What Happens When An Author Dies. Estate Planning With Kathryn Goldman

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Copyright in most countries is 50-70 years after the death of the author and your intellectual property assets can go on earning for your heirs and successors … but only if you make the right preparations in advance. In today's interview, I talk to attorney Kathryn Goldman about appropriate estate planning for indie authors.

In the intro I talk about my own personal writing updates plus Profanación is out in Spanish. Plus, if you're reading this before 7 Dec, 2015 and you like thrillers, then check out the Killer Christmas giveaway and click here to enter to win 21 print thriller novels in time for Christmas. I mention that Freebooksy now has a series promotional feature which is brilliant, and Amazon have announced StoryWriter, a free screenwriting tool.

The corporate sponsorship for this show pays for hosting and transcription. This podcast episode is sponsored by 99 Designs, where you can get all kinds of designs for your author business including book covers, merchandising, branding and business cards, illustrations and artwork and much more. You can get a Powerpack upgrade which gives your project more chance of getting noticed by going to: 99Designs.com/joanna

Kathryn Goldman is an intellectual property attorney who protects writers, artists, filmmakers and businesses from having their work and art ripped off.

You can listen above or on iTunes or Stitcher, watch the video here or read the notes and links below. Here are the highlights and full transcript below.

• Why Kathryn thinks artists have an aversion to legal matters.

• What estate planning is and why it matters.

• Why estate planning is so new for indie authors, and when authors should begin to think about it.

• The areas of an indie author's business that should be covered by a will and the things that are handled separately.

• What a literary trustee is, what they do, how to choose one and why they matter for indie authors.

• The additional issues when an author has a company that publishes her books.

• The industry standard earnings for a literary trustee.

• The differences between countries for copyright law, estates and trusts.

You can find Kathryn at Charm City Legal. You can get her Rip Off Protection Guide here.

Transcription of interview with Kathryn Goldman

Joanna Penn: Hi, everyone. I'm Joanna Penn from thecreativepenn.com and today I'm here with Kathryn Goldman. Hi, Kathryn.

Kathryn Goldman: Hi, Joanna. How are you?

Joanna Penn: I'm great, so good to have you on the show. Just a little introduction; Kathryn is an intellectual property attorney who protects writers, artists, filmmakers and businesses from having their work and art ripped off, which is brilliant. Today we're talking about estate planning, which I am super interested in.

Kathryn start by telling us a bit about your background and why you care particularly about authors and artists.

Kathryn Goldman: Let me start very quickly by saying first of all I'm not an estate and trust attorney. I'm a copyright attorney, but over the years I've represented a number of artists and writers who have had copyright issues, estate issues. Some of them are second generation artists and have inherited copyrights from their parents and so we had to deal with that. I've become sensitive to these issues over time and that's how I've learned about them. As we talk today really my goal is just to make everybody more thoughtful about how they handle their rights. I wanted to clarify that I'm a copyright attorney and not an estate and trust lawyer.

But aside from that, my interest in artists and writers, I grew up surrounded by artists and writers. My mum was a dean of the Mellon Institute College of Art and so she was always bringing home stray artists for dinner, and my dad was a newspaper editor. I was always surrounded by the writerly type and my undergraduate degree is in art history. So, it's an odd thing – art history and law. I have a fondness for writers and artists, and as a lawyer I have a skill set that I believe can really help artists and writers. My goal is to help them learn what their rights are, and enforce their rights so that they can protect their art and make a living from it.

Joanna Penn: Which looks fantastic and I wonder if you have any opinion on why do authors and artists in particular have such aversion to law and the legal stuff.

Kathryn Goldman: It's not just artists and writers who have an aversion to the law. Everybody considers talking to their lawyer like eating spinach. It's just not anybody's favorite thing, but once you get used to it and once you understand what your rights are, it's less daunting and you become more comfortable with dealing with law in your business and in your work. Maybe it's because people don't understand it so much. I really try to make it understandable and make the law accessible to creative types.

