Successful writers, musicians, digital artists and programmers (among other creatives) all have something in common: They generally receive royalties for their work that are paid out over time.
Good estate planning needs to take these assets into account – so that the creative involved can focus on their ongoing projects while simultaneously making sure that what they’ve produced will provide benefits for their family far into the future.
Living trusts and pour-over wills are especially useful
The two most commonly used vehicles to manage these kinds of assets are living trusts and pour-over wills.
If you assign your copyrights, royalties and other intellectual property to a living trust, you still retain control over those assets until you die. You can amend, change or even vacate the trust according to your goals over time. You can also change beneficiaries and heirs or revise the terms for the distribution of the assets after you’re gone as often as you need.
One of the chief advantages of this kind of trust is that it becomes irrevocable upon your death. Since trusts do not go through the probate process, this can ultimately save a great deal of time, effort and money for your heirs.
But what about any assets (and the royalties they create) that you make and don’t get transferred into the trust before you die? Since life can be unpredictable, this is where a pour-over will comes into play. A pour-over will can be used to capture any assets that weren’t already transferred to the trust. While the will does have to be probated, it will usually comprise a much smaller portion of your estate as a whole.
If you’re a creative with a growing portfolio of intellectual assets, find out more about what estate planning options are available.