0:00 [Music] Who are you? And where are you going? What do you [Music] want? Hello and welcome to Trust and Estates Weekly. I'm your host, Kevin Bemel, and we're here every Monday at 10:00 a.m. Pacific time to talk about all matters relating to estate planning and trust and estate administration. Um,
0:35 both from the standpoint of you doing your own personal work in that area and also for professionals like my guest and me who help people with estate planning and administrative issues. And so I don't want to take a lot of time to to um introduce the show. I want to get right to my guest, Kelly Wei. And Kelly is a an estate planning attorney, but also an intellectual property attorney. And so having expertise in those in both those areas of the law really puts her
1:12 in a she's the only attorney I've met who who is involved in both areas. So really puts her in a unique position with respect to estate planning for this this area of property which you know in our content uh um drenched world I think is is so important and and will become ever more important. So So Kelly uh first of all uh thanks for coming on the show. Welcome. Well thank you so much for inviting me. I'm glad to be here. Yeah. So, so you know, with with all of
1:48 my guests, I I you know, I I don't want to do a whole big elaborate uh biography of them. I'd rather, you know, sort of tell us a little bit about your background, how you came to have this, like I said, I think really unique combination of legal skills. Yeah. So, I decided I wanted to be a lawyer back when I was a teenager. And back then the what was important to me was I loved books and music. So I knew I wanted to do something that involved one or both of those. And I did not want to
2:24 be self-employed, which just shows that life is full of irony. But that was uh one my big criteria back then. And so I thought as a lawyer I could be working with artists and authors and musicians. So I'd be in that world, but I'd be working for a firm so I wouldn't be self-employed. and I could get a good paycheck to boot. So, it all sounded great and it was all wonderful, you know, until I graduated in 2010 and there were no jobs because we were in a recession, right? Uh, so, uh, it's a bit of a long story how I got to be solo practice. But, uh, basically that's what ended up happening
3:00 is I'm a solo practice lawyer and in order to expand my client base, I decided to add estate planning onto my practice areas. And now that's the bulk of what I do, but I still have the most fun with the copyright and trademark work. I can imagine. I can imagine. So, um, talk to us if you would about, um, what you see as perhaps the, let's say, the three or four most important considerations that, uh, either people
3:36 who have intellectual property or lawyers who are working with clients who have it need to consider when they approach. you know, this aspect of of of their estate planning. So, when they're doing the planning side, really what it comes down to is who's getting the intellectual property, who's going to manage the intellectual property, you know, where's it all going to go? If you're just like, I published one book and I make $5 a year, then, you know, you don't really need to think very hard about it. You can just say
4:11 that, yeah, the copyright goes to this person. They can do with it whatever they want. But if you have published a whole series, it's making good money, you got a lot of income coming in on it on a regular basis, then that's something where you really want to give it some more thought because you want it to keep making money. And so you need to really think about who's the best person that can keep that money coming in, who can continue to market the book, and do I want that to also be the person getting the income, or do I want the income to be going to some other person, and that person's just the manager? So, a lot more moving parts when you have a
4:47 lot of income coming in and things to consider. But that's really what it boils down to is who do I want to benefit from it and who do I want to manage it? And and you maybe I should have asked this question first. So define for us, if you will, intellectual property and and and give us, you know, examples of it so people people understand because it really goes beyond books and music these days, I think, right? Yeah, it does. Uh, so intellectual property, it's an umbrella term. It refers to any kind of property that has
5:25 value. You can buy it, you can sell it, uh, but it's not a physical thing that you can reach out and you can touch. It's why it's called intellectual property. It's property of the mind. And there's a bunch of different categories. The three main ones that most people are aware of when it comes to intellectual property would be copyrights. That's your books, your music, your movies, your creative works. Okay. Uh then you have trademarks. That's more for the business people. That's your branding. How you identify yourself in the marketplace so that consumers know who they're buying from.
