©2016. Published in Landslide, Vol. 8, No. 3, January/February 2016, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.
When doctors die, they do not continue treating patients. When plumbers die, they no longer fix leaky toilets. Your creative clients, however, may go on to have active and lucrative careers long after their deaths. Deceased inventors, software programmers, and video game designers may continue to bring in fees from licensing agreements for years to come. Musicians and writers may have royalty-earning works that will retain value for decades after their deaths. Estates of visual artists often contain unsold inventory. Trademarks survive death and can be renewed indefinitely so long as the mark remains in use.
A client’s posthumous income may even be greater than what the client earned while alive. It is not uncommon for an artist’s work to rise in esteem and value after death. The cartoonist Arthur Pinajian created an extensive body of abstract paintings that never found an audience during his lifetime but which now, over a decade after his death, are considered masters of the form. Likewise, Emily Dickinson published only a handful of poems during her lifetime but is now considered one of America’s greatest literary talents. In both cases, family members discovered treasure troves of work after the creator died—Pinajian left behind a garage full of paintings and Dickinson a lock-box full of poems—and took it upon themselves to market the work and build a posthumous career for their deceased relative.
Indeed, successful posthumous careers do not happen on their own. When a creative person dies, if the work is to remain (or become) profitable, someone must step in and actively oversee the intellectual property (IP) in the creator’s stead. Patents, licensing agreements, and copyrights require tending. Sales of literary rights and visual art have to be carefully planned: When to sell, what to sell, and how to structure the transactions require thoughtful decision making. There are also noncommercial issues to address, including how best to nurture the decedent’s legacy. If the creator’s work is to endure, somebody needs to be shaping perceptions of the work and what it stands for. As one court noted in the context of literary rights, posthumous oversight “requires a delicate balance between economic enhancement and cultural nurture.”1
So whose job is it to handle this important balancing act?
If the decedent left a will, there likely will be a family member, friend, or associate designated in that document to carry out the terms of the will and to oversee transfer of the decedent’s property to the beneficiaries. If no estate planning has been done, the rules of intestate succession will come into play and a third party, typically one of the decedent’s heirs, will be appointed by the local court to represent the estate. Terminology varies from state to state as to what these designees are called, but for ease of reference the term “personal representative” will be used to refer to the point person who is responsible for gathering all of the decedent’s assets, collecting debts due to the decedent, resolving the decedent’s liabilities, and then distributing the remaining assets. While the estate is pending, this person owes a fiduciary duty to the beneficiaries and is obligated to prudently manage all of the property, including the intellectual property, for the benefit of the beneficiaries who will ultimately come into possession of those assets.
Once the estate closes, responsibility for the intellectual property typically transfers to the beneficiaries. It is they who, in the long run, will be responsible for overseeing the creator’s posthumous career. Beneficiaries are not fiduciaries and thus are not held to any specific standard of duty toward their benefactor’s assets. But because they have the potential to earn income from the property, they have an incentive to manage the property efficiently.
In estates with a more sophisticated level of estate planning, the decedent’s assets, or some portion thereof, may be held by a trust that was created to manage the assets for the benefit of the beneficiaries. Where a trust is in place, a trustee will be in charge of overseeing any property held by the trust, including the intellectual property. A key feature of trusts, as will be discussed in more detail later, is that they can last indefinitely, meaning that trustees are likely to be involved with the decedent’s property on a more long-term basis than the typical personal representative. But, like a personal representative, the trustee will oversee the decedent’s assets and owe a fiduciary duty to manage them responsibly.
Thus, after a creative person dies there is generally going to be somebody responsible for managing that decedent’s posthumous affairs. A recurrent problem, however, is that personal representatives, trustees, and beneficiaries are not always well qualified to oversee intellectual property or may lack the time and resources to do so effectively. Difficulties can also arise where there are conflicts of opinion among interested parties over how the creative assets should be handled. Because IP rights are so highly divisible, there be many people’s opinions to take into account, such as where a group of beneficiaries co-own a piece of intellectual property or individual beneficiaries inherit related properties. And then there are the potential conflicts of interest between the economic interests of the beneficiaries and the creator’s legacy. For instance, if an artist’s estate receives an attractive offer to license the decedent’s work for a series of commemorative tchotchkes, cash-hungry beneficiaries may be inclined to accept even though doing so might negatively affect perception of the work.
When faced with these complex issues, estates, trusts, and beneficiaries often turn to third-party consultants to offer advice and oversight. As IP lawyer Joan Bellefield Davis describes it, some IP estates have “an arsenal of experts” on hand, including lawyers, agents, appraisers, tax advisers, accountants, investigators, and even branding experts.2 But bringing in a crew of outsiders can create its own set of complications. What if the involved parties do not agree on who should be hired? What if the beneficiaries disagree on whether to accept the expert advice?
