Wednesday, December 14, 2016

Selecting a Literary Executor



Final Drafts

Literary Life After Death

By Lloyd Jassin & Ronald M. Finkelstein 


"I'm sorry to have my name mentioned among the great authors
because they have the sad habit of dying off."

--Mark Twain (d. 1910)


"Money is the root of all evil"
For I will write in my will
"I regret that I was not able to love money more."
--Jack Kerouac (d. 1969)


While great writers may have the sad habit of dying off, their literary legacies (and royalty checks) tend to live on. If books or plays comprise a substantial part of your assets, now is the time to consider tax and estate planning issues. This article deals with one aspect of estate planning -- the administration of your copyrights, letters, unpublished papers and contractual relations after you have taken your last bow and the proverbial curtain has come down.

If you are a novelist, playwright, lyricist or composer, advance planning is critical to ensure that your literary legacy is protected after you die. While during your life you may be able to play catch-up with legal formalities, unless you have a well-drafted will, or have created a valid trust (or both) for the benefit of others, you have left ownership and care of your copyrighted works and papers largely to chance. In addition, finding a long-term, nurturing home for your papers should not be left for the last minute. Authors should consider naming
a "Literary Executor" in their will.   An "executor" is a person responsible for settling a deceased person's estate. Among the duties of a General Executor -- as opposed to Literary Executor -- are contacting an attorney to file a petition for probate of the will; collecting debts owed to the estate; filing for life insurance and other benefits; contacting an accountant (or attorney) to prepare the decedent's final income tax returns, a federal estate tax return and state estate and inheritance tax returns as may be required; and notifying the beneficiaries named in the will. 
TIP:  Bear in mind that there is a clear distinction between the physical possession of letters and other papers on the one hand and ownership of  the copyrights in those letters and papers on the other. While your papers may reside in a university library, the intangible form of that property (i.e., the copyrights), unless assigned to the institution, belong to your estate. 
A Literary Executor, as opposed to a General Executor, is the person selected for the limited purpose of managing your literary property when you pass on. One court described the Literary Executor's role as "requir[ing] a delicate balance between economic enhancement and cultural nurture." If you have made the appropriate provisions in your will, your Literary Executor will distribute all of the literary property that you owned at the time of your death.

The Literary Executor, acting on behalf of the beneficiaries under your will (e.g. family members, a designated charity, a research library or archive), will be responsible for entering into contracts with publishers, collecting royalties, maintaining your copyrights, and (where appropriate) arranging for the deposit of your letters, unpublished manuscripts, and other literary materials with a suitable university library or historical society. It bears emphasizing that your Literary Executor may also have the right -- under the Copyright Act -- to terminate certain transfers and licenses granted during the copyright owner during their lifetime, including book publishing contracts, music publishing contracts, motion picture options, and other contracts or licenses relating to copyright. Beware! The process of getting back copyrights is complex and contains many traps for the unwary.  As stated by Justice Geoff Lindsay, "death has become, in law, a process rather than an event."  Because of the changeable nature of copyrights (e.g. the renewal and reversion of rights, revised editions, film adaptations) the duties of a literary executor, or trustee, project decades into the future and are ongoing.

Selecting a Literary Executor

A General Executor will often be a spouse or other family member that does not have experience with literary matters. Therefore, you should consider entrusting the care of your papers, existing contracts and unpublished manuscripts to a Literary Executor. Keep in mind that being a Literary Executor can be a lot of work. By taking the time to carefully select a Literary Executor, you lessen the likelihood of intra-family disputes that could result in family members refusing to negotiate for the further exploitation of your works -- preferring instead to retire your copyrighted works from publication. And, if your final wish is that your unfinished play based on your aunt Hilda's lesbian affair go unpublished or unproduced, you can provide in your will that your Literary Executor destroy your manuscript after your death. By way of example, Ernest Hemingway (1898 - 1961) made it clear during his lifetime that he did not want his unfinished and unpublished story fragments and manuscripts published after his death. However, since his will was silent on the subject, his estate edited and released not just his early stories, but  three unfinished novels (one of which was a posthumous collaboration with his son, Patrick). Of course, all three of the novels received poor reviews.