6:01 And then you have patents. That's the science side. inventions, formulas, processes, uh things that are patented at the US patented trademark office. Uh so th those three tend to be the most common forms of IP and the ones that you most typically are going to want to think about when you're doing your estate planning is are they still going to be around? Are they still going to be making money? And how can I make sure they keep making money? Okay. And and so taking those three categories of intellectual property, uh what what are the ways that they typically generate
6:38 some kind of value then that has to be understood and and and I guess analyzed to to see if it really needs to be part of uh you know an estate plan if there you know if there really is any value there. Like I I'll give you an example. This has been a lot of years ago. I used to get this publication and it was focused only on valuing brands and each quarter I think it was it would give the value of the most uh valuable brands in the world. It was usually like CocaCola,
7:13 you know, and and these it was astonishing the value of the Coca-Cola brand. Even back then it billions and billions and billions of dollars and that was my kind of in that was my introduction to to under I was an appraiser at the time. Uh that was my introduction to the value. So I could like in a company like Coca-Cola, I could see where wow, yeah, there's a tremendous amount of value there. Uh for, you know, a company like mine, I mean, I do my best to brand, right? But I I I'm skeptical that I build any value there. So talk to us if
7:50 if you would about kind of the value issues that that you know relate to each category um and and and how those need to be uh maybe analyzed and and dealt with. Yeah. So like you said all of them have a value and you know when you're administering an estate you have to come up with the date of death value for everything which would include the intellectual property because those are assets that are subject to probate. if you don't put them in a trust. And so you do have to come up with a value for them to see if the estate is over the probate threshold or
8:26 not. And there there's different ways to go about uh putting a value to it. Like with a patent that hasn't actually been used yet, for example, probably the most typical way that would be done is what would be the cost of recreating the invention. uh and that would be the most likely way to describe and get a value for a patent that hasn't actually been put to the market yet. Uh whereas with a copyright like a book, uh you might do like you do with real estate where you look at
9:01 comparable sales and uh you do a value based on some similar things that have sold recently and they're and what they sold for which is great when you can do that. But with things like copyrights, that one can be tough just because what really is a comparable asset. Right. Right. So, you know, it's great when it works, but finding something that's truly comparable can be really difficult. Uh the other one that's uh probably the most common uh it involves more math, but essentially coming up with a projection of predicted future
9:36 earnings. Mhm. And so, yeah, and you know that one, like I said, you're you're making a prediction, but what do you think is likely to be the future income stream from this asset? And that's probably the most the one that's the most commonly used is figuring out that future income stream to determine a present- day value. So, interestingly enough, I was working on just such an analysis before the show started. In this case, it wasn't for intellectual property. it was for a billboard um owned by a that a billboard that's on a property that's owned by an estate, right? And um someone has come along and
10:13 said they want to buy not really the billboard, they want to buy, I guess, the rights to um to lease out the billboard. They want to buy us out of our lease in essence. And the question is, you know, wh which is better to continue to get the rental from the billboard um from the billboard company or to get take the buyout and and have the cash up front. So, I'm doing a you know a discounted cash flow analysis. I will say that chat GPT makes that a lot easier, I bet, than when I used to have to do this by hand because
10:48 I can just prompt my assistant for, you know, formulas to plug into Excel and all that. Okay. So, so we've got, you know, compar we can look at comparable sales in essence of of some kind of intellectual property or we can look at some sort of projected some sort of present value based on a projected income stream, right? And uh I mean is is this the kind of thing a as as an attorney who advises people on this, will you do this kind of work or or how do you how do you I guess
11:23 facilitate helping the client figure out whether they have valuable IP uh that that then needs to be addressed in in an estate plan. Um, I'm not one of those people that enjoys doing math. So, you're not going to see me crunching the numbers. Uh, I'm more likely going to be saying, "Well, how much is it make? How much is it making now? How much is it likely to make in the future?" And use that as a gauge for, you know, how complicated a plan we want to be putting together right now. Uh, most of the time, uh, when I get looped in, the things that I'm figuring out, like I said, who is it
11:59 going to go to? Uh, who is going to manage it? and is that going to be the same person? And that tends to be the most frequent thing that I'm helping them to figure out is how do we incorporate this into the estate plan uh so that yeah, the money goes where we want and it continues to actually make that money. And and you mentioned there's there's kind of two parts to that. There's the sort of manager, maybe the rights manager, whatever we'd call that person, and then the person who's going to actually collect the money. It could be the same person, but it may be two different ones. So, how do you work with your clients to determine, you know, who
12:36 is going to fill those roles? Uh, so again, it's a conversation. So, if we're talking somebody, you know, the $5 a year person, you might as well just give it outright to the person you want to collect the proceeds. They're not going to do much with it most likely, but it's not making much money anyway, so it's not a big deal. uh when you're talking again the I you know I'm getting regular income my entire living is on these book sales then that's a point it's like okay so first who do you want to get the money and second is that
13:12 person somebody who can manage it and do all the marketing and everything else that you're doing to make these sales keep happening you know are they a good for both of those things or are they not a good manager and you need somebody else to do the managing while they get the income and the benefit benefit and assuming that the the recipient of the of the money is not a good manager or maybe it's you know they want their children to get it so their children aren't even old enough to manage it. So what do you do in that case?
