[vc_row][vc_column][vc_column_text]
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 nature of intellectual property and its value, so it often gets overlooked, especially when it comes to estate planning. Yet, if you fail to properly document your intellectual property, 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 entity or a CPA to file your taxes, those advisors may not be thinking about or helping you plan for what happens to your intangible business assets upon your death. Intellectual property may require coordinated business and estate planning. Ask your advisors how these assets are addressed.
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, it’s vital that you understand enough to document your intellectual property and work with a legal team to plan for its management and potential transfer after death.
Identifying, Valuing, and Protecting Your Intellectual Property
In today’s world, your intellectual property could be your most valuable asset. In fact, studies show that 80% of a typical company’s total value consists of intellectual property Given this, we want to support you to make the invisible visible, enhance its value, protect it properly, and plan for your family’s potential benefit from your intellectual capital after your death.
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.
And while you might think that identifying, protecting, and valuing your intellectual property is something that only applies to big companies, not small businesses like yours, that’s definitely not the case. 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, it’s imperative that you take the proper steps to not only protect these intangible assets during your lifetime, but that you also use estate planning to document how your intellectual property should be handled following your death, so your loved ones can continue to get the most value out of these most valuable assets.
Documentation and Registration
The first step to take in protecting your intellectual property is to formally document it in your inventory of assets. When you create your asset inventory, be sure to not only list all business entities you own, but also 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 help clarify ownership of 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 ultimately cost you 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
In addition to protecting your intellectual property during your lifetime, 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 reduce the risk of asset loss and costly ownership disputes for your heirs, 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 one’s 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, as your Personal Family Lawyer®, 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 AMO LAW, Personal Family Lawyer®. We do not just draft documents; we help you make informed decisions about life and death, for yourself and the people you love. That’s why we offer a Legacy Planning Session, during which you can become more financially organized and consider planning choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.
[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column width=”1/2″][vc_single_image image=”7555″ img_size=”large”][/vc_column][vc_column width=”1/2″][vc_empty_space][vc_column_text]
6 Major Errors When Hiring an Attorney
No Time For Mistakes
Learn the 6 Common Mistakes People Make When Hiring an Attorney
Let me help you plan for the people and things you love, with steps intended to reduce the likelihood of court involvement and conflict. Enter your name and email address so we can send it to you. We will never spam you.
[/vc_column_text][vc_column_text]
[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_empty_space][/vc_column][/vc_row][vc_row][vc_column][vc_column_text][/vc_column_text][/vc_column][/vc_row]