Intellectual Property and Deceased Estates
Many people have a good understanding of how their assets will be dealt with after their death. It is a relatively straightforward process to account for commonly held assets such as real property, savings and personal belongings in a will, but the situation becomes more complicated when it comes to items that the testator personally created. For many inventors and artists, their intellectual property represents more than an asset to bequeath to someone; it is a legacy to leave in trusted hands. This article explores what happens to a person’s intellectual property after their death.
What Is Intellectual Property?
Intellectual property is a term used to describe a creation, idea or knowledge that belongs to a person/s or entity, such as:
- A patent for an invention or medicine;
- A trade secret, such as a valuable recipe or formula;
- Artistic product, such as a painting or literary work;
- Musical composition;
- Film or broadcast.
Intellectual property is a commercial product protected by law through copyright, trademarks and patents designed to prevent infringement on the creator’s rights. Intellectual property does not need to be currently valuable to be considered an asset for distribution. As a result, unfinished or unpublished work is still considered an asset to be bequeathed upon a testator’s death.
Who Inherits Intellectual Property?
It is important that a testator leaves clear instructions in their will for the disposition of their intellectual property after their death. One method is to create a testamentary trust for all of a testator’s creative assets and appoint a trustee to manage the testator’s legacy after their death. This type of legal instrument should be set up carefully, with the input of family members, agents or managers. A testator should write directions in their will as to how they would like their work to be treated in the future, but also have frank discussions with their prospective trustee so there are no misunderstandings.
It can be much harder to decide who should inherit intellectual property than to choose who receives other types of property. Unless the beneficiary is someone who is invested in caring for and continuing the creator’s vision for their asset, it is unlikely to realise its full potential. A testator with intellectual property should plan their estate with consideration of who is best positioned to preserve their legacy.
A bequest of intellectual property usually gives the new owner complete control over the asset. In some cases, the beneficiary inherits the rights to the deceased’s name and image. Control of related rights allows an heir to regulate how the creative work is developed or commercialised in the future. If a testator has not made provision for their intellectual property in their will, the next of kin of the deceased typically inherits the rights to the work, in an order of succession starting with the de facto or marital spouse, then children, and so on in accordance with the relevant intestate succession legislation.
Careful documentation must be made to establish ownership of intellectual property so there is no confusion in the future. This can be particularly complicated when the development of intellectual property is a family endeavour or trans-generational undertaking. For example, if a family collectively develops and refines an innovative engineering process over many decades, then a testator with part ownership of the intellectual property should consult an experienced solicitor who can advise on how this asset should be dealt with in their will.
Digitally Stored Intellectual Property
Many artists or creators have intellectual property such as novels, photographs or music saved on computers or cloud storage. These assets are part of a deceased estate but can be difficult to access after a testator’s death. A testator needs to leave complete instructions in their will on how their digital assets should be accessed and administrated after their death. A note should be made of any online user names and passwords, otherwise an executor will struggle to obtain access to a digitally stored asset. A testator and executor should also be aware that upon a user’s death, some companies implement privacy law and block access to email accounts and online business and social media accounts.
Anyone who has not already taken steps to protect the legacy of their intellectual property should do so without delay. An experienced wills and estates solicitor can help to develop a plan for the administration of these assets in a deceased estate. A will that contains provisions for intellectual property should be reviewed and updated regularly to reflect new work or other changes to the testator’s circumstances.
The Contested Wills Team at Armstrong Legal understands the complexities that come with dealing with non-traditional estate assets. They can answer any questions you have about what happens to your intellectual property after your death. Please phone our team on 1300 038 223 with any legal queries or use this form to make an appointment.