13:47 So in that case where the beneficiary is not a good manager then it's uh you know who in your life would be someone who can manage it well and oftentimes you know people who are making good money they have an agent or a manager or something along those lines already. So most of the time it's simply authorizing that person to continue managing after their death. And so often times if it's making good money, they already have someone like that in their life that they can appoint. And if they don't, then yeah, it's who do you trust? You
14:22 know, do you want to hire a professional? Do you want to go out and interview people or is there someone that you feel would do a good job and can do all the things that you're doing and, you know, keep that money going? Okay. Um, so it it occurs to me that, so I have a a friend, he he's written a series of books. Um, they're they're actually detective novels. Um, and and he and his wife, they they live off the proceeds, right? Uh, look, at some point, uh, you know, he's going to pass away. Um, presumably it's going to go to, you know, whatever money it's still
14:58 generating is going to go to his wife. But at that point, once he's gone, there probably isn't going to be any more intellectual property created, one would assume. Or is it it, you know, do you take into account well um you know, one that leaps to mind for me is uh um hoot trying to think of the author. One of the authors I used to read, oh, I know who it was, uh, Dick Francis. He wrote a series of books, detective
15:34 books. They're all set in England against horse racing. Uh, loved his books. When he died, his son took over writing the books. They actually wrote a couple together toward the end of his life and then his son took it over. Right. So, um, how do you deal with the potential continuation of the development of the IP, which strikes me as being a different issue from merely what we might call the exploitation of the existing IP? Yeah, you're right. That is a separate issue. And, you know,
16:09 the general rule is whoever owns the copyright can make whatever additional derivative works they want to make. So uh you know it could just be as simple as that where you give the copyright and the copyright owner if they want to keep writing uh more novels or making more works can do so or the other option is you know for example maybe you wanted to stay in trust and your trustee is your manager and uh you can specifically say in the trust whether they're allowed to continue making derivative works or whether you know once I'm gone it's done
16:44 and you know different People want to do things different ways. Some people, like you said, they want to see the legacy keep going. And they'd love other authors to come in and pick up the reigns. And other people, no, it's mine. Once I'm gone, it's done. Right. Right. So, yeah, if that doesn't matter to you, you don't have to say anything and it's up to the new copyright owner. But if it does, you want to make sure to say something. So I'm reminded of I think one of the most one of the best known cases which is you know James Bond right where uh Cubby Broccoli's I think son and daughter took it over and they made it they you know originally the deal was with United Artists and there's been a
17:19 big thing now I think it is with Amazon they I I think I read sometime in the last couple of weeks it's been resolved but but there's in this case it seems like it was unclear who really had the authority to um make decisions about u the on the ongoing uh you know works that the derivative works that could be made you know of the copyright. So um you know in this case we're talking probably billions of dollars. That's not
17:55 where most of us are going to be playing this game, but but it it does show you the stakes can be extremely high and as can the cost to work them out. So yeah. Yeah. And uh that is another issue that can come up. But when I get brought in on the administration side, that's the most frequent question is well what happened to the copyrights? Uh who owns it? What rights do people have? Frequently we have people like oh that he has a manuscript but it never got published. I want to publish it or something along those lines and it's a question of well I need to see the
18:31 documents. You know the first thing that has to get answered is who owns the rights and then you know I can tell you what you can do once I know what happened to it. Right. Right. Good. I'm going to take take a break here just a minute um to remind our viewers this is Trust and Estates Weekly. Uh we're here every Monday at 10 a.m. Pacific time. My guest is Kelly Weey, who is an estate planning attorney, but also an intellectual property attorney, and we're talking about estate planning and intellectual property. Uh today's show is sponsored by Probate and Trust TV.