Joanna Penn: And at the end of the day it's mainly a language that we don't understand, isn't it? That's basically it.

Kathryn Goldman: I think lawyers write so that people don't understand, which is unfortunate, but you shouldn't have to have a translator to understand a law. So, I try to break it down and make it understandable for people.

Joanna Penn: And there are some really key things. Now, as I mentioned to you, we've had Helen Sedwick on the show before talking about copyright and some of these things, but today we wanted to talk about estate planning because I saw an article that you wrote and it's something I'm really into.

Start by explaining what is estate planning anyway and why is it important for authors to consider it.

Kathryn Goldman: Estate planning is basically succession planning for your worldly goods. It's making decisions about what happens to your stuff after you die and the fact is that copyright on your written work or your art work lasts a lot longer than you do.

You have this period that you get to control what happens to those copyrights from the grave, essentially, in your will or in a trust document. Estate planning with respect to intellectual property, which is all we're going to be talking about today, is how you want your works handled after you die. That's what we're talking about with respect to your creative portfolio under estate planning, which controls what you're going to put on the work after you die.

Copyright lasts in England and in the US and in many other countries for 70 years after your death. That's a pretty long time that you need to be thinking about where your portfolio could be generating income for your heirs or your charities of choice. That is what estate planning is all about, making those plans.

Joanna Penn: I personally find it really exciting because this is very new thing for indies as well. I think people in the old school had agents who dealt with this type of thing, but we're in this new world now where indies are dealing with their own stuff.

The fact that we might still be able to earn money for our heirs and successors after we die, I think is like a magic, exciting thing. But does everyone react like me?

Kathryn Goldman: Writers of a certain age react like you do. Younger writers that I work with do not … they're immortal. I work with poets and writers who are in their 20s and people in their 20s are still immortal. It just doesn't cross their mind, but I impress upon them that this is something that they need to think about.

To go to your point about this being new for indies, it is very new. When did self publishing really come on the scene. When did everybody start buying Kindles? 2007, 2008 is that when it really popped?

Joanna Penn: 2011 I think when it really popped.

Kathryn Goldman: Right. This whole notion of self published writers managing their rights after they die or in a will or a trust document, it's so new that the support systems haven't developed yet for it. And so, I think we're going to be seeing those support systems developing over time.

Joanna Penn: I totally agree and I think this is a big missing thing. I've known in the five years I've been doing this several writers who died early, obviously there's diseases and things happen and people have died and it's been like what do you do, because self publishing has got so many logons for a start. Logons are just a crazy thing. But before we get in to the details just back on the age thing.

When should authors be thinking about this? Is it more of a case how many books you have or how much money you're making rather than age, for example?

Kathryn Goldman: I think that it's probably a good idea to have some kind of will as early as possible. It doesn't need to be extraordinarily detailed at the beginning of your career, and as your career develops and as you have more books and you want to be thinking about maybe doing one thing with one set of books and one thing with another set of books.

You, for example, have two very different writing personalities. You have your fiction and your nonfiction and it may be that your fiction books lend themselves to a certain disposition and your nonfiction books lend themselves to a different disposition. And even within your fiction books you have a variety of series that you know you could do different things with.

I think you should think about it earlier and then as your body of work becomes more developed, you can change it. You can start, “Okay, I want to change this. I want to change that.” I think that is something that you should think about early because as you just mentioned people do die prematurely. They could be involved in a car accident or they could get sick or whatever and then all of a sudden here they have a dozen works and they have multiple logons and they have all of these different pieces of their business that they've been managing themselves and somebody has to sweep in and sort it all out. And that will be what you want to avoid as a writer.

You want to avoid that kind of chaos in the event of your early demise. If you live a nice long healthy life, then you really get to plan it out and be very pristine and very clear about what you're going to do and it's easier that way.

Joanna Penn: But so many people don't necessarily know when they're going to die obviously. I've been thinking a lot about it, because a friend of mine did die earlier this year, a young woman, and she was super organized. She knew she was dying and in the last nine months of her cancer she documented everything. She was brilliant about it and I'm sitting here thinking I still haven't done that. I promised I would do it earlier this year and I still haven't done that.