For many creative estates, these sorts of issues can be dealt with proactively by having the creative client appoint a “creative executor,” a person whose specific task it is to manage the IP rights and to bring in and oversee outside assistance as needed. The position can take a wide variety of forms, but in general the goal is for the designee to step into the decedent’s shoes for purposes of overseeing the posthumous career. Ideally, the creative executor will be handpicked by the decedent and identified in the estate plan. As Davis notes, “if the idea is to make sure the artist’s career is managed consistently with his wishes, it makes sense to have the artist personally select the creative executor and have the person ready to step into action immediately upon the death.” If a decedent did not make such an election, however, the estate and beneficiaries may be able to agree on a designee to advise them.
In the literary context, there is a centuries-old tradition of authors appointing literary executors to advise their estates and beneficiaries. More recently, some visual artists and musicians have followed that lead by designating artistic or musical executors to oversee their posthumous creative affairs. The concept would work equally well for clients whose estates hold patents. And yet, there is scant legal authority on the subject of creative executorship. The concept of creative executorship is not included in any estate administration statutes and is mentioned in only a handful of published judicial decisions. Nor is there much published guidance on the subject. As a result, many lawyers and creative professionals are not as familiar with the concept as they should be and may be missing out on an important aspect of estate planning for their IP clients. To fill that gap, the following discussion offers an overview of how creative executorship works and presents an array of options for how your clients can incorporate such an advisor into their estate plans.
The Scope of the Creative Executor’s Responsibilities
Because the position of creative executor is not established or defined by statute, there is no specific list of responsibilities that go along with the job. The role will vary from situation to situation depending upon the decedent’s intent, the size and nature of the estate’s portfolio of intellectual property, the skillsets of the other people involved in the estate, and the skillset of the designee. At a minimum, the creative executor’s role will be to assist in decision making and to facilitate communication among the involved parties. For small estates, the job may be hands-on, with the designee handling issues directly. In more complex cases, the position may require the hiring and management of outside experts.
Depending on the type of estate involved, it may be important for the creative executor to be ready to step into action immediately upon the death so as to maintain continuity for pending business transactions or to protect assets. In the case of high-profile estates, creative executors may also be of value in planning the decedent’s funeral. They can be useful in resolving such questions as whether the service should be a family event or open to the public, where the decedent should be buried, and who should give the eulogy. While some estates may prefer to keep the grieving process private, others will want to take advantage of the opportunity these types of gatherings present for promoting a positive view of the decedent’s life and work through favorable speeches and remembrances.3
As the estate moves into the administration phase, creative executors can be of service in valuing the intellectual property for purposes of probate and calculating estate taxes or overseeing others who perform such services. Depending on the size of the estate, the “to do” list here may be extensive and complex. Because IP assets are divisible, the rights may be spread out among multiple licensees and subject to a wide variety of terms. Were there deals in progress at the time of death?4 With a famous decedent, how much is the person’s name worth posthumously?5 Are there any unpublished or unsold works that are marketable? Is there any work out on loan that needs to be accounted for or reclaimed? If an estate holds a large inventory of visual art, what is the appropriate blockage discount for purposes of determining the tax liability?6 If assets will have to be liquidated to pay the estate taxes, which assets should be sold and how should the transactions be structured?7
Relatedly, creative executors often play an integral role in handling the decedent’s “papers”—a term that traditionally referred to the letters, manuscripts, drafts, research files, notebooks, diaries, sketches, and books that accrue over the course of a creative career. In recent years, the scope of the term has been expanded to include digital assets such as e-mail, social media, cloud storage, and domain names. For all of these types of materials, decisions will have to be made about what should be retained, sold, donated, or destroyed. This process can be complex and time-consuming, especially when dealing with the digital assets for which there are not yet standardized rules regarding postmortem disposition.8
Creative executors also may assume an active role in the day-to-day handling of the intellectual property and extracting value from that property for the benefit of the heirs. For patents and copyrights, registrations have to be transferred, licensing agreements monitored, royalties and licensing fees received and accounted for, and infringements policed. There may be incomplete or pending applications that require tending. For copyrights, there may be issues relating to renewals and recaptures, as well as requests for permissions to quote from or reprint the decedent’s work. If there are any unpublished or unfinished manuscripts or artwork, the creative executor may be called upon to evaluate which ones should be finished posthumously and perhaps even take the lead in editing or finishing them. For the estate of a visual artist, the creative executor may be of assistance in preparing the artist’s catalogue raisonné, arranging exhibits, and responding to requests for authentication. Estates holding trademarks must be sure to keep the mark in continual use, file maintenance documents, and monitor potential violations.
