Over the past century, the music industry has revolutionized Nashville, Tennessee, accounting for over 43,000 regional jobs and contributing $9.9 billion annually to the local economy.1 The international acclaim of “Music City” has attracted countless singers, songwriters, and entertainers to Nashville. As the industry continues to grow, professionals are becoming increasingly interested in avenues to protect their artistic legacies. This trend brings together two distinct areas of law—intellectual property and estate planning.
Intellectual property law encompasses an array of intangible rights that protect creators’ ownership over their work.2 One of the most common methods of intellectual property protection is copyright. Technically speaking, a copyright is a property right in an original work of authorship that gives the copyright holder exclusive rights over the copyrighted work.3 These exclusive rights include the right of reproduction, adaptation, publication, distribution, performance, and
display.4 Typically, only the copyright holder can exploit the copyrighted work for financial gain.
It is important to note that not all work product is afforded copyright protection—the creation must be an original work of authorship fixed in any tangible medium.5 The Copyright Act of 1976 defines original work of authorship to include literary creations, songs, choreography, movies, and sound recordings, to name a few.6 Although copyright protection exists from the moment the work is created,7 a lawsuit cannot be brought to enforce the protection until the copyright is registered with the United States Copyright Office.8 Moreover, copyright protection is not perpetual—works created after 1978 lose copyright protection and enter the public domain seventy (70) years after the creator’s death.9
Given the global preeminence of Nashville’s music industry, there are a substantial number of copyright holders in the city, many of whom are songwriters and artists. Copyrights, particularly those protecting readily accessible products like songs, often reap great economic benefit for their holders. Given the earning potential of a copyright, artists rightly wonder, How do I protect my copyrights when I die? The answer lies in an estate plan that considers the particularities of copyright transfer.
Generally speaking, an estate plan is a set of legal documents that control the disposition of an individual’s assets upon incapacity or death. Oftentimes, the plan is comprised of a will, trust, power of attorney, and other miscellaneous directives. Executing a comprehensive estate plan is of particular importance for creators of copyrighted work—failure to do so has led to lengthy legal battles with unsatisfying resolutions.
As an example, Prince Rogers Nelson, who is better known by his stage name, Prince, died in 2016 without an estate plan, leaving millions of dollars and a collection of copyrights in the hands of the Minnesota legal system. Under Minnesota’s intestate statute, Prince’s estate was to be distributed among his closest heirs.10 More than 45 people claimed to be among Prince’s heirs, of which, only six were found to be genuine.11 To further complicate matters, there were also issues in appointing an executor, valuing estate assets, and determining ownership of copyrights.12 Six years after Prince’s death and millions of dollars in attorney’s fees later, his estate finally closed.13 Without an estate plan, there is no way to know whether Prince would have approved of how his estate was distributed.
As the above example illustrates, establishing an estate plan should be of top priority for creators of copyrights. At first glance, it appears relatively simple to incorporate copyrights into an estate plan—after all, the author of copyrighted work can freely convey ownership of the copyright through any means of transfer, such as by grant, license, or trust.14 This conveyance of copyright ownership is complicated, however, by the statutory right of termination of transfer.15
Originally created to safeguard against an author’s lack of financial foresight, termination of transfer allows the creator to terminate the conveyance and recapture the copyright.16 If the creator is dead, this right of termination and recapture vests in the creator’s widow, surviving children, and surviving issue of any predeceased children.17 The termination of transfer may be affected no sooner than thirty-five (35) years after the creator’s original conveyance.18 The Copyright Act of 1976 provides that all transfers of copyrights are subject to termination, with only one exception—transfers by will.19
To avoid the possibility of termination of transfer, music industry professionals should consider conveying copyright ownership by will, rather than by trust or outright. The execution of a will typically requires naming an executor, the person that assumes a fiduciary responsibility to carry out the terms of the will and effectively administer the estate.
Pendleton Square Trust Company, LLC, provides estate administration services tailored to the unique needs of each client. As a result, we have experience serving as both executor and agent for estates that contain a variety of intellectual property, and our team understands the complexity of transferring copyright ownership by will. During the administration of an estate, we work with the client’s trusted team of estate planning attorneys, intellectual property lawyers, managers, and other advisors to safeguard the client’s artistic legacy. We are equipped with the skills and resources to ensure that your testamentary intent is upheld, even after your death.