May 20, 2016

Law360 interviews Josh Kaufman on valuing intellectual property for estate tax purposes

2 min

Venable partner Josh Kaufman was interviewed in a May 20, 2016 Law360 article on valuing intellectual property for estate tax purposes. While determining the value of cash or marketable securities is visibly straightforward, assessing the value of intellectual property on the date of someone’s death and how much revenue it could generate is not as clear.

"The most common mistake [an estate's] personal representative would make is not having people in the field who know them and can help them," Kaufman said discussing the importance of a qualified appraiser. "You can be very wrong because what truth may hold in the literary publishing field is not necessarily going to hold in the music publishing field."

Commenting on unpublished works, rights of publicity and performing licenses, Kaufman noted that just because an estate representative does not want to license a work, its value may not be lower according to the IRS. "The fact that you’re not choosing to exploit that doesn’t mean that the asset is still not in your estate," he said. "You're making a choice, but the asset is still there and you’re saying it’s not, and that’s where the disputes arise."

Finally, Kaufman pointed to the myth of intellectual property increasing in value after someone dies. "For most IP, when people die, the value actually shrinks. We all hear the stories of so-and-so who died a pauper and after he or she died, they were discovered and their works skyrocketed," he said. "That's a tiny, tiny percent of what actually happens."