Many creative clients will want their creative executors to take an active role in shaping how the estate nurtures their posthumous legacies. Indeed, to some artists, financial success is secondary to the creative vision. To that end, what should be done to keep the creator’s name in the public eye? How does the estate foster continuing demand for the work? Should a biography be authorized? In jurisdictions where the decedent’s right of publicity survives death and is descendible, consideration should also be given to opportunities for licensing the decedent’s name, image, or likeness.9
For each of these issues, the creative executor will have to weigh the competing interests inherent in creative endeavors. Just as living artists struggle with where to draw the line between earning a living and being true to the art, the creative executor will have to balance economic considerations of maximizing value from the portfolio against protecting the artist’s long-term reputation and the public perception of the work. As the court handling author Lillian Hellman’s estate described the process, creative executors have to navigate between “keeping the books” and “keeping the flame.”10
The Authority and Duration of Executorship
As of this publication, no state in America has a statute recognizing creative executors as having the power to make decisions on behalf of the estates they represent. As a general matter, only personal representatives, trustees, and, ultimately after an estate closes, beneficiaries have that authority. Thus, creative executors technically serve solely in an advisory role.11 For many estates, this is perfectly appropriate and in line with the decedent’s intent.
There may be situations, however, where your client will want the creative executor or trustee to have decision-making authority and the power to act on behalf of the estate. This may be necessary where the personal representative is entirely unskilled in handling creative assets or where the portfolio of intellectual property is large or complex. Or it may be a simple matter of efficiency: A creative executor who is monitoring patent infringements may be more effective in that role if he or she does not have to obtain the personal representative’s signature on correspondence or pleadings. Where these types of considerations are involved, it may be appropriate for your client to appoint the creative executor as a general corepresentative or cotrustee of the estate. Before taking that step though, keep in mind that personal representatives and trustees have broad power over all of a decedent’s assets, including houses, cars, and personal property. Your clients may not want the creative executor to have such expansive authority, and thus the language appointing the person as corepresentative or cotrustee should be carefully crafted to grant the designee power over only the creative assets.12
Your clients should consider how long they want the creative executor to be involved in managing the intellectual property. In the case of property passing by will, once the estate closes and the intellectual property transfers to the heirs, the heirs are free to do as they like with the intellectual property. If the beneficiaries do not want the creative executor involved in overseeing the creative assets going forward, there is not much the designee can do to insert himself or herself into the situation other than perhaps serving from the sidelines as an unofficial watchdog. If your client wants the creative executor to have a long-term role after the estate closes, it may be advisable to put the intellectual property into a trust or other legal entity and have the creative executor serve as trustee or manager with the income going to the beneficiaries.13
No matter how the relationship is structured, care must be taken when drafting the documents appointing a creative executor, whether it be a will, trust document, or employment contract. The term “intellectual property” is not statutorily defined and can theoretically incorporate a broad array of assets.14 Thus, to avoid complications later, it is advisable for your client to specifically identify which property interests will fall within the creative executor’s domain. It is also important to specify in the documents what standard of care the creative executor should follow. If your client intends for the creative executor to factor legacy planning and other nonmonetary considerations into the day-to-day decision making, the documents should say so. This is crucial if the designee is appointed a personal representative or trustee. In either of those cases, the designee will be operating under a statutorily imposed fiduciary duty to handle the assets in a manner that is beneficial to the heirs.15 The testator can waive that standard, but care should be taken to do so narrowly and with specificity.16
The Selection Process
Choosing a creative executor is akin to finding a mate. Your client will have to identify a person who can be trusted, who is familiar with the body of work, and who “gets” what the client wants to accomplish with the work. There is also the matter of affinity for the task. The ideal candidate will be organized, meticulous, familiar with the type of creative rights involved, capable of weighing in on a wide variety of legal and financial issues, and savvy enough to know when to seek advice from others. While the person does not need to be a lawyer, accountant, or branding expert, a creative executor should be comfortable working in and dealing with people in those fields. But more than a nose for business is required: Protecting an artist’s creative legacy requires vision, sensitivity, and nuance.
