Among the many lessons for creative people on the heels of such a tremendous year, filled with unexpected occurrences, is the shift from thinking about estate planning only as a plan in anticipation of death. It is also useful when you want to create a plan for temporary moments of incapacity. Here are a few highlights from the lessons learned throughout the year. Do not worry if this is your first-time hearing about these lessons. This list was created to help acquaint you with them.
Get organized. It comes as no surprise that the first step in planning is to know what you have and its present versus future value. Determining the present value of a sculpture could be as simple as factoring in the cost of materials and the time value of your labor. But estimating the future value of a music copyright or digital royalties that your new novel will earn can be a bit more difficult. That’s not all, you will also want to make sure each personal service agreement and copyright registration can be located in the event of an emergency. If these are stored in the cloud, then you will need to identify a person of trust and supply them with your login credentials.
Do some research. As part of your basic understanding on how estate planning works you will need to familiarize yourself with the Internal Revenue Code of 1986 (as amended) and the 1976 Copyright Act (for all works created after 1978) because these will help you determine whether to dispose of your interest in creative works during your lifetime or upon death. Proper planning now could lead to continuing revenue for your loved ones and support future philanthropic interests for years to come. While these laws are governed by federal law, you will also need to become familiar with state laws to deal with other estate and tax issues.
Create a plan. A little-known fact that many people overlook is that from birth everyone (in the USA) has a default estate plan. It is determined by state law. All 50 states including the District of Columbia have such laws.[i] While the laws may differ from one jurisdiction to another, the basic premise is still the same – when a person dies without a will, the state must determine who gets your property without any input from you or regard for your personal wishes. Hence the need to have a properly drafted will or trust, healthcare proxy, and durable power of attorney to guide those you have selected to handle your affairs in the event of death or incapacity is crucial. For many people, the process of preparing a will or trust after taking time to organize and educate yourself does not have to be a difficult process. This is why employing legal counsel at the earliest possible stage of your planning process can prove invaluable.
This article is written by an attorney licensed to practice law in New York and California. It was created for educational and informational purposes only. It should not be relied upon as legal advice or form the basis of any expectation that an attorney-client relationship is created. However, should the subject matter discussed herein pique your interest, then you are strongly encouraged to seek direct legal counsel.
[i] https://www.findlaw.com/estate/planning-an-estate/intestate-succession-laws-by-state.html.
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