The articles from The Law Office of Patricia E. Tichenor, P.L.L.C. are focusing on
the areas of Family Law and Estate Law, and range of other legal areas.
Should someone be able to profit from using your name and likeness after you die? And if so, who exactly should be able to benefit from it?
This was the question at the center of the 2021 Tax Court decision regarding the usage and monetary value of Michael Jackson’s name and image after his death. This highly anticipated case shined a light on the complexities and ethics of the posthumous use of an individual’s “persona.”
While postmortem right of publicity is commonly associated with celebrities, it does impact people outside of that sphere in states like Virginia, where any individual can qualify for this right for a certain period of time after they die. Here’s what post-mortem right of publicity entails and how it impacts estate planning.
What is post-mortem right of publicity?
Having the right of publicity means you have the right to control and profit from the commercial use of your name, image, or likeness. The postmortem right of publicity, as the name implies, passes this right to an executor, trustee, or named beneficiary through a Will, a trust, or another estate planning instrument.
This postmortem right of publicity allows a person’s heirs or named beneficiaries to profit from their persona and crack down on unauthorized commercial exploitation of the decedent. It does, however, have estate tax consequences, as the gross value of the estate is included this right.
Who qualifies for post-mortem right of publicity, and what rights do they get?
Some states dictate that only celebrities qualify for post-mortem rights of publicity, while others protect all individuals. For instance, in New York, only “deceased performers” or “deceased personalities” qualify for postmortem right of publicity. In Virginia, however, any person, regardless of their status, can qualify for this right.
Under the postmortem right of publicity, a deceased individual can protect their name, voice, signature, photograph, or likeness against unauthorized commercial use without prior consent. How long the postmortem right of publicity lasts also depends on the state; Virginia has it set for 20 years after death.
How post-mortem right of publicity impacts estate planning
The post-mortem right of publicity is a relatively new part of estate planning. The laws surrounding this right of publicity have gained more attention because of the case of the Estate of Michael J. Jackson. In his case, the Tax Court directly addressed the taxability of image and likeness and valued his likeness at $4 million, which illustrates the large amount of money that can be at stake in these types of cases.
Considering the post-mortem right of publicity in estate planning is crucial if an heir or named beneficiary could potentially profit from the deceased person’s persona, likeness, etc. Restricting this right of publicity after death could reduce the estate tax value, as well as the value to the heirs or beneficiaries. However, any restrictions would not necessarily factor into the gross value of the estate, as the Tax Court does not include restrictions in their calculations.
One of the most common practices in the case of postmortem right to publicity is to treat it as if it were business planning. When dividing up business interests, it is best to sell or gift them to multiple grantor trusts, so they too can shoulder the potential tax liability. The same is true for post-mortem right of publicity. However, it may be advisable to sell your rights of publicity rather than to gift them to a grantor trust and to appoint an independent trustee, as sales won’t be subject to the Internal Revenue Code Section 2036 regarding the right to enjoy the property of a person’s transferred estate or the income thereof.
Get help with your estate plans
Estate planning can be a complicated process, especially when it comes to more recent rights like the post-mortem right of publicity.
Rather than struggle through this process alone, contact the Law Office of Patricia E. Tichenor for help. We have over 20 years of experience handling estate planning for Virginia residents and can guide you and your family toward the best solutions.
Contact us today to schedule a free 30-minute consultation about your estate planning needs.
The COVID-19 pandemic has affected nearly every facet of daily life over the last two years, including the way many individuals approach estate planning. From the rise of electronic Wills to earlier planning, here are some estate planning changes that have been influenced by the pandemic and its consequences.
Rise of electronic Wills and virtual Will signing
An electronic Will (or e-Will) is a will created, signed, and stored electronically in a digital format. An electronic Will covers everything a traditional Will does.
Every state has different laws when it comes to electronic Wills. In 2021, Virginia introduced and passed legislation that allowed a testator to execute a Will by electronic means, including video conferencing. They have increasingly been used to accommodate society’s rising digital sensibilities, even before the pandemic.
The urgency for virtual Will execution increased in 2020 as people began to worry about potential health consequences if they contracted COVID-19. Individuals wanted to make sure their estate was in order should something happen to them but may not have felt they could safely prepare a Will in-person with an attorney.
Even as pandemic restrictions have eased, virtual Will execution remains a popular and convenient option for individuals working on their estate plans.
An increase in Millennial Will-writing
The volatility of the pandemic caused millennials to be more introspective and embrace estate planning. The percentage of 18- to 34-year-olds with Wills jumped from 16.4% in 2020 to 27% in 2021, with the percentage expected to grow in 2022.
Millennials cited the COVID-19 pandemic as their reason for wanting to get their affairs in order. In addition to being more aware of their own physical well-being, they were also starting to plan for the future as well. Many seriously considered buying real estate and having children with their partners.