What are some of the things that should be covered? Normally when you go to a lawyer you wouldn't say, “Here are my logons,” and things like that.

What are the things that are covered by a will versus things that authors need to do separately?

Kathryn Goldman: Record keeping. Good bookkeeping. There should be an inventory of your creative portfolio. You should have that inventory and when you first go to a lawyer to have a will drafted, you should have that inventory in your possession.

You should be keeping a list of all of your accounts and all of their passwords, all of your licenses, if you license your work and all of the sources of your income streams. All of that should be nice and orderly and printed out. My recommendation, and this is actually a way to talk about this, is that you should update your list of accounts and passwords when you change clocks.

Joanna Penn: Good point.

Kathryn Goldman: We are falling back now this week, so let's go through… I have a list of my accounts and my logons and my passwords and I just crossed it out and maintain the list. I adjusted it this week to make sure that everything is current. You want to have that.

You want to have your inventory and then when you get your will created, you want to keep them all together in a place. And you want to let your executor know that they're your executor and give them a copy of everything. Now, updating that list of passwords every six weeks, every six months is good for you. I don't think you need to send this to you executor every six months. That will be a great habit to get into but as long as they know where to find it, I think that's what important.

Joanna Penn: What you do with the attorney or the lawyer would be to say, “This is the person or organization that now owns the copyright”, for example. But you would do a separate document that didn't go to the lawyer with all the logons and actual things that you need practically.

Kathryn Goldman: Right. The way it works is your copyrights become part of your estate. And then when you go to see an estate and trust lawyer to have your will drafted, you select a personal representative who will manage your estate. That personal representative is in charge of gathering up all the assets and reporting to the heirs based on the instructions in the will and based on the rules and laws of the local legislature. That's a standard operation.

For self publish authors, what we are talking about is also designating a literary trustee. Someone who is responsible for the management of your creative portfolio, not a personal representative who handles your estate. The literary trustee's focus is simply on managing revenue streams from your creative portfolio. Those revenue streams then would be passed up to the heirs as indicated in the will, so that person works with the personal representative.

There are a lot of questions in choosing that person: Who is the best person for that job? What are the qualities that you want to look for in a person to do that job?

First of all you want somebody who is willing to do the job. You want somebody who has some experience if not expertise in the self-publishing industry. Somebody who has good business judgment, good sense and knows how to negotiate a contract and a license. Given the nature of marketing of self-published books you need somebody who has expertise or experience in social media marketing and other types of marketing, and who knows where the marketing is going to go?

As we're sitting here today it's Twitter and Facebook and LinkedIn and your blog and YouTube and podcasts and those things but who knows where that's going to go. You have to consider what your business looks like now and who is going to be a match for continuing that business model and who is going to be innovative enough to go with whatever the flow is in the next 10 years, 20 years, 70 years out. That's a very complicated set of criteria and qualifications that you have to consider and it may not be your sister.

Joanna Penn: Probably won't be your sister.

Kathryn Goldman: That's exactly right, but it might be your sister who benefits from the income that's produced. We talked about what the qualifications work for choosing a literary executor. So, now let's talk a little bit about what their duties should be so we can be a little more specific about what it is they're going to be doing as an executor of your creative portfolio.

You have to decide how much power they have over your work. Whether they have absolute power and that they can make any decision that you could make with respect to your work. Can they issue new licenses? Can they terminate old licenses? Can they change license arrangement in terms of the fees, in terms of the cost of the license? Can they hire a lawyer? Can they redesign covers? Can they choose who is going to do an audio book? What are the duties that you're going to give them? What about, for instance, if you have unfinished manuscripts?

Joanna Penn: Oh yeah, do not publish them.

Kathryn Goldman: Do not publish them. All right. What about your emails? Do you want them all destroyed? Can they publish them? Can they do a biography of you? Think about that.

