How Estate Planning Works for Royalties in Florida

Writers, artists, actors, and musicians are primarily known for their creativity and entertaining endeavors rather than their financial future. We all know that most of them live a lavish lifestyle, not caring about their assets when they are gone. That is understandable because you cannot expect these creatives to bother about money management when they are focused on production.

Understand that these creatives not only get money from appearances, sales, and performance; they also get residual payouts and royalties from intellectual brands and properties. It is imperative that, as you make your estate plan, you include royalties and residual income so that you can avoid future setbacks or disputes.

Estate Planning Strategies for Royalties

When you are identifying the most suitable estate planning method for your assets, you should include assigning rights to trust and other important steps that will be explained below:

Build a team

For creatives, business managers handle very specific brand marketing needs, but when it comes to managing tangible assets, that area needs a team. This team includes the following: 

• Your estate planning lawyer

• A trust expert

• A wealth advisor

“Integrating business planning and estate planning will assist you in growing and preserving your streams of income for beneficiaries, ensuring comfort for your families, and knowing that their financial future is secured,” says attorney Jennifer Yu of Amity Law Group.

Create a trust

When you place specialty assets, such as trademarks, copyrights, and licenses, into a trust, a royalty income will be generated, and that can become a part of that holistic plan that helps families reduce taxes and have access to vital resources. If you place your royalties and intellectual property rights in a trust and not a will, that could prevent your family from experiencing the hassle of possible contests and mismanagement in the future.

This trust allows you to protect your estate's value and keep your heirs' inheritances private, unlike a will, which becomes a public record. It is especially beneficial for public figures and well-known creatives.

What Are Royalty Production Types and How Are They Transferred?

In summary, production royalties are payouts given to the owner of a property or resource. These payments usually come from the oil and gas extraction, mining, patents, music, and literature industries. There are two major types of production royalties. They are:

1. Intellectual property royalties

Intellectual property royalties are payments made for using copyrighted music, books, and patents. Transferring these royalties when the rightful holder dies is dependent on the type of agreement, laws that are applicable to the patent or copyright, and intellectual property.

For instance, copyright lasts throughout the right holder’s lifetime in addition to a few years, which varies among US states, and it can be passed on to heirs of choice.

2. Mineral royalties

They are payments made to the mineral rights holder or land owner by oil and gas manufacturers or mining industries.

The payments are removed as a percentage of the revenue derived from the mined resources. These types of rights can be intricate because they might be bequeathed or sold separately from the land. Also, that could last in perpetuity or for a certain period.

Conclusion

Irrespective of the strategy you choose to handle your intellectual property rights, you must involve an estate planning attorney for royalties in Florida. In addition, ensure you keep all beneficiaries involved in your plan abreast of possible modifications. If you have made a production, ensure your producer knows any mechanism you used to manage income in the form of residual payments or royalties.