19:09 This is a new YouTube channel that aggregates all the best content on uh estate planning and probate and trust administration. So, if if you especially if you're a professional and you're looking to get questions answered on a ver a whole range of subjects from um uh various types of trust, complex issues, legal, accounting, tax issues, probate and trusts TV brings that all together for you in one spot. So, I encourage you to
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20:21 posts on, uh, on YouTube. So, going back now to our topic of estate planning with intellectual property. So, Kelly, what what happens if the owner of some IEP dies in test date? So, they're they you know, they're they're they didn't leave a will. They there was no trust, right? And here's this and and let's let's, you know, take a case where the the intellectual property actually has some real value, right? what's what's
20:56 going to happen in terms of um the income stream from from that IP but also in terms of ownership of the copyrights or you know ownership of the patents or you know or the trademarks what's going to happen with that so as far as the management whoever it is that steps forward to be the personal representative to be in charge of the estate until the probate is closed they're going to be the one who's in charge of managing it. And you know, this is a reason why if you're making money, you want to plan these things in
21:31 advance because uh pretty good odds if you died in testate, whoever it is that's stepping in doesn't have the foggiest idea what to do with your IP. And so what's probably going to happen in that case is that it's going to languish. it's just going to sit there gathering dust and becoming less and less relevant uh while they work through the probate process because the person maybe they know about it, maybe they don't, but most likely they won't don't won't know what to do with it. And then once everything is finally all said and done, it's going to be divided among
22:07 your heirs. you know, unless there's somebody who's, you know, raising their hand and saying, "Me, me me. I want the copyrights that or whatever the IP is, then everybody's going to be equal co-owners of it because that's the way it normally works." And I don't know about you, but having a whole chunk of people that are co-owners of something a money managing thing like IP just does not sound like it's going to work very well. I I haven't checked up on the Prince Estate recently, so I'm not quite sure where that one landed, but six siblings being co-owners, and last I heard, uh, you know, you had three of
22:43 them put their assets into an LLC, and three of them put their assets into an LLC, and I guess the two LLC's are working with each other. I'm not quite sure, but to me, it just sounds like a whole lot of hassle. Yeah. I mean I mean I haven't handled an estate with I with significant IP in it. Um at least not yet. Although it's I I frankly would love to have the opportunity because I've been involved with IP since I was a law clerk going back into the uh you know mid early mid 1980s. Uh and and so
23:18 the the subject has always uh engaged me. Uh but I the idea of having you know multiple not not not in so much multiple owners of a copyright but multiple people have a say as to what's going to happen with it seems strikes me as being a good way to basically destroy the value of that copyright. Uh you know just you know three people five opinions kind of thing. Yeah. Yeah. Exactly. if they if they don't work together well, if they can't make decisions together or
23:55 if they just have different ideas about how this is supposed to get done, it's just going to be a nightmare because they're going to be stepping all over each other and fighting with each other and in the meantime, the IP is going to suffer. So, taking kind of the kind of IP we've sort of been talking about I think is more like copyrights. But let taking another example, let's take a trademark example. Let's say that there was you know the the estate includes a business and for what you know however it happened the business has a trademark that is a significant asset of of the
24:33 business. M so uh you know again let's take take kind of the same situation though you've got a uh um an estate you've got someone who's died in test state um but they one of the assets is this company which owns this uh trademark of significant value. So what what are what are the issues there uh that that uh you know people need to be aware of uh either to avoid such a situation or to deal with it once it's been you know dropped in their labs.
25:08 Yeah. With trademarks that can be a little bit trickier because that's business and then you run into the question of how is the business held? Is it a sole proprietorship? Is it incorporated? Is it LLC versus S Corp? and all those other questions and you know again was the trademark owned by the business or is it owned by the person? So that's another layer of complexity to figure out when you're dealing with a trademark in an estate. Uh we'll just let's assume that it's a sole proprietorship. Mhm. uh so not incorporated and they have a trademark
25:43 and they did pretty well as a sole prop and even though they never incorporated but still doing well overall and they die in test date and then the business is going to be an asset and the trademark is going to be an asset and you know once again generally speaking things get split all every which way divided equally unless there's somebody that specifically wants that and with the business You know, again, you also have the complexity of who's qualified to run the business. Is this something that just anybody can step in and take over, or is this something where you need specialized credentials in order
26:20 to, you know, be allowed to run the business? Mhm. And with businesses, I I think it's more likely to happen that the business is just going to get liquidated and the whole thing is going to get sold unless you can find somebody among the beneficiaries who is uh who wants to take it on and is qualified to do so. You know, and you brought up something that I I haven't thought of that that seems to me even potentially more fraught. And that is let's say you have a situation where the business is a corporation whether it's an S or a C corp doesn't matter uh but for whatever
26:57 reason the the trademark was owned outside the business what comes to mind is uh Walt Disney Productions where um the family Walt Disney's family through a a a sort of a family-owned business called Rhett Law owned among other things the name Walt Disney with the sort of the way that it was, you know, calligraphed, calligraphy, whatever it is, right? Um, and Walt Disney Productions, the act the company that was exploiting it didn't own it. And so,
27:32 uh, you know, now you have this splitting. So, how how could that possib uh the value of the business if um, you know, if those two were separate? It it seems to me that that there could be a possibly large demunition in the value of the business if the copyright, you know, doesn't get sold with it or or or doesn't is can't the business can't compel its ability to use the copyright or I mean not the copyright, I'm sorry, that can't can't