Writing a Will allows millennials to distribute their assets and specify any final arrangements they want carried out. Not only were millennials prioritizing their estate planning, within those plans they also tended to give back. According to a Trust & Will survey, 7% of millennials surveyed intend to give some assets to a charity and 26% opted to have their organs donated. These forward-thinking final requests were inspired by the anxiety brought on by COVID-19 and the subsequent summer of civil unrest.
Probate court operational changes
Probate courts, which handle the property and debts of the deceased, also saw operational changes brought on by the pandemic. At the beginning of the pandemic, strict lockdown orders delayed hearings for the general safety of the public. Courts then began scheduling hearings online via remote services, and some courts set up separate remote stations to safely cover the technological aspects of the hearings. As the state of the pandemic continues to fluctuate, probate courts are embracing a hybrid system provide accessibility to all patrons.
Probate courts also saw an unprecedented uptick in cases as many people who died from COVID-19 did not have a Will. The courts became overwhelmed as people attended hearings to settle their family’s estates. The importance of estate planning became clear as families were burdened with legal fees to untangle their loved one’s assets in an already stressed system.
The coronavirus pandemic caused what some referred to as a “she-cession,” as COVID-19 has disproportionately affected women. During the pandemic, women were more likely to lose their jobs and struggle to find work than men. Additionally, with entire families staying at home, more women assumed the responsibility of caring for their children and helping with their education than their male counterparts.
Women who were negatively impacted by job losses, decreased salary, and prioritized education made changes to their estate plan to reflect their new financial situation. According to a TD Wealth survey, 89% of estate planners said they made changes to their female clients’ estate plans because of the pandemic. These changes included updating guardianship and benefactor designations and powers of attorney, redrafting their current Will, and writing post-mortem letters.
These new changes can make navigating estate planning difficult. If you’re in the Commonwealth of Virginia and looking to write your first Will or make changes to your current Will, contact The Law Office of Patricia E. Tichenor today.
The rise in cryptocurrency has signaled a rise in non-fungible token (NFT) prominence as well. As NFTs gain traction, many who have purchased them wonder whether they can pass them on to their heirs.
Cryptoassets are unique assets that can be complicated to account for when it comes to estate planning. If you’re wondering how to leave these assets to beneficiaries, here’s a brief overview of what you need to know about including NFTs in your Will.
What is an NFT?
Non-fungible tokens are units of data stored on the Ethereum blockchain. They are not the same as blockchain cryptocurrencies, such as Bitcoin. NFTs represents ownership of a unique item. Such items include assets like art, collectibles, a song file, and even real estate. For instance, an NFT can tokenize assets that range from a GIF to a deed to a car.
An NFT can only have one owner at a time, and this ownership is managed through the unique ID and metadata that no other token can replicate. When you buy an NFT, you’re purchasing the code that represents an image. In other words, you’re buying the property rights to the asset, not the asset itself.
Can I include NFTs in my Will?
NFTs are valuable and unique assets, so if you own one, you’ll want to include it in your Will to ensure your heirs gain ownership of them. If you don’t specify how you want to distribute your NFTs, as with other cryptoassets, the probate court or IRS will decide whether it will be liquidated or sold off.
How to include NFTs in your Will or Trust
While you can include NFTs in your Will or Trust plan, it’s not as simple as “handing over” a physical asset. Like all digital assets, it’s important to develop and include a specific plan for leaving your NFTs to a beneficiary.
Since NFTs can only be accessed by a password or personal key, you need to make sure your executor can deliver this information to your beneficiary and specify in your Will or Trust how they can access it. Additionally, in your Will or Trust, explicitly state the plan for exactly how and when your beneficiaries should receive this password after you’ve passed, or have a Will or Trust indicate your intention to provide a separate, private document that can be found with your Will or Trust which lays out the specifics.
Talking to your estate planning attorney about digital assets like NFTs
Many laws surrounding NFTs and cryptoassets are still in the works, so it’s important to retain the services of an attorney who stays up to date with the latest estate planning laws and their tax implications.
To help your lawyer calculate your NFTs values, document the purchase price of each NFT in cryptocurrency and their fair market values when you purchased each of them. Transferring this password can be a complicated process and could potentially violate federal cybersecurity laws if it is not clear that your appointed representative has the authority to use your NFTs password on your estate’s behalf.
When planning an estate with NFTs, legal representatives should create a memo or letter that specifically details the type, location, and means of access to your digital NFTs. Password and PINs should be stored separately, though the memo/letter should indicate where they can be found.
To make sure your executor has the authority they need, include an express grant of permission in your Will so they can access your crypto exchange accounts. Many states, including Virginia, have adopted digital assets acts, and a properly drafted estate plan should include provisions related to those laws. Additionally, be sure to research and select the right cryptoasset exchange platform to store your NFTs, as this can further complicate the inheritance process for your beneficiaries.
Including digital assets in your Will can be complex. Luckily for Virginians, The Law Office of Patricia E. Tichenor, P.L.L.C., can help guide you. Contact us today for a free consultation about your estate planning needs.