As of 2009, the arts, entertainment and recreational sector accounted for 5.3 percent of the gross domestic product. It raked in Sh85.21 billion and put food on the tables of about 300,000 people. Despite the statistics, a good number of creatives do not have any estate or succession planning. In most cases, when they die their families suffer financially as has been reported in the media.
A lack of proper estate and succession planning is the cause. I feel that a lack of awareness that digital assets are property could be a reason that there is little estate planning among creatives. The fact that digital assets are intangible does not mean they are property.
Many people plan for a tangible property like land. However, intangible assets are seldom planned for due to misperceptions. Digital assets acquire property rights once they are registered as intellectual property rights. How many creatives in the sector have secured intellectual property rights?
Once a creative secures intellectual property rights over his digital assets then they automatically acquire property rights. Digital assets include songs, videos, art, books, poems, dances, audio-visual works and social media channels, among others.
Supposing your social media platforms were commercialised to the extent that you were earning good income from it, how do you ensure your dependents continue to earn even after you are deceased? Estate and succession planning will ensure that your lineage continues to earn from your works years after your death.
Digital assets protected by intellectual property rights are property under the law. The Constitution Article 40 (5) gives recognition to intellectual property rights as property. This means they acquire proprietary rights, including the right to use, earn income and transfer it to others. These proprietary rights greatly aid in monetising creative works and estate planning.
Generally, creative works have a statutory life, which guarantees continued ownership for several years. Generally, the rights in creative works exist 50 years after the death of the creator. This means your dependents continue to own the works and exercise proprietary rights even after death. To plan your estate first audit your creative works and if possible, do a valuation then protect them via intellectual property rights. Once this is done then you are ready for estate planning.
The Estate Of Michael Jackson was worth $825 million as of 2016. According to Forbes, this was the highest ever recorded amount for an entertainer as at that time. We can learn estate planning from the pop star.
Michael Jackson drew up a will appointing two executors and a guardian for his children. He also formed the Michael Jackson Family Trust to manage his creative works. The trust manages his estate in a way that his family continues to earn years after his death. Amaru Entertainment Limited was a trust formed by Afeni Shakur, mother to the late hip-hop star Tupac Shakur. The $40 million estate, as of last year, manages his work posthumously.
To estate plan, write a will and appoint executors to implement your wishes. Form a trust into which you will assign ownership of your works for the benefit of your beneficiaries. Professional and trusted trustees can continue to manage your assets to benefit your heirs.