28:07 be compelled uh you know can't compel its ability to use the trademark I guess is what? Yeah. Yeah. I would agree that that would impact the value of the business if the name that it's operating under is actually owned by another entity and they have a license that can be rescended at the whim of the actual owner. Yeah, that would definitely have a impact on its value because they could be forced to rebrand at any time and then that would be a massive blow because they'd have to spend a lot of time and money in order to rebrand and educate the public on their new name. So
28:42 yeah, if someone does incorporate, then ideally that corporation should be the owner of the trademark, which also makes things easier if there was going to be a probate because the business itself, the a corporation is its own entity. So the entity is not subject to probate. However, your ownership interest, that part is part of your estate. So, the ownership interest is going to be subject to probate, but the business itself, particularly if it's a multi-person business, you know, multiple people go in, they can continue
29:17 to operate and run as normal while they're figuring out where that person's ownership share goes. Mhm. Um and uh um you you mentioned I if the if the business has a license to use the trademark uh what what happens with that license let's say that you know the light when the p when the um you know when the deedent dies the license uh at least you know a term you know according to the terms of the document says okay it has another five years to run, what
29:54 happens to that license as a result of um you know the the administration of that estate? So a license is basically a contract. So it really comes down to what the terms are. So if the contract says you have the license, you have permission to for the company to use this trademark until I die and once I die then you have five years to uh before you are no longer allowed to use this license. you know, then that gives them a heads up that it's time for them to start working now
30:29 on a new platform and new branding or go back to the uh executive or whoever's in charge of the estate and see if you can work out a new license. And uh you know, if you can get them to sign a new license and that's great and dandy and that's wonderful. But uh if they say no, no, the contract's the contract and we're sticking to it, then yeah, you have five years to get your act together and figure out a new brand and start switching over. Okay. and from the presumably if again this is a situation where the trademark is owned outside the business right that's why there's a license agreement so now the heirs to
31:04 the estate um they're they're going to become in essence the uh license sour no they're going to become yeah the lensur right the people who are giving the license um well the while it's in probate or while it's being administered the executive would be the license it's not until it's actually been distributed that the beneficiaries would become the lensur. Right. Right. Um so so the the executive right the executive and then the beneficiaries of the estate that that's kind of the chain of the license if the company decides to
31:40 rebrand what then how would that impact uh do you think the value of that trademark? Uh yeah, that that's why you got to be careful with these licensing agreements because if we go back to the Walt Disney example, you know, Walt Disney is very much tied to the corporation. I really don't know what they would do with that trademark if they decided to not let the corporation use it anymore. And I don't know how much value it would have uh if they no longer tied it to the company and decided to use it on something
32:16 different. I I think that that would in many circumstances be an unwise move on the part of the trademark owners. But again, it really depends a lot on the circumstances and whether they think that they could do something with that brand that's better than what the current arrangement is, right? So I guess if their thinking was, well, we can start another Disney company maybe that'll do, you know, better. I I mean I think if as I recall at one time going back to the James Bond example, there were actually two James Bond tracks, one being followed by uh Cubby Broccoli's uh
32:54 children and another by I think it was MGM who both claimed ownership of of the in this case it was a copyright. Um but but there they were and then they finally sort of got together and and stopped doing that. I think they've I I'm guessing they must have thought they were cannibalizing each other or something like that. So, um so I I guess it's it would be a it would be a negotiation then between the personal representative and and the company. Um although um I I could imagine a situation where
33:30 you know the ownership of the company is uh you know essentially in the hands of the executive right and and so is now what happens with the license. So it it seems like the executive or the personal representative would be in a good position to work out something favorable at least economically. uh you know for these you know for these two groups do yeah yeah if the executive is the owner of the brand as well as the
34:06 controlling ownership share of the company then in that case there's not really a whole lot of conflict there because you know you're not going to you know cut off your nose despite your face. uh it it really only becomes an issue when the people who are running the company are different from the people who have ownership of the brand and that's the point where you have a potential for conflict where you might have one side or the other not wanting to associate with the other anymore and then and then you have the issue of uh you know how do we work this brand and uh you know do we have to rebrand right right I I could imagine from the
34:42 personal representative standpoint the challenge would be creating a license agreement that allowed the company to continue using it, but one that uh fairly valued uh the value of the trademark so that the trademark owners are getting compensated appropriately while while at the same time the company is continued to you know continue to allow to use it but also is not so unduly burdened by the cost of the license that it can't operate properly. Right. That seems to me to be, you know,
35:17 a situation where you're going to have to bring in some uh, you know, professionals who who, you know, very deeply understand the value of trademarks and and all of that to Yeah. Yeah. carefully drafted contract where Yeah. Like you said, it's mutually beneficial and the trademark owner gets uh some sort of compensation or something to let them continue using the trademark, but you know, at the same time get some control so they don't feel like they've given it away and uh you know, they don't have any further control over it. Right. Right. I'm just I'm I'm kind of thinking this out loud that I think if that were me, you know, I'd work something out and then even if