Your client must also take into account who is able and willing to take on the task. Even though creative executors are typically compensated for their work, it is no small request to ask someone to devote time and energy to managing another person’s affairs. Gone with the Wind author Margaret Mitchell’s brother frequently expressed frustration at the sacrifices entailed in representing his sister’s posthumous career. Despite his being a skilled estate and trust lawyer who had a stable of experts at his disposal, he found the work daunting and the glare of public scrutiny frustrating. In his case, the sting of resentment was ameliorated by the millions of dollars his family made on lucrative licensing and publishing deals, but not all creative executors will be so lucky.17
Advise your client to consider the full scope of each candidate’s suitability for the role. Perhaps a scholar or a devoted fan is familiar with the decedent’s body of work but is elderly or lives on a remote mountaintop. Maybe the surviving spouse is a whiz with accounting but is a beneficiary of the estate and thus has a financial interest in the choices that will have to be made. Insiders such as fellow creatives, agents, editors, publishers, studio assistants, and gallery owners are often viable candidates, but careful consideration must be given to whether their interests might conflict with those of the beneficiaries or the decedent’s legacy planning. Clients may be loath to question the integrity of their inner circle but should not ignore the risk of self-dealing. As was demonstrated in the litigation surrounding the estate of artist Mark Rothko, money can prove a powerful temptation even to trusted insiders.18
Where conflicts of interest are a potential problem, your client may want to consider hiring an independent professional representative through a bank, trust company, or consulting firm to serve as creative executor. Because they do not have a vested interest in your client’s estate, such firms presumably can be trusted to give objective advice. They may also prove valuable where the beneficiaries do not get along on a personal level or disagree about how the legacy should be managed. In these types of cases, having an independent third party involved may be necessary to allow the estate to function efficiently. But professional executors will not be ideal in every case. Such services can be expensive, and care will have to be taken to find a firm that is well attuned to the particular needs of estates of creators.
There rarely will be a single person perfectly suited to the task in every respect, which may lead your client to consider appointing multiple creative executors. Playwright Tennessee Williams, for example, appointed both his lawyer and an actress friend to serve as co-literary executors, with the idea in mind that each had a unique skillset to offer. Whether such a system is advisable will depend on the parties involved and the complexity of the IP portfolio. A key issue in many cases will be whether the assets have enough value to justify the expense of multiple people being involved. If a client does decide to go that route, careful planning will be necessary to delineate responsibilities and to establish a mechanism for dealing with conflicts that may arise between the designees.
If your client is fortunate to have multiple qualified candidates from whom to choose, it may be advisable to appoint a successor designee to assume the role of creative executor if the primary designee is unable to serve. Literary history is rife with examples of creative executors who died or who resigned without there being a suitable replacement in line. Most notoriously, when one of Welsh poet Dylan Thomas’s literary trustees resigned, the remaining trustees appointed novelist Kingsley Amis in his place. Amis certainly had the literary credentials to justify the appointment: He is widely considered to be one of the greatest British writers of the twentieth century and had many connections in the publishing industry that could have been beneficial to the Thomas estate. Yet, Thomas surely would have been appalled by the appointment given that Amis openly despised both Thomas and his work. In Amis’s memoirs, published a few years after the appointment, he described Thomas as either a very bad poet or, alternatively, a good one “in a mode that is anathema to me.” Amis did not think much of Thomas on a personal level either. “Thomas was an outstandingly unpleasant man,” wrote Amis, “one who created and stole from his friends and peed on their carpets.” If you are not familiar with the work of Dylan Thomas, it may well be because of Amis’s lack of interest in Thomas and his legacy.19
Ensuring the Creative Executor’s Success
An important first step in ensuring that a creative executor succeeds in the role is making sure that the person is willing and eager to take on the job. To that end, encourage your client to inform the designee of the selection while the client is still living rather than having the person notified after the death. The designee should be told what the expectations and priorities are and be given the opportunity to ask questions. Preferences about business and legacy issues (e.g., that a biography not be written or that unfinished work be destroyed) should be communicated and discussed openly to make sure the designee is in accord with the creator’s wishes. Also discussed should be whether compensation will be provided, and if so, on what basis (e.g., an hourly rate, a fee schedule, or a share of royalties).
Your client also must leave matters in good order. Estates holding intellectual properties face unique challenges that are best dealt with proactively.20 Thus, it is essential for your creative clients to have sound estate plans in place. The better the plan, the better the chances the creative executor will be effective in managing the creator’s posthumous career. Likewise, the more organized the decedent’s work product and papers are, the easier it will be for the creative executor to be effective. For complicated estates, your client may even want to hire the designee or another third party to help put things in order while the client is still living.
Finally, your client will want to prepare the creative executor for the work ahead. The designee should be provided with a detailed overview of the client’s body of work along with contact information for interested third parties. It may even be advisable to make personal introductions to agents, publishers, dealers, and licensees while the creator is still living. If your client prefers to keep his or her business matters private while his or she is alive, all of the necessary information should be readied ahead of time for presentation to the creative executor immediately upon the client’s death. Consideration should also be given to whether the designee might benefit from training, such as a primer on the type of intellectual property included in the estate’s portfolio.
