Good Will Guidance from Bequeathed

Royalties and Will writing

This articles explains what 'Royalties' are, how they come into effect, how to deal with them in Will writing/ upon death.

A

Written by Administrator

Updated over 3 years ago

What are Royalties?

A Royalty is a legally binding payment that is paid to the owner of an asset which can include copyrighted music, movies and other intellectual property for instance for the ongoing use of that asset. Royalty payments ensure that the owner of the relevant asset is paid and compensated for the ongoing use of that which can often be for years to come.

The Royalty payment often provides income/ cash flow through a legal contract for a royalty-based license and typically pays a percentage of gross revenue, net sales or other negotiated rate during the license term. However, it is always crucial to consult a legal advisor as it needs to be understood and clear whether it is a Royalty payment, income or one off fee and this is covered in the legal contract. The Royalty rate will be negotiated at the time the Contract is entered into between the 'Licensor' and the 'Licensee'.

What do I need to know to include them in my Will?

You need to understand what type of Agreement you have in place in terms of the Royalty payment and if you are not sure, you will need to consult a legal advisor so they can determine this for you and clarify how this can be dealt with within your Will. We at Bequeathed have a vast amount of experience of dealing with such Agreements and payments so can always assist. We will typically need to have sight of the Contract itself so we can be certain we are advising you correctly.

How are they dealt with within my Will?

To ensure that such payments are include in your Will, like any other asset we will discuss and advise you on whether you wish to leave them as a specific legacy or include them perhaps in your residuary estate either to one or a group of beneficiaries/ named people.

Your Will writer will also need to ensure that your Contract enables you to include them in your Will as it can also be the case that very strict rules have been built into the Royalty Agreement as to when these will end/ how and to whom they can pass.

How are they dealt with after my death?

Any Royalty payments that are received either to the deceased by cheque for instance or as an attempted payment into their bank account subject to an earlier agreement will need to be returned to the publisher/ performing rights society/ originator for instance and payment re-issued made payable to the estate. The originator will also need sight of the Will to ensure that any payments going forward are then paid in accordance with the Will.

Royalty payments can often be paid for approx 70 years after a person has died (subject to the Contract and Agreement reached) so it is extremely important to ensure these are included in your Will and gifted accordingly to whom you wish.

Related Articles

Identification Requirements

Park Homes, houseboats and Will Writing

Importance of a Legal Agreement where Royalties are concerned

What is the Significance of a Performing Rights Agreement on Death?

Declaration of Trust