35:54 I didn't have to authority-wise, I think it would probably submit it to the probate court for the probate court's blessing to make sure that it didn't all explode when the probate closed, right? So, because so often, you know, everything seems great and then, you know, people change their mind. So give them a chance to object in court before it becomes yeah that that's the way it typically works in probate is pretty much everything you have to notify all the beneficiaries this is what's happening this is what we're doing this is what we're proposing and you know they always give them a chance to object so you know the court can't say well
36:30 wait a minute you know whatever and as long as nobody objects and it seems like everybody's on board most of the time the court will go with it. Mhm. So, shifting uh gears a little bit here, a couple of times you've mentioned um well, if somebody kind of raises their hand and says, you know, I want this. So, talk about that uh prospect as as a potential way for dealing with uh you know, ownership of of intellectual property. What What do you mean by that? And how might something like that work? Yeah. So we'll
37:05 talk about copyright specifically because that's the one where most typically ownership is shared between the various beneficiaries. So if that's not the outcome that people want, if let's say you have four kids and you know three of the kids could care less and one of them's like, "Oh, I really want to keep mom's uh you know, whatever alive. I I want to keep her book going." Then what would most likely happen is, you know, again, you got to get a valuation because everybody's supposed to get equal shares. So if they were not specifically given that copyright, then
37:41 that copyright needs to be factored into the value of their share to make sure that everyone comes out equal and then they'd just be getting less cash in exchange for ownership of the copyright. Oh, okay. So, so there's it's kind of like a negotiation between the heirs and how the various assets are split up and and uh Okay. Yeah. Yeah. Usually it's up to the executive or the trustee to decide how things get split as long as the value at the end of the day is equal between everybody. Uh but yeah, they'll
38:16 take into consideration if somebody says, "Oh, yes, I really want the copyrights." or hey, I really want mom's coffee table or what have you. If somebody says that they really want something and you know, nobody else objects to it, then yeah, they'll factor that in and you know, include that in their share and just make sure that it all evens out at the end. Mhm. Okay. That and yeah, and that that certainly makes sense and that may very well be a a good solution to avoid multiple people owning something and the difficulty of, you know, coming to terms with what's going to happen with it. So, yeah. Yeah.
38:52 I've had that occasion where, you know, you have, I don't know, six, we'll say, people co-owning a copyright and one of them really wants to pursue it and four of them don't care and then you have uh let's see, what is that? That's five. So, yeah. And one person saying, "Oh, no. I don't I don't want this to be published. I I don't want you to do this." and you know then then you have a real sticky situation which is why it's better to just explicitly state in the estate plan documents what happens to that copyright so you don't have that question. Yeah. Yeah. I'm I I I'm not
39:27 directly involved in this situation and it doesn't involve IP but I think it's it's instructive of what happens. There's situation where there are uh three or four siblings. I I I forget. I think it's three, but there may be four. Um, parents died, left behind a house. Um, there there wasn't agreement on on to sell the house, and so they continue to own the house, but one of the siblings ends up with all the work looking after the house, seeing
40:02 it's rented out, all that kind of stuff. and the other siblings, you know, they they get a cut of the rent, an equal cut of the rent, right? But it's, you know, it's the burden only falls on one of them and uh, you know, from talking to the, you know, the fellow who is the one who has to do all the work. I mean, it's maddening sometimes because, you know, they make demands about how things will be handled and it doesn't affect them hardly at all, but it takes them a tremendous amount of time and effort to get them done. I can imagine the same thing can happen with shared ownership of a of a copyright or or other
40:39 Yeah. Yeah. co-ownership can cause a lot of problems if people are not on the same page. So yeah, I would not really recommend deliberately getting into a co-ownership arrangement unless uh yeah, you know the person very well and you know that you're on the same page and you can work move forward together. Now, when there's a situation where there isn't professional management involved, um what have you seen, if anything, about uh one of the beneficiaries maybe, you know, getting
41:16 compensated for managing the IP on behalf of all the beneficiaries. So, so they're not stuck in this situation where, you know, they're having to do all the work, but they only get their, you know, prata share of of the income. Yeah. And that's something that could absolutely happen. Uh, you know, again, you got to make sure people are on the same page. But, uh, you can say, "Hey, there's six of us and have and that's too many cooks in the kitchen. Let's all vote and, you know, this one person's going to be the one in charge." And that can work. Uh so yeah, that's another way to get around that problem is, you know,
41:51 don't give up your ownership share perhaps, but agree on who's the one who's going to be in charge and how is that going to work, right? And then maybe that person will would get compensated for for the work involved. Yeah. Yeah. And that's only fair. Yeah. Yeah. I I I I would think so. I would think so. Um you mentioned professionals. um assuming that the original uh IP developer, you know, didn't have an agent or a manager, uh and and there's no one with the expertise to do that. Where might um an executive or personal
42:27 representative go to and maybe and let's say the personal representative didn't have the expertise which would be unusual uh if they did. Where would they go to find someone who could, you know, help with this situation? I know I'm here in LA. There's I can probably throw a stone and hit four people, right? But most people are, you know, not in a city like Los Angeles, right, where where there's a lot of that around. Yeah. Yeah. Unfortunately, I can't really give a solid answer for that because like you said, it depends a lot on geography. It
43:02 depends on what the IP is. You know, even when you're the creator, finding a good agent or a good manager is tough. So I can't really recommend any particular avenue or resource for people to go to just that that is an option is they can try to find one but yeah that finding someone who first of all is good and second of all who is willing to take this on that is going to be very difficult if there's not somebody there already. Yeah. Wow.
