produce carries two copyrights. It’s not only the sound recording and “master” copyright that matters but the musical composition must also be protected. This includes the lyrics and underlying music.
To add another layer of complexity, copyright protection doesn’t end with registration. A consistent and cohesive record should be kept of all contracts associated with your copyright. This will help clarify the copyrights owned by the estate itself.
Remember: A notice to the Copyright Office is also required each time a copyright changes ownership. If copyrights are not included in the estate, they cannot be distributed to heirs. Filing with the Copyright Office is so important because it creates a public chain of custody and lowers the likelihood of litigation after your death.
3. Add beneficiaries to your performance rights organizations and mechanical rights organizations
When it comes to copyright law, registration grants the owner a number of different legal rights. In fact, the US Copyright Act provides six unique and exclusive rights for each copyright. And, each registration lasts long past the life of the author.
Because of this, every songwriter should consider adding potential beneficiaries to transfer control of these six unique protections. Including intended beneficiaries during the estate planning process can prevent expensive litigation after your death. But first, each beneficiary must be added to a musician’s Performance Rights
Organization (PRO) and Mechanical Rights Organization (MRO), in addition to creating a will.
Most musicians are familiar with and registered with both a PRO and MRO. PROs are responsible for administering performance licenses, collecting licensing fees, and distributing these fees. They handle music that is publicly broadcasted on the radio or the Internet, in television shows, or out in public. MROs, on the other hand, collect mechanical royalties. They reserve a fee each time your song is played.
Accurate, updated information is required in both your PRO and MRO accounts. Adding beneficiaries to them cannot be recommended enough.
4. Be aware of the deadline for recapturing copyrights
When a copyright is created and then assigned to someone else, the original author is afforded an opportunity for a second bite of the apple. This means that original authors can elect to recapture copyright ownership by filing a specific notice with the US Copyright Office. It’s important to know that there is a limited period of time before the termination goes into effect.
For many songwriters, recapture is available as early as 35 years after publication.
5. Write down how you want your property to be transferred before creating a will
A valid and effective will is just one step in the estate planning process, but it may be the most important one. A will dictates exactly where your assets will go after your death, including the methods of transfer and the terms you expect. Anything in a will is subject to probate court though, which is why it shouldn’t be the only document in your estate plan. Wills serve best when used as a safety net for any assets not covered in your other estate planning documents.
When it comes to estate planning and managing your assets, age should never be a factor. Songwriters with assets should always be protected. Just look at Kurt Cobain and Selena Quintanilla, who didn’t have wills when they died. Their lack of an estate plan created a whirlwind of legal problems for their families.
Creating a will can be overwhelming The process to get there can be overwhelming though, but having help from an experienced attorney can make the process seamless for you and your family.