It's unlikely that you'll be thinking about estate planning as you launch your literary creations into the world. But if your books are successful, your characters may live forever alongside Elizabeth Bennet, David Copperfield, and Frankenstein.
The copyright in your books also lives on. Under current law, a copyright lasts for the creator’s lifetime plus 70 years. So if you publish a book in 2016 and live another 40 years, the copyright will last until 2126. That’s 110 years!
Something to think about. And plan for.
Writers should take some time to consider how their intellectual and digital assets will be managed following their death. With a little planning and clear direction, your work is more likely to remain published and income-producing. Without planning, you could leave such a much mess no one will want to touch your work.
Self-publishing writers need to pay particular attention to these matters. Since most of us don’t have business managers and agents following our careers, the task falls on us to take care of business.
Let’s confess that no likes estate planning, so we all procrastinate. Ten years ago, I was in heading into surgery, and the nurse asked if I had a health care directive and estate plan. I told her no, but I had drafts in a desk drawer. Truth is, those drafts had been collecting dust for years. And I am a lawyer and should know better.
So add estate planning to your to-do list (near the top, please). Here are some basics to help you get started.
How Do Assets Transfer?
Generally, there are four ways assets transfer to heirs.
Intestate: If someone dies without a will or living trust, then the heirs are determined by law. Usually, the assets go to descendants, or if there are no descendants, then to siblings, parents, cousins, etc. If a writer dies intestate, then all the heirs hold the copyright together. Any one of them may publish and exploit the work as books, films, TV, etc. without the permission of the others, although income must be shared. Yes, they could all put out competing editions of your book.
Intestate rules are complex, and court battles are common, particularly for large estates. Prince died earlier this year, and no one has found a will. He left behind one full sister, a number of half-siblings, and several people who claim to be illegitimate children, all clambering for a piece of his estate. I suspect the estate’s legal fees will run into the millions of dollars; money Prince would have wanted to go to better and more charitable purposes, no doubt.
Probate: If someone executes a Will, the Will directs how assets will be distributed. The estate is handled by an Executor named in the Will with supervision by the probate courts.
Living Trust: Using a living trust, a person transfers assets into a trust before death and names himself or herself as the Trustee with power to manage and sell the assets. Upon the death or incapacity of the Trustee, a Successor Trustee automatically takes over those powers. In most cases, the Successor Trustee may distribute the assets without going through the probate court, so the process is simpler and less expensive.
Entity: Some people transfer their assets to a corporation or LLC that will survive their death. This is a more sophisticated structure, and you should engage a trusts-and-estates attorney to determine if this makes sense for you.
Designating a Literary Trustee
Whether you create a Will or a Living Trust, you should designate someone as your Literary Trustee (LT). Your LT may be the same person as your Executor or Successor Trustee, but not necessarily. The LT might be one of your heirs or it could be an independent person, such as an agent, attorney, accountant, or fellow writer. Preferably, your LT will have experience in publishing as well as reliable business and personal judgment.
Generally, I recommend choosing one person as an LT, even if many people will be receiving income from your writings. I have seen too many families get into nasty battles when ownership and decision-making are shared. Some want instant income, and others want to spread income over time. Old grudges resurface. So the LT should be someone capable of handling these situations.
Spell out the powers of the LT, such as the authority to sign contracts, engage editors and designers, publish and sell books, and collect and distribute royalties to your heirs. You may also give specific instructions, such as directing that certain work not be published until a later date.
Consider giving the LT control your images, bio, drafts, journals, correspondence, research and other materials that may be of interest to biographers, libraries, and literary organizations.
Finally, you may want the LT to manage digital assets, such as your blog and social media accounts.
You should find some way to compensate the LT. Otherwise, no one will want to spend the time. Typically, the LT receives a percentage of income generated by the literary assets, with a minimum payment made from your estate upfront.
Finally, be sure to name at least one alternative or successor LT in case your first choice cannot fill the role.
Organizing Your Assets
I’ll be blunt about this. Leaving disorganized and incomplete personal and business records is downright cruel to your heirs. Not only are they grieving your loss, they can’t figure out whether you cashed your last royalty check. So spend some time getting your documents in order, including:
- Create a list of your published work, including dates published and all related publishing or other licensing agreements.
- Compile a list of your unpublished work, including where to find that work.
- Register the copyright of your work, especially published work. Registering the copyright creates a permanent record of what your work looked like on the date of registration.
- Update your income and expense records, particularly to show how much you have invested in each book for editing, design, production, and promotional expenses.
- Make a list of user names and passwords and keep it up to date. For some social media sites and email accounts, you can designate upfront a “legacy” contact who has the right to post to your account or who will be notified if your account is inactive for a long period.
Hire an Estate Planning Expert
When you ready to tackle this project, you can find forms of Wills and Living Trusts online or in books, such as those from NOLO Press.
But no book, form, or blog post can substitute for the advice of an experienced professional. Hire a trusts and estates attorney, preferably one with some experience with intellectual property assets. The greater the value of your estate, the more critical it is to have well-thought out estate planning. With professional advice, you are more likely to save on taxes, reduce the risk of litigation, and rest assure that your work and your bounty end up where you want them.
And your characters will live on.
(Disclaimer: Helen Sedwick is an attorney licensed to practice in California only. This information is general in nature and should not be used as a substitute for the advice of an attorney authorized to practice in your jurisdiction.)
Get major discounts on book reviews, advertising rates, subscriptions and all kinds of author services! Sign up now for these exclusive offers HERE.