43:37 Um I mean and and I I could imagine if you know if someone is a personal representative they don't have the ability to manage the IP and yet finding someone who can is is difficult. It really puts the estate in a bind because this IP could lose its value like you said kind of dissipating through lack of use and you know what what's what's going to happen is is is the personal representative going to be held you know liable if you will for that loss of value.
44:14 uh you I mean it kind of depends on how much value you're talking uh you know if again if it's not particularly valuable to begin with then I don't think anybody's going to really say much of anything uh whereas you know to take another celebrity example Elvis Presley was worth 10 million at the time of his death and 7 million went to the IRS because uh estate taxes were done differently back then which is another reason to do planning Uh but within two years that 3 million had gone down to 1
44:49 million. Uh and that was the point where the court said something is very very wrong here. And the court actually took it upon itself to hire an investigator to look into what was going on because you know Elvis Presley's estate that should not have been something where the assets were dwindling and uh that was how they found out that Elvis's manager uh you know he got Elvis got 22 cents on the dollar uh and the manager had set things up so that he got everything else. Wow. During Elvis's career and he kept that system going. He convinced uh
45:26 Elvis's father, who was the personal representative, to keep him as the manager. And so it wasn't until the investigator came in that he said, "This is egregious. This is way outside of industry standards." And not to mention, he's obviously doing a bad job here. He has to go. Right. And the journal, right? Yeah. Yeah. And so I don't think that uh the personal representative got in trouble, but the manager did get fired. And it wasn't until then that the Elvis estate really got cooking and it became the behemoth that it is now.
46:01 I I that's that's so I had no idea. First of all, I had no idea he paid so much in estate taxes, which even granting that they were much higher back then, still 70% of your estate. Wow. I mean that that even now it's if you end up paying estate taxes, it's only 40% above the, you know, exemption. Uh but uh wow. And then to diminish down to a million dollars. It it's it's kind of amazing that someone was able to turn that around. Uh yeah. Which again underscores why having the right manager is so critical. Yeah. Yeah. I mean you
46:38 with Elvis we're talking music movies. Um and just the Elvis Presley name would have been a trademark had trademark value of some kind. Yeah. I heard the IRS's still feels that they got jipped because they didn't consider the right of publicity value uh when they estimated the estate taxes. Oh my gosh, that would have wiped out the rest of the value of the estate. It's entirely possible, but they didn't think of it, so they didn't get it. And apparently they felt sore about it for a while after that. Okay. I you know, well, I think the
47:14 lesson we're doing was like like don't be famous. I'm not sure. I I think the lesson is get your ducks in a row, right? Exactly. Exactly. Well, um we're we're coming up on our our time limit. And um I So this is the time that I that I always give the shameless plug for my guest because I know they will not do it. Um, but it was a perfect segue, Kelly, because you know, if you if you do have intellectual property, uh, you know, that you own and work on. So, you
47:50 need to have an estate planning lawyer like Kelly who understands these issues because as you can see and and and I like I mentioned earlier, I've been dealing with intellectual property well for a long time, probably longer than Kelly's been alive. She's so young. Um, and and there were aspects of it that were not on my radar. and I deal in trusts and probates and estates, you know, all the time. So, uh, you know, um, Kelly mentioned early on, you know, if it's not in trust, you
48:27 know, again, if you have any kind of significant, uh, pro, uh, intellectual property, you probably need to talk to somebody who who could potentially create a trust for you. you can avoid lots and lots of problems by by you know having your property uh your estate in a trust as opposed to having to go through probate. You noticed a lot of the discussion focused on what would happen if the person died in test state. That's so often where a lot of the biggest problems come. So I I invite you I
49:02 encourage you to to contact Kelly. Her contact information will be in the show notes. Um, so you you know, you can you can get a hold of her and um I'm I'm sure she'd be happy to uh work with you to make sure that um not only is your estate properly planned, but your legacy is maintained in the way that you want it to be maintained. Um you know, so often we talk about fights that happen between uh children. Um, oftentimes there's a there's a reason
