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Entries in wills (9)

Wednesday
Nov272013

“She’s Crafty”: GoldieBlox, Beasties, Copyrights and Codicils

Civil Litigation AttorneyIP Litigation

 

by Nicholas Kanter & Robert A. Hull, Esq.
November 27, 2013

In 1986, New York hip hoppers the Beastie Boys released Licensed to Ill, the first rap LP to top the Billboard album chart, selling over 9 million copies in the U.S. One of the singles from the hit album was Girls. The song, in which the Beastie Boys sing about their affection for girls, is riddled with sexist lyrics, such as:

Girls - to do the dishes

Girls - to clean up my room

Girls - to do the laundry

Girls - and in the bathroom.

Seventeen years later, northern California toy company GoldieBlox Inc. is rewriting feminine roles, by selling toys meant to inspire young girls to construct, engineer and invent. The problem is they also rewrote the Beasties’ song Girls to market their products:

Girls to build the spaceship,

Girls to code the new app,

Girls to grow up knowing

That they can engineer that.

The rewritten song and accompanying video became a YouTube sensation, receiving over 8.5 million hits since being uploaded to YouTube on November 17, 2013.

In a lawsuit filed on November 21, 2013 in the Northern District of California, GoldieBlox claims the Beastie Boys threatened them with copyright infringement.

Rather than wait for the Beastie Boys to sue, GoldieBlox filed their complaint, seeking a declaratory judgment that their parody video does not infringe the rights of the Beastie Boys (and others that hold rights to the song), and constitutes fair use.

 

Fair Use: Is GoldieBlox's Version of Girls Defensible or Not?

 

GoldieBlox claims they created their song and video specifically to “make fun of the Beastie Boys song, and to “further the company’s goal to break down gender stereotypes and to encourage young girls to engage in activities that challenge their intellect, particularly in the fields of science, technology, engineering and math.” 

Based on the underlying purpose of the song and its intended effect, GoldieBlox asserts their song is protected by the Fair Use Doctrine.  

Under the Fair Use Doctrine, certain uses of another's copyright-protected work may not be considered infringement if the protected work is used for purposes of “criticism, comment, news reporting, teaching…scholarship, or research”  ( 17 U.S.C. §107). Whether a particular use qualifies as “fair use” is determined by considering four “fair use” factors, which include:

  1. The purpose and character of use – how transformative is the new material? Does the new material add new information or understanding?

  2. The nature of copyrighted work – what is the value of the work vis-à-vis the core of the copyright’s protective purposes.

  3. The amount and substantiality of the portion used in relation to the copyrighted work as a whole – this factor looks at whether the quantity of the original work used is reasonable in relation to the purpose of the copying.

  4. The effect of the use upon the potential market for or value of the copyrighted work – does the new material deprive the copyright owner of income in some way?

While GoldieBlox’s song by itself seemingly qualifies as Fair Use, the crux of the lawsuit (assuming it does not settle) will likely center on whether GoldieBlox’s use of the song to advertise and sell its retail goods causes the song to lose Fair Use protection.

 

A Brass Monkey in the Machine?

 

Complicating the matter further is the fact that one of the members of the Beastie Boys, Adam “MCA” Yauch, died last year leaving a will which provided that in no event may “any music or any artistic property created by me be used for advertising purposes.”  Another fly in the ointment was the fact that apparently, MCA hand wrote these words on his prepared will near language which prohibited MCA’s image or name from being used for advertising purposes.

It is not clear whether the added language was part of the original will or was added later. If added later, such an amendment (typically called “codicils”) must be executed with the same formalities required of the will. Those formalities include executing the codicil in the presence of witnesses, etc.

Thus, if the handwritten language was added by MCA after the execution of the will, but for example without the presence of witnesses, it could be successfully challenged. However, there seems to be no mention in the press of a specific challenge to such language. Therefore, the language was likely present at the execution of his will.

Presuming this language was valid, in order for it to be enforceable in this case, obviously MCA must own an interest in the song (i.e., the interest must be part of his “estate”).

But, if MCA owned an interest but had previously transferred this interest into, for example, a living trust, the trust would be the owner, not MCA’s “estate”). If there was no commercial prohibition language in the trust, then the will language would not apply to prohibit commercial exploitation of the trust’s interest.

Also, this will restriction would apply only to the beneficiaries of Yauch’s estate. Absent an agreement to the contrary, joint owners of a copyrighted work have an equal right to license the copyright, provided that the other joint owners get their shares of the proceeds.

Thus, if there was not such an agreement between MCA and the other Beastie Boys preventing commercial exploitation of this song, the others could independently license the song to GoldieBlox, despite the prohibition by MCA, with MCA’s estate receiving its share of the proceeds. The prohibition by MCA would likely apply to the beneficiaries of his song interest, but would not be enforceable against the other joint owners.