That's not what you're thinking about right now because that's not your creative undertaking at the moment, but if somebody becomes the literary trustee of your body of work, that's going to include your notes, that's going to include your emails, it's going to include your blog post, your podcast; it's going to include everything. Can they create a compendium? Can they put together a collection? Can they submit part of your work to a collection with other writers? The question gets pretty big.

Joanna Penn: And you don't have to be dead. We look at what's happened with Harper Lee and Go Set A Watchman and I don't think that she would have wanted that out there. I really just can't see that she would want a first draft of a book that became a classic and that basically what it was, right? We don't know what she is, but she's still alive. That was just crazy, and I would hate that to happen.

Kathryn Goldman: We suspect that she doesn't have the mental competence to make the decision to publish Go Set a Watchman. And somebody is definitely making those decisions or assisting strongly in making those decisions for her.

Let's put it this way; you put all your rules and all your wishes and desires about how your work is going to be handled in your will, and you have a group of heirs that are going to benefit from those rules being followed. Then in the event the literary trustee doesn't follow the rules, what if the heirs decide that you really didn't mean those rules that you put in there. Can the heirs remove the literary trustee? Do you want to have that as a provision in your will? You want to think about whether that literary trustee is going to get along with your heirs. Quite possibly there's going to be some head knocking involved.

Joanna Penn: I don't even get on with my heirs, my siblings. This is the reality, isn't it? In most people, heirs and successors are family, aren't they? And that's, as Shakespeare wrote, where the most of the problems are. So, that is really, really interesting. Is there anything else on that because I have another question.

Kathryn Goldman: No, I think that covers what the duties are of a literary executor.

Joanna Penn: Fantastic. My question is many indies of course will self-publish just under their personal names and they won't have set up an LLC, or in England, unlimited company or something like that. But I have unlimited company. The author retains the copyright, but I publish everything under my company. And a company can survive longer than a copyright, correct? As long as the company continues to run, me as an individual, I can be dead and the company can carry on.

How does having a publishing company and an LLC or unlimited company relate to this topic and how should the rights be done in that way?

Kathryn Goldman: It really depends upon what you intend and when you talk about having your own company, who is the owner of that company, is it you?

Joanna Penn: I'm the director. Me and my husband are both directors.

Kathryn Goldman: You own it 50/50 with him?

Joanna Penn: Yes, 50/50 shareholding.

Kathryn Goldman: Right. That 50% is going to be in your will because that becomes an asset of your estate and so you can then decide what happens to that 50%. But for some self publish writers who own the company in its entirety, that becomes an asset of the estate just like the copyrights become an asset of the estate.

The company can go on and on beyond your death without a limit; a copyright does have that 70 year limit in the US and UK. You can either transfer the copyrights into the company which would, in the United States, have to be a transfer in writing, or you can have the literary trustee work with the director of the company. Jointly, much like you're doing now, only you have to be one person. A director and the owner of the copyright but somewhere you're working together.

Joanna Penn: I think ahead to when I have this massive empire and I would employ a CEO who could run the company even if they weren't a shareholder.

The shareholding would get divested or whatever the word is so that my heirs get the money from that but the company could still be run by what would be the equivalent of literary estate manager or something.

Kathryn Goldman: If you had a CEO running your company and your company is predominantly earning its income based on your creative portfolio, then it's unlikely that you would need a literary trustee because you've got somebody running the company. You've got somebody who's negotiating the contracts, negotiating licenses, monitoring the income, doing the marketing. You've already set that up in a company. You're not going to need a literary trustee.

What you're going to need is written contract that exists past your death allowing your company to use this copyright; you need that license in writing.

That will is going to be a lot smaller if you have a fully operating company that is monetizing your creative portfolio. So I see as your empire grows and you have dozens of employees, the larger your company becomes, the less need you're going to have for a literary trustee. That's how I see that working that way.

Joanna Penn: Obviously most people are not have the global media empire mindset that I do. Some people will, but others will be like, “But I just have two books and I want my daughter or my son to benefit from that.”