As with careers of the living, posthumous success cannot be engineered with certainty. Even with meticulous planning and careful administration, things can go awry. Tastes change. Beneficiaries feud. IP rights are violated. Markets crash. And yet, appointing a qualified person to assume posthumous responsibility for the creative assets is often a worthwhile proposition. With a qualified and dedicated person overseeing the IP assets, there is much that can be done to nurture both the income stream for the beneficiaries and the long-term legacy of the creator’s work.
According to estate and trust attorney Matthew Farley, there is no “one size fits all” approach to creative executorship that will work in every case.21 Thus, for lawyers advising clients on issues relating to creative executorship, meticulous attention must be paid to the unique details of each client’s portfolio of intellectual property. Ask detailed questions, gather a wide array of information, and help your clients think through precisely what their specific intentions are. No two clients will set the same standard of posthumous success, and thus your own creative talents will be required in establishing a creative executorship that works for each particular client.
1. In re Estate of Hellman, 511 N.Y.S.2d 485, 488 (Surr. Ct. 1987).
2. Interview with Joan Bellefield Davis, Partner, Schroder Davis, PLC (June 8, 2015).
3. Lawrence Lipking, The Life of the Poet: Beginning and Ending Poetic Careers 138 (1981) (noting that “elegies are the heart of literary history, at once a memorial of the past and an attempt to improve upon it or put it to use”).
4. Estate of Franz Kline, (N.Y. Surr. Ct. 1964), N.Y. L.J., Mar. 31, 1964, at 14.
5. See Estate of Andrews v. United States, 850 F. Supp. 1279 (E.D. Va. 1994) (discussing valuation of a famous author’s name on manuscripts to be written by a ghostwriter).
6. See Estate of O’Keefe v. Comm’r, 63 T.C.M. (CCH) 2699 (1992).
7. See John Henry Merryman, Albert E. Elsen, & Stephen K. Urice, Law, Ethics and the Visual Arts 925 (5th ed. 2007).
8. See Jamie P. Hopkins, Afterlife in the Cloud: Managing a Digital Estate, 5 Hastings Sci. & Tech. L.J. 209 (2013).
9. See generally Weston Anson, Right of Publicity: Analysis, Valuation, and the Law (2015).
10. In re Estate of Hellman, 511 N.Y.S.2d 485, 488 (Surr. Ct. 1987).
11. See In re Bartlett’s Estate, 101 N.Y.S.2d 675, 676 (Sup. Ct. 1950) (stating that the position of literary executor is not an “entity in the law”).
12. See Unif. Probate Code § 3-715 (amended 2010) (providing that a will may place restrictions on the authority of personal representatives).
13. See generally Bridget J. Crawford & John Sare, Estate Planning for Authors and Artists, 815-2d Tax Mgmt. (BNA 2004).
14. See, e.g., In re Estate of Kerouac, 966 P.2d 191 (N.M. Ct. App. 1998) (holding that the right to sue over literary rights is a property right within the purview of a general executor rather than a literary right within the power of a literary executor), cert. granted, 972 P.2d 353 (N.M. 1998), cert. quashed, 990 P.2d 824 (N.M. 1999).
15. See Unif. Probate Code § 3-703(a) (“A personal representative is a fiduciary who shall observe the standards of care applicable to trustees.”); Unif. Trust Code § 105(b) (amended 2005) (establishing duty of a trustee to act in “the interests of the beneficiaries”).
16. See Unif. Trust Code § 1008 (limiting ability of trust to relieve trustee of liability for breach of fiduciary duty).
17. Ellen F. Brown & John Wiley Jr., Margaret Mitchell’s Gone with the Wind: A Bestseller’s Odyssey from Atlanta to Hollywood (2011).
18. See In re Estate of Rothko, 372 N.E.2d 291 (N.Y. 1977). See generally Lee Seldes, The Legacy of Mark Rothko (1996).
19. See Kingsley Amis, Memoirs (1991).
20. See W.E. Scott Hoot, Estate Planning for Artists: Will Your Art Survive?, 21 Colum.-VLA J.L. & Arts 15 (1996); Debra Perrotta, Estate Planning for Owners of Patents and Copyrights, 21 Est. Plan. 94 (1994); Kate Spelman & Susan von Herrmann, Estate Planning and Copyright, 5 Landslide, no. 3, Jan./Feb. 2013, at 35.
21. Interview with Matthew M. Farley, Partner, Armstrong Bristow Farley & Schwarzschild PLC (June 24, 2015).