From the published news reports, it appears as though the others do not wish to permit GoldieBlox to use the song in this manner.  So, MCA’s wishes may indeed be carried out.

However, if the will restriction is not enforceable, MCA’s heirs may be able to license the work commercially, despite objections from the other Beastie Boys.

Ultimately, it will come down to whether the GoldieBlox version is considered a “fair use” of the song. If so, MCA could not have prevented this commercial use while he was living and cannot prevent it after his death.

 

Nicholas Kanter is a Business and IP Litigation Attorney at our firm. Contact him via email: nkanter@lewitthackman.com.

 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.
Tuesday
Jul032012

Will Contests & Estate Disputes – Five Ways to Avoid a Family Feud 

Trusts & Estate Planning

 

by Kira S. Masteller
818.907.3244

 

Even in the most complacent of families, estate disputes can sometimes arise under the added strain of bereavement and emotional loss.

When family members don't get along (which is more common than not) family feuds can take on a costly aspect in terms of time and money spent in litigation. Estate disputes can drain all of the resources you've worked hard for, and leave the ones you love most feeling bitter, neglected and without the gifts you intended to leave them. 

 

Avoiding a Contest

 

First, you'll need to take some common sense measures.

The most common argument a family member will make when disputing a will or trust is that the writer, or testator, was not of sound mind. Based upon your age or medical condition, consider having your doctor and a psychologist evaluate your physical and mental health just before finalizing your will, so that you can avoid this allegation.

Seek your own legal counsel, separate from other family members to protect your interests and the interests of those you wish to give gifts to.  

Consider hiring a corporate trustee to serve instead of family members. Corporate trustees are less likely to be seen as abusing their trustee powers; whereas a stepparent or favored child may unwittingly cause suspicion or jealousy among your other heirs.

Last, make sure you own the property you plan to bequeath outright. Jointly owned property such as business interests, real estate, time shares, etc., may revert to other owners.

Once you've done all of these things, you're ready to put your intentions in black and white. Here are five simple steps you can take to avoid inheritance disputes when you pass: 

1. Equal and Unequal Distribution of Property:

Try not to play favorites. The general rule here is to ensure that all of your children and/or your spouse are treated equally. There's not much room for argument when three children each get 1/3 of the house, business, or other property. 

Even better, if you can distribute property while you're still living – make sure you have legal documentation reflecting what you gave or sold to your heirs – you may avoid a contest altogether. 

But how should you handle distribution of your estate if you absolutely don't want to treat all of your family members equally?  

2. Disinheritance:

Make your intentions clear by defining which people will not inherit property, or which will get smaller shares of your estate. Avoid the whys and wherefores – these only encourage bad feelings and potential contests.  

3. Family Financial Obligations:

Seed money for an heir to buy a house or start a business should be thought out carefully. Is the money an outright gift? Is it a loan that needs to be paid back to your estate? Or is it an advancement on your estate? Clearly define your intentions here, to avoid family arguments and litigation.  

4. Business & Property Contracts:

Your business is thriving and all of your children want a share, but one in particular devoted a career to nurturing and running it while the others pursued other interests. Consider selling it to your heir of choice outright, while you're still alive.  

5. No Contest Clauses:

Make your heirs forfeit their interests in your estate should they contest your trust. This can make the more disgruntled members of your family think twice before raising disputes.

 

Kira S. Masteller is a Trusts and Estate Planning Attorney who helps family members avoid will and estate disputes and probate proceedings. Contact her via e-mail: kmasteller@lewitthackman.com.

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

Thursday
Feb232012

Charitable Trusts + Low Interest Rates = Tax Savings

Trusts & Estate Planning

 

by Kira S. Masteller
818.907.3244

 

Some people don't like to talk about death and because of that fear, distaste or superstition; they put off planning for the future. But think about it this way: 

When you pass away, your money and assets will go to one of two places. They will either go to (1) People you care about, or (2) Institutions who have already received your money throughout your lifetime – the State and Federal Governments. 

Those are very broad categories, but it's essentially true. When we talk about the people you care about, we mean more than just those individuals who make up your immediate family. 

In estate planning, “what” you care about may include people, such as yourself, your children, your siblings and your friends – but might also include your alma mater, a national animal rights group, your favorite church or the local Elks Lodge, among many, other organizations. 

The CLAT – Smart Moves in Tax Savings

 

One way to make sure you provide for all of the people and charities you care about is through a CLAT, or Charitable Lead Annuity Trust. The benefit of the CLAT is that you can take advantage of some huge tax breaks right now, while interest rates remain low. In fact, the lower the interest rate, the bigger the tax savings through CLAT. 