What is an appropriate amount to be paying a literary trustee? You would pay an agent 15%. Is that what we're talking about?

Kathryn Goldman: Well, that would be perfectly acceptable if you could find somebody to do the work for 15%. And think about it, if you are an indie with just two books and you're making a living out of those two books which is great…

Joanna Penn: Unlikely.

Kathryn Goldman: It is unlikely. What are the chances you're going to find somebody to accept the job of doing everything you do except the creative part but all of the marketing, all of the management, all of the sales for 15% when you as the author are getting 100%.

Right now, I don't know how many people are out there to accept that level of work for 15% commission for an indie who only has two books. But if there's a series, if you have a series and it has proven loyal income generation, you're more likely to get somebody out there who is going to manage those rights and manage that portfolio for 15%. So the mark would be 15%. If you talk to lawyers, they're going to want an hourly fee, which on the other end of the spectrum, it is not a good deal.

Joanna Penn: No.

Kathryn Goldman: That's not a good deal. That's why we have to have this growth of this industry. It really has to happen and then there's going to be a vetting of the self-published authors, the indie authors, to determine whether their books are earning something that would justify the amount of work for a non-creative to put in to continue that piece of creative work.

Joanna Penn: I do 50/50 splits with co-authors, translators, that type of thing, and often that can feel unfair sometimes depending on how much work each party does. And the 50/50 is a good thing. But equally like you're saying, once the author is dead – as you know, we have to face – the work is all being done by that literary trustee.

And it doesn't make sense for the heirs and successors to make loads of money when they're doing nothing. So I totally get your point there.

Kathryn Goldman: Some business model has to be developed. At the beginning it's going to have to be very flexible so that people would go in to the business, so that they would start managing these rights. Then they're going to have to learn what they can earn and what is fair in exchange for the amount of labor they're putting in. Otherwise, you're not going to get anybody to help you out.

Joanna Penn: No, and I like your idea when you said upfront about my two different things.

It would make sense for my thriller to go to a thriller literary trustee and my nonfiction to go into some writing stuff for writers type of area. Although I think often nonfiction ages fast and fiction doesn't age. Stories go on.

Kathryn Goldman: That's exactly right. Because your nonfiction books have a shelf life based on the technology that you're writing about today. If you think about it in that sense your fiction doesn't. A good mystery, a good thriller people go back to them all the time. I go back and read from the 30s, 40s all the time. Good plot is good plot; it lasts.

Joanna Penn: And it's quite funny to say that because I actually like keeping the plain copies of my nonfiction only so I can remember what it was like. A couple of years ago I say, “I wrote that. How did I write that and it is so not true now?”

Kathryn Goldman: Right. But what it does is it shows that you have the background and have been following the industry since it was taking those little baby steps.

Joanna Penn: Which is fascinating.

What's also interesting is looking at the big literary agencies. Most of them are built on the back of dead authors, right?

Kathryn Goldman: Yes.

Joanna Penn: They're built on money that's made from authors like in Ian Fleming's estate, for example. Talking estate and I guess maybe we just don't feel like we will ever be like that but how will we know, I guess.

Kathryn Goldman: Well, you want you be dead.

Joanna Penn: Let's inject some humor into the dead conversation but no, I think this is brilliant. I really do.

Kathryn Goldman: But the writers that come after you are going to watch this and benefit from this, and it will get better over time and it will get more polished.

I think that, in these early Wild Wild West days, you have to be careful because people who would be less than honest might jump up and try and take advantage of indie published authors. I think you have to be careful, and I think you have to do your homework until it shakes out and you see what's gone on before.

Now, one idea, and I haven't thought through this completely, but one idea is the indie co-op. You say you agreed to be a literary trustee for some of your friends who are writers, but that's still you out there on your own. But what about an indie co-op that manages the rights and then there are some kind of coalition or group of indies that are answering this question and really brainstorming this question and setting up a structure to address it. It's contrary to how most of you guys work.

Joanna Penn: If it were like herding cats, it really would. Everyone's so opinionated.

