If you are a business owner or have a leadership role in a business, you probably have some form of intellectual property (IP) that you have created, and that IP should be protected. What happens to this type of intellectual property after you pass? Will you be able to protect how it is used and by whom? Will your heirs be able to receive the profits from it’s use? Below we explore the importance of protecting Intellectual Property with an Estate Plan in Maryland and additional considerations for probate.
What is Intellectual Property (IP)?
Intellectual property can cover a wide variety of assets, but is defined by the World Trade Association as “Intellectual property rights are the rights given to persons over the creations of their minds. They usually give the creator an exclusive right over the use of his/her creation for a certain period of time.” Intellectual property may include any of the following unique items that would be considered ideas of the creator:
- Music & Lyrics,
- Quotes & Slogans,
- Technology Programs,
- Patents & Trademarks,
- Trade secrets and Copyrighted works,
- Processes & Concepts,
- And the list goes on and on.
Why is IP so Valuable?
The valuable aspect of intellectual property is that it can continue to generate revenue long into the future. A trade secret may be relevant for years to come, while a patent lasts for two decades, which can generate much more income than a healthy stock portfolio. Meanwhile, the revenue generated from a song, trademark, or novel can last for years or even multiple generations. Protecting these intellectual assets will require thoughtful planning. So, it’s important to protect intellectual property with an estate plan and seek sound legal guidance to protect your ideas, your legacy, and your heirs.
Assessing the Scope and Value of Your Intellectual Property
One of the first steps for creating an estate plan involving intellectual property is to assess the value and scope of the property, according to the American Bar Association (ABA). Taking inventory of such property takes time, legal knowledge, and experience, and will require determining the scope of the property. Important criteria, according to the ABA, that may need to be thoroughly investigated, include:
- Whether the property is singular or varied (if there is a small or large number of trademarks, copyrights, etc.);
- The size and scope of the intellectual property;
- Whether or not the property is unique.
Determining the value of intellectual property can be very difficult, as the value of a trade secret, for example, may be low today but extremely valued a year from now. Similarly, the value of a trademark may be high today and worthless 10 years from now. In addition, there are a variety of additional considerations with regards to the rights of the creator of such intellectual property and the disposition of those assets during probate in Maryland. You’ll need an experienced estate planning attorney to provide guidance with regards to your IP and how to transfer, manage, and monitor those assets.
Who Will Receive the Rights?
Intellectual property not only benefits you today, but can be a huge financial advantage for the person or people that you decide to leave the rights with when you pass away. Whether you decide to leave your intellectual property with your children, spouse, or close friend or family member, you need to create an estate plan that will best suit your and their needs. Or, the property may be best left as part of your will or living trust. You may also wish to use this property to make gifts during your lifetime, though going over the $14,000 per year maximum gift will incur serious taxes and such gifts need to be planned carefully. If you live in Maryland, you’ll want to consider how these assets could be affected by the probate process as well.
Call an Annapolis Estate Planning Attorney Today
Your intellectual property is valuable for your legacy and your heir’s future so take steps to protect it! The revenue generated from your intellectual property could either go into your loved ones’ hands, or be lost forever. Reach out to schedule a free consultation with one of the experienced Annapolis estate planning attorneys at Frame & Frame today.