49:37 why those fights happen and it's because parents have not made their wishes clear. Um, and so it leaves open the opportunity for for children to fight and if you know properly drawn up estate plan has typically been socialized with the potential beneficiaries as well so that they understand what what needs to happen once uh, as Shakespeare said, you shuffle off this mortal coil. So, uh, you know, and you won't find anybody better than Kelly, especially when it comes to the intellectual property side of estate planning. So, uh, any any
50:13 final thoughts, Kelly, before we, uh, before we sign off or I think we covered all the big ones. Uh, just one more thing to think about. If you're passing on a large amount of money, you might want to think about educating your beneficiaries to so that they use it wisely. Indeed. Whether the money is coming from IP or is just coming from whatever source. Absolutely. Yeah. Yeah. To uh continue the Elvis Presley example, Lisa Marie Presley uh about 2005 sold 85% of her ownership
50:51 interest in the estate for $115 million, which again shows how things go when you have a good manager. And within 10 years, that money was gone. And I haven't followed up since her passing, but I think I might have heard that she might have had more debts than assets at at the time of her death. Wow. Wow. Shocking. Shocking. Yeah. I saw her divorce proceedings shortly before she died showed she had an she spent $90,000 a month. Just kind of boggles the mind. But uh going back to my point uh just uh if
51:29 you're giving a child a lot of money, make sure that they know how to manage money properly. Absolutely. Absolutely. Well, a a great a great last thought to to have. So, um I'm going to have you hang tight, Kelly, for just a minute while I sign off and then we can talk offline for a moment. So, folks, thank you so much for joining us today. I know we've got I see a number of live viewers. Uh that's that's obviously a testament to Kelly because there's more today than than usual. So it's not to see this mug. Um but thank you for joining us. Um and if you
52:04 have any uh comments, questions, uh criticisms, all the social media links will be in the show notes. Feel free to drop those in there. Uh tomorrow at 10:00 a.m. Pacific time is my show, Business Lessons from the Military. And my topic is the battle of PaloAlto. And you may be saying to yourself, I have no idea what that is. That was the precipitating battle to the Mexican-American War um in the sort of early to mid 1800s. Uh and so we're going to look at
52:40 what business lessons can be learned from how that that battle played out. And then on Wednesday at uh 10:00 a.m. Pacific time is my show, People Making Money, and we're going to talk about Invest with Caution. This is a guide for dealing with a tumultuous market, uh which is something we've seen here for uh the last few weeks. Um I I talked to a lot of people and they're like, I don't know what to do. So, I'm not going to tell you what to do, but I'm going to give you some thoughts on how you might
53:16 approach things uh for now. And then on Wednesday, I'm sorry, on Thursday at 5:00 p.m. Pacific time is my every other week show, Jiggers's Place. We're getting toward the end of the week at that point. We're going to have a cocktail and we're going to talk about duty, right? What is our duty to ourselves, our families, to society, our country? Uh, you know, I was having a conversation with someone a couple of weeks ago now and I was talking about I have a duty to do this and that and they
53:51 looked at me like I was from another planet. So, I think it's time we re-engage with this issue and and we're going to have a I don't think most people would consider this a cocktail, but we're going to have some grog, which is what the Navy always served out. And being an old sailor myself, I always can I always associate the Navy with duty. So, that'll be Thursday at 5:00 p.m. Pacific time at Jiggers's place. I hope you'll join me. So, uh, and then of course a week from today, we'll be back for the next edition of Trust and Estates Weekly. My guest will be Andrew Nutbr.
54:27 Uh, he is an estate planning attorney here in Los Angeles and he's going to talk about crossborder estates issu estate issues. So, this is another sort of case of first impression to use a legal term for trust and estates weekly. We I really haven't covered this topic. What do you do when there are assets in an estate that aren't here in the US? That will that can significantly complicate things. You can see Kelly is is is nodding her head. Yes. Yes. Yes. Looks like you've had some experience with this. A little bit. Yeah. Yeah. Yeah. Just just enough to cause brain
55:02 damage. I've had a little bit of experience, too. So, I'm looking forward to the conversation with Andrew. So, Kelly, once again, thank you so much for joining me today. Uh really a great conversation. and appreciate it very much. And uh for all of you, wishing you a wonderful rest of the day and signing off as I always do. Marie darling, you are my bell. Courage at all times, my friends.