Estate Planning for Your IP and Digital Assets

What happens to your intellectual property (IP) and digital assets when you die? How can you pass these intangible assets on to your loved ones? This is a big topic, but here are a few things to keep in mind.

Taking Inventory of Intellectual Property

The first thing to do is to take inventory of your intellectual property. IP falls into several major categories:

• Copyright
• Patents
• Trademarks
• Trade Dress
• Trade Secrets

Copyright law, as the US Copyright Office explains,

protects original works of authorship including literary, dramatic, musical, and artistic works, such as poetry, novels, movies, songs, computer software, and architecture. Copyright does not protect facts, ideas, systems, or methods of operation, although it may protect the way these things are expressed.

Generally, for works created after January 1, 1978, copyright protection lasts for the life of the author plus an additional 70 years. Thus, a copyright can continue to provide licensing revenue for an author’s estate long after the author is dead. Copyrighted material doesn’t need to be registered to be protected. The copyright exists from the moment the material is fixed in a tangible medium of expression – for example, written down. But the copyright does need to be registered before anyone can sue to enforce the copyright. Patents protect inventions, such as machines and formulas. A patent (unlike a copyright) doesn’t exist until it’s been granted by the US Patent Office (or another country’s patent office). A patent generally lasts for 20 years from the filing date, and thus it too can survive the death of the inventor. However, a patent that has expired has no commercial value. Trademarks, Trade Dress, and Trade Secrets generally belong to businesses rather than to individuals and thus pass to whoever acquires the rest of the business assets.

Passing on Your IP

IP, like any other form of personal property, can be bequeathed to anyone in a will. If the owner dies without a will, then the IP will go to the owner’s next of kin. IP can also be put into a trust to benefit a person or charity.

Other Electronic Assets

Other intangible electronic assets can include things like:

• Websites
• Domain names
• Cryptocurrency, such as Bitcoin
• Non-Fungible Tokens (NFTs)
• Social media accounts, which can be valuable if they have a lot of followers and are being monetized
• Downloaded movies, music, and TV shows

These assets can add up to a lot of money. A 2011 McAfee survey found that Americans valued their digital assets at an estimated $55,000.

Providing Access

In addition to knowing what your IP and digital assets are, your heirs also need to be able to access them. As the New York Times reported, some Bitcoin millionaires can’t access their wealth because they’ve lost or forgotten their passwords.