The New York Times reported on June 25, 2021, that after 14 years of litigation, progress is finally being made on settling the estate of the Godfather of Soul, the late James Brown. Despite his clear intent that his estate goes for the benefit of underprivileged children in South Carolina and Georgia, no scholarships have been granted. The only real beneficiaries of the estate have been the lawyers. So, what could have been done to avoid this spectacle?
First off, it is worthwhile to have a basic understanding of what music copyrights are and how they can be handled in an estate. Imagine a bundle of sticks tied together with rope. These are the copyright for each musician—a bundle of legal rights bound together by a common creator. Most important of these rights is the right to play or perform the music publicly—the so-called performance rights. Because when you die, this bundle can fall apart and certain performance rights are “lost.” The first thing to do is to count out how many sticks you have, that is make an inventory of your copyrights. At the same time, you should make a note of who has legal relationships with each copyright, the agent, the publisher and so on. Once you have your bundle of copyrights inventoried, you can think about how and when you will transfer those copyrights, either during your lifetime or at your death.
Transferring copyrights can be tricky, though some organizations, such as ASCAP, which collect royalties on behalf of its members, permit you to transfer your copyrights by transferring your membership in the organization to your heirs. There are exceptions to this, however. So, it is important to check whether your estate plans will transfer all of your copyrights.
Copyrights are not perpetual, they are considered, in estate planning circles, to be “wasting assets” like pumping oil out of the ground; eventually, the well will go dry and there will be no more money coming in. How long your copyrights will last depends on whether the music was created before or after Jan. 1, 1978. Before 1978, the initial term of the copyright is 28 years, which can be renewed for an additional 67 years. These pre-1978 rights do not vest, that is become transferrable, until the last year of the initial term, which is January 2006 at the latest. If the musician died before the pre-1978 rights vested, then there are different rules on how the rights are transferred.
For those copyrights after Jan. 1, 1978, the copyrights can be transferred at any time, but the creator or their beneficiary if they are deceased, can terminate that transfer. The termination of transfer is limited to the five-year period after the 35th anniversary of the date of the transfer. The beneficiary is determined by statute: First is a surviving spouse, if any, then surviving children or grandchildren. So, in creating your estate plan, as a musician, you should note when the copyright was transferred, and when the five-year period for termination will begin. Make sure to keep that information up to date and available to both your estate planner and your beneficiaries.
From there, with the inventory of your copyrights, you can handle the transfer of ownership as you would with any other assets. You may wish to designate an “artistic executor” for your copyrights—that is, someone who knows and can best handle the management of your rights, to serve alongside a fiduciary who handles the financial investments of the estate. Since you can transfer copyrights during your lifetime, you can put the copyrights into a living trust that you control but which is not included in your probate estate.
So, could James Brown have avoided the lengthy controversy that is still going on in the South Carolina courts? Perhaps not, but having a firm understanding of how your copyrights are able to be transferred and who gets your termination rights, with some creative planning, makes it less likely to result in long-term litigation. Hopefully, as this conflict nears a solution that funds the scholarships, Mr. Brown, wherever he is, will be “Feeling Good.”
Matthew Erskine is managing partner at Erskine & Erskine