Ideally, your Literary Executor should be someone who understands how the copyright industries operate. That person should also be comfortable with negotiating contracts, or savvy enough to hire an attorney or literary agent to help exploit unpublished works, or exploit rights that were retained by your estate. As mentioned previously, your Literary Executor should also be someone who will carry out your intentions. And, since all things come to an end -- including Literary Executors -- you should provide in your will for a replacement when the estate's Literary Executor dies or becomes incapacitated.

Defining the Literary Executor's Duties


Because the duties and powers of a Literary Executor are not defined by statute, it is imperative that the person drafting your will take great care in describing the scope of your Literary Executor's duties. The powers of a Literary Executor should be as broad and comprehensive as possible, unless, of course, you believe there should be limitations, qualifications or conditions imposed upon your Literary Executor (e.g., different executors appointed for book publishing and theater-related matters).

In preparing the powers of a Literary Executor, you must consider the following questions: 



  • Will the Literary Executor have the sole and exclusive right to make all decisions regarding appropriate publication, republication, sale, license or other exploitation of your work? Or, should she merely be appointed as an advisor to the General Executor?
  • Will the Literary Executor be responsible for preparing unfinished or unpublished manuscripts for publication and seeing those works through publication? 
  • Will the Literary Executor have the right to terminate copyright licenses? Will they have the power to destroy any letters or papers they believe should be destroyed? 
  • In return for their services, will the Literary Executor receive a fee or commission for their services? What is fair compensation? What about reimbursement for expenses? 
  • Will the Literary Executor be required to maintain a separate bank account for such monies? 
  • Will the Literary Executor have the sole right to sue for infringement of copyights? 
  • Will the Literary Executor have the authority to pay accountants attorneys, agents, subagents and others? 
  • In the event the Literary Executor is unwilling or unable to perform her duties, what are the provisions for appointing her successor? Or, will the General Executor assume those duties?
While a family member may agree to work for free, attorneys and literary agents will most likely seek a fee of between 10% and 15% for new contracts they negotiate on behalf of the estate. With regard to administering existing contracts, fee arrangements can vary greatly depending upon the size of the literary estate and the responsibilities of the Literary Executor.

The Literary Trustee

In some instances, an author may create a lifetime (“inter-vivos”) trust and transfer literary assets to the trust. In this case, a trustee will be appointed to carry out responsibilities similar to an Executor. In such instances, the author appoints a "Literary Trustee" who acts in much the same manner as a "Literary Executor" would under a decedent's will. Furthermore, if an author names trusts as beneficiaries under his will and literary assets will be transferred to such trusts, then the author must also name, in addition to a Literary Executor, a Literary Trustee (who would be the same person) in order to continue acting in such a capacity after the literary assets have been transferred to the trusts.

Valuation


If you have accumulated enough wealth so that your assets will be subject to an estate tax upon your death, then the Executor will be responsible for valuing all of your assets at that time, including manuscripts, copyrights and contractual rights derived from the publication and reproduction of your works. The Executor (or Literary Executor, as the case may be) should hire an appraiser with significant experience in appraising -- or valuing -- these interests. Authors with significant estates should meet with their attorney or accountant now to determine whether any lifetime planning can be employed to reduce the value of their estates at their death so that more assets can pass to their heirs.

 
(c) 2002 -2017 Lloyd J. Jassin and Ronald M. Finkelstein


(Lloyd J. Jassin, JD, is a publishing and entertainment attorney and coauthor of The Copyright Permission and Libel Handbook (John Wiley & Sons). He has offices in The Paramount Bldg, 1501 Broadway, FL 12, NY, NY 10036. He can be reached at 212-354-4442 or by e-mail at Jassin@copylaw.com, or you can visit his firm’s website at www.copylaw.org)

(Ronald M. Finkelstein, JD, CPA, is a Tax Partner at Marcum, a nationally recognized accounting firm, and national Co-Partner-in-Charge of their Trusts and Estates Practice group. He can be reached at 631-414-4370 or by e-mail at ronald.finkelstein@marcumllp.com, or you can visit his firm's website at www.marcumllp.com)


NOTICE: This article discusses general legal issues of interest and is not designed to give any specific legal advice pertaining to any specific circumstances. It is important that professional legal advice be obtained before acting upon any of the information contained in this article.



Resources
Writers Wills: A Rich Legacy (article / The Guardian)
William Shakespeare's Will (PDF)
Jane Austen's Will (PDF)