(with a side note on electronic estate planning.)

by Robin Roberts

*Note from Sarah — Robin Roberts is my lawyer and he’s very, very good, so listen to him.  However I want to add ONE thing to planning your elife if you’re a writer.  I get sent novels, short stories, etc by friends, merest acquaintances and total strangers to “read and give me an opinion.” Most of the time they don’t get downloaded, and it’s not even because I don’t intend to read them — it’s more that I have a mind like a sieve.  If you’re a friend, a regular commenter or a friendly acquaintance and waiting for me to read your stuff, poke me.  But if I like the person, they do. If these are already published, I put them in my ebooks drive (i.e. the books I buy/get to read.) But if the person wants comments and editing, it goes on the work drive.  So, suppose I drop dead tomorrow.  Given my tendency to write under names even they don’t know, how does my family figure out which books are mine?  Well… I keep them under a directory called Other People’s Writing.  If they can’t figure it out from that, I can’t help them. And now listen to Robin who knows a lot more about this stuff.*

Sarah and I were discussing some deep philosophical concept via email (either ICANHAZCHEESEBURGER pictures or the best way to word a Craigslist ad for selling the boys) when she sent me a completely out of topic message: “if you have time and patience, would you do a post about electronic estate planning for writers”.

So what can I do?  Here are some more or less random thoughts based on my years of estate planning and probate practice.

Estate planning for authors must be more carefully thought out than ordinary estate planning. Authors have a unique form of property in a copyright of a work.  It is “intangible” property – in contrast to tangible property like cars, personal possessions or real estate. (Even bank accounts are “tangible” in the definition that I’m using).  And in the more common vernacular of “intangible”, your heirs may not even think of that form of property in dealing with your estate.

In ordinary estate planning, one aspect of what we consider is whether or not the client’s estate would have to undergo the probate process upon death – the court administration of an estate.  Most states have some form of easy non-court process – often nothing more than a sworn affidavit and a copy of the death certificate to claim property – for heirs to obtain their inheritances for small estates but what a “small estate” can be varies greatly from state to state.  Sometimes a court appointed executor for the estate ( or personal representative as called in other states ) can have powers that make such a court probate useful even if the estate would qualify for “small estate” handling. We can also use trusts – revocable (aka “living”) or irrevocable – to organize an estate to avoid probate.

Authors, with their unique forms of assets, can use a couple of mechanisms to make it easier for their heirs to handle their copyright works upon their death.  Certainly a well-drafted will can operate on an estate.  Finding an estate planning attorney who also understands copyright can be important because of some of the statutory issues in US Copyright law, e.g., the Section 203 right to terminate transfers has a specific list of who succeeds to the right upon the author’s death.  Consider that you may wish to separate control of your copyrights from the monetary benefit.  In other words, you may wish to appoint someone to have the power to license your works after your death to control how your work is exploited that is different from who you want to receive the revenue from those works.  That may require that your estate plan create some mechanism like a trust to hold those copyrights.

Another mechanism is to use a corporation or limited liability company to control the ownership of the works, then use your estate planning to decide who keeps control of the corporation and who receives revenue from it.  Perhaps using more complex structures like voting trusts to keep control the corporation in the hands of a trusted administrator while seeing that your heirs receive the benefit of the proceeds. That can be more complex to set up during your lifetime but less work for your heirs.

Now for this purpose, trusts are very useful and there are lot of really neat things you can do with trusts that are well drafted. The original purpose of trusts was to separate the benefit of property like income, rents, profits etc. from the control of the property.  But you won’t find a trust that is designed to work with intellectual property assets like copyrights and trademarks in a Nolo Press book or software will drafting programs or online legal document services. Estate planning firms charge serious money for drafting trusts and explaining to you how to use them.  Indeed, the latter is the real problem.  I can’t tell you how often I run across someone who has paid thousands of dollars to a law firm to draft a trust, then failed to fund the trust i.e., failed to transfer into the trust the property that its supposed to control.  If you don’t know how to use a trust, you’ve bought very expensive but not very soft toilet paper.

Now what did Sarah mean by “electronic estate planning”?

Today, so much of our lives are online, especially for people who feed themselves with words.  So much of our lives are also in our email, on websites, in forums and such.  Even outside of the literary world, when we handle estates we are finding a lot of trouble dealing with the deceased’s online life.  Some of it is obvious, like online banking.  If you don’t get mailed bank statements, it can be a struggle finding financial accounts.

So everyone needs to keep some records of where their accounts are, their email accounts with passwords (well, except for the ones you use to pay for your porn website subscriptions … don’t ask …), websites that they own, and such.  And it can be a good idea to have a list of online forums if you have a significant online life.  Our online lives are becoming more significant.  I greatly miss some online friends or acquaintances. There have been many times that I’ve been truly grateful that someone was able to come online and tell me of an online friend’s passing because they knew about that forum.  (This can also be true for a serious illness, some of us were very concerned about our ability to reach Steven Den Beste last year during his recovery from his stroke.)

But an author also has to consider how to organize for his heirs or executors the intangible assets of his writing business.  The copyrights that he holds, are they registered?  If not, is there documentation of the work sufficient to establish when it was created and published?  If they are registered, is there a list of all the copyrights for the heirs/executor to use to find them? What accounts are setup with Amazon, Nook Press, Smashwords etc. and what are the account credentials?

And pen names pose a special problem.  Some are only decorative, in that the copyright is registered in the author’s real name. Compare “S. Andrew Swann” works with the copyright page in the name of Stephen Swiniarski for example.  But its possible to register a copyright in a psuedonym that is opaque to the Copyright Office. Have you done this and if so, are there records in a convenient place for your executor to find?

Some authors use the tradename or “doing business as” registrations of their local Secretary of State to be able to accept royalty checks in their opaque pen names, do your records include these filings so that your heirs/executor can locate them and renew them if needed?

These problems are also among those more easily solved by an author owning a corporation or limited liability company that has in its records those works, or even has the works registered in its name as works for hire (see Kevin J. Anderson and his use of Wordfire Inc.)

Robin D. Roberts

http://www.robertsandroberts.net

CROSSPOSTED at According to Hoyt