Kathryn Goldman: Let me just throw in this one little item that I want everybody to be aware of when they choose a literary trustee. If they choose a company, if these companies do come in to existence, make sure that there's a provision in there that says if the company goes bankrupt that the contract is terminated and those rights go back to the estate to be redistributed to some other viable literary trustee.

This carries over into traditional publishing. Publishing houses have gone bankrupt and the copyrights are in the estate at the publishing house and they don't go back to the author, to be lost forever. So, I just want to throw that out there because that advice matters equally with this new frontier that we are facing.

Joanna Penn: You're in the US. Will these things be different by country? They sound pretty similar to the UK to be fair.

Are there any country specific things people should watch out for?

Kathryn Goldman: Copyright law is one of the most international laws that is out there right now because of the Berne Convention. The fact that your copyrights live longer than you do, that's a pretty international consent.

Now, how much longer they live differs by country and it ranges from life plus 25 years to, right now in Mexico, it's life plus 100 years. I understand, rumor has it that's changing shortly, but so the length of the term might be different by country, but the fact that the rights survive the life of the author is the same internationally.

The considerations that indie authors have are going to apply internationally; you've got to think about what happens to your rights after you die and just about every country in the world except there are some countries that I'm not clear on copyright existing beyond the life of the author in some African countries right now. So, that's going to be international in flavor.

What is really local in flavor is the estates and trust piece of it.

So, in the United States we have 50 states and a bunch of territories and the estate and trust law is different in every single state and, not only that, but procedures are different in every single county in every single state. So, to put the pieces together, you need a local lawyer. You can't avoid that. The concept is international in flavor. The things we've been talking about in terms of the business that's going to be international in flavor but the mechanics of it are going to be very local.

Joanna Penn: If a listener wants to go into a local attorney's office and get this sorted out, what do they go and ask for?

Kathryn Goldman: You want an estate and trust attorney who has some familiarly with intellectual property rights. You want to know that they have some experience with other creative professionals and have handled the wills or trusts of other creative professionals so that they know how it works. That they know how the mechanisms are developing and that would be the preliminary question.

Get some examples of people that they represented and then go on with your list of copyrights. This is my creative portfolio and then with an idea of what kind of income you're making from it, so that you can have a meaningful conversation about who to choose as a trustee, who to choose as a personal representative and making decisions about your heirs and how you're going to divide it up or whether you're going to choose to give it to charity. Those kinds of things.

Joanna Penn: On that, I wanted to tell you, Beatrix Potter, who's one of my heroines, was child-free as I am and left her estate to the National Trust that basically bought the Lake District in Britain with the proceeds of her books. And I just think there's amazing things that can be done with estates. It's a tizzy, very exciting when you think about it.

You also have this great rip-off protection guide for creatives. Tell us a bit about that and where to find that so people can find a bit more about you as well.

Kathryn Goldman: You can find out about me at my website, which is www.charmcitylegal.com. The rip-off protection report for creative professionals is something that I developed to give some very basic pointers to creative professionals on how to protect their work online and offline. It talks about the notion of estate planning. It talks about good bookkeeping and record keeping. It talks about what goes into a fair agency agreement if you choose to do that. And it gives you some basic pointers on copyright law and how to protect your work.

And then that of course puts you on my mailing list, and I try to email podcasts such as this one and blogposts and various things on topics to educate creatives on how to continue to protect their work.

I just finished an online course for creative professionals. It was a live course and I called it Content Protection for Creative Professionals. It lasted for four weeks and we met weekly and talked about their portfolios and how to protect them and then I gave them some real good action steps so that they can go off and put into their workflow. My goal is to try to educate artists and writers so that they really don't need to come in unless they're really stuck.

Joanna Penn: And people can get the rip-off protection guide at your website.

Kathryn Goldman: Right on my website on the homepage on my profile page or any of the blog posts there is the link there.

Joanna Penn: Thank you so much for your time Kathryn. That was amazing.

Kathryn Goldman: Thank you for inviting me Joanna. I really appreciated.