Artists and their families have unique needs when it comes to estate planning. Be aware of the following strategies to protect the value of an artist’s work during and after his or her lifetime:
Copyright eligibility. The first step is understanding what constitutes a copyrightable work. Protection is available to original works that are either written or otherwise recorded, including literary, musical, artistic and certain other intellectual works. These categories are to be interpreted broadly and can include maps, architectural plans, buildings and mobile apps.
Registering a copyright. Next, ensure that the artist’s assets have been registered with the U.S. Copyright Office as this provides certain legal advantages and protections. Applications are available online and are fairly straightforward. Note, however, that artists are not eligible to register a copyright when a work was created under an employment contract or “work for hire.” For example, an artist who created greeting cards as an employee of stationary company would not be entitled to register a copyright on those works.
Copyright duration. As part of your estate planning, you need to know the duration of the copyright. If the work was made on or after January 1, 1978, the copyright will last for the artist’s life plus 70 years. (Determining the length of copyright protection for works created before that date is more complicated and depends on several factors.)
Copyright recapture. Be aware that even if a copyright has been sold, an artist’s rights to that work may not be gone forever. Copyright laws allow the creator (or his/her heirs or executor) to recapture a copyright. The law was created to address the injustice that occurs when a creator sells a copyright before the true fair market value is known. An artist, essentially, has a non-waivable right to terminate transfers and licenses granted by the copyright owner.
Generally speaking, copyrights signed away after 1978 are eligible to be recaptured after 35 years; copyrights signed away before 1978 are eligible to be recaptured after 56 years.
After that time period, however, artists and their heirs have just a five-year window to effect a recapture.
Other estate planning issues can come into play concerning how artists’ assets can be assigned to heirs via wills, trusts and other wealth management strategies. Artists must be careful that the work and the underlying copyright are both transferred as intended. Talk to your advisor.