These charitable trusts will pay your favorite charity or charities a pre-determined amount of money for a pre-determined time frame, leaving whatever funds or assets that are left at the end to revert back to you, your heirs, or even to another trust. 

If using a CLAT to pass along assets to beneficiaries, your heirs wind up with whatever funds or assets you used to fund the CLAT, and the possibility of very little or no gift tax liability at the end of the term.  For example: 

You own stock that yields dividends (income) you do not need.  You put $100,000 of that stock into a 10 year CLAT that gives $5,000 annually to a program that benefits at-risk teens. The income from the stock increases the value of your CLAT, and at the end of the term, your children get the principal stock, plus the profits it generated. The gift tax your children will owe is based on what the IRS projected the charitable trust to be worth when you first set up the CLAT. 

If employing a CLAT for yourself, you will get the original assets back, and an income tax break. 

Charitable Trusts can be a convenient way to make sure both your heirs and your favorite organizations receive gifts during your lifetime, while you gain an ever-important tax break. 

Kira S. Masteller is a Shareholder in our Trusts & Estate Planning Practice Group. If you have questions about tax planning, business succession planning, or shifting your assets, please call her at 818.990.2120.

 

 
Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

 

 

Thursday
Jan122012

Funding a Living Trust -- Estate Planning Advice

Trusts & Estate Planning Attorney

by Kira S. Masteller
818.907.3244

The most common reason for establishing a living trust is to avoid probate and take advantage of estate tax exemptions.

If you don’t have a revocable trust, your heirs could spend months or even years waiting for the California court to approve the administration of your assets, the payment of your debts, and the distribution of whatever is left of your money/property to your family, friends, charitable organizations or other heirs.

Properly executed Trusts avoid probate. Wills do not avoid probate.

A revocable trust simply means that your trust can be changed or even revoked whenever you like during your life; while a living trust means it goes into effect while you are still alive, unlike a Will, which is not effective until your death. A revocable living Trust avoids probate and can avoid a Conservatorship proceeding while you are living in the event you are unable to manage your own affairs.

Depending on the value of your estate and what type of assets you have, you will decide with your estate planning attorney whether or not the use of a revocable living trust is for you.

Upon executing your revocable living trust, you will need to “fund” your trust. Establishing the trust without putting your assets into the trust defeats the purpose of having a trust in the first place.

A Properly Funded Revocable Living Trust

 

Estate planning does not end with the execution of the trust document. You actually have to transfer title of your assets into the name of the trust (i.e., John Doe, Trustee of The John Doe Family Trust). If you leave an asset out of your trust, that asset could wind up going through probate.

So which assets should be used for funding a trust? Here are some important ones:

▪ Bank Accounts
▪ Brokerage Accounts
▪ Business Interests, i.e. professional corporations, partnerships, sole  proprietorships, etc.
▪ Certificates of Deposit
▪ Investments
▪ Life Insurance
▪ Real Property, i.e. home, land, commercial buildings, etc.
▪ Recreational and Other Vehicles, i.e. cars, motor homes, boats, planes, motorcyles, etc.
▪ Time Share Ownerships

*Note: Retirement assets, annuities and life insurance do not get transferred into your trust. You will work with your estate planning attorney to determine how to name the beneficiaries of these assets so that they are in alignment with your estate and tax planning objectives.

Let’s say you have a lot of assets, and are not sure where to begin when funding your trust. The first step is to make a complete list of all of your interests, property, and investments. You can check off items on this list as you start funding.

Next, I always recommend that my clients check their mail. Every time you get a monthly statement from your bank or brokerage company, make sure the name on your statement is listed with your name as Trustee of your Trust Name. If it isn’t, call that institution to get that particular asset transferred to your living trust, rather than leaving it in your individual name.

Your estate planning attorney will change the title to your real property by recording a Deed with the County. Your real property in other states should also be titled in the name of your trust so that these assets will not go through probate. You will save your heirs a lot of time, money and headaches by properly funding your trust, not to mention utilize all of the estate tax planning exemptions available.

If you have questions about how a particular asset should be handled, ask the professionals. Talk to your estate planning attorney or accountant.

Last, don’t forget to provide copies of your list to the Trustee, your accountant, and your attorney. Establishing a revocable living trust avoids probate court, but filing your list of assets and keeping good records will make handling your estate a lot easier for your beneficiaries.

Kira S. Masteller is a California Trust and Estate Planning Attorney. Call her at 818.990.2120 if you have questions regarding funding a trust, probate or estate planning for yourself or your business interests.

 

 
Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

 

 

Tuesday
Dec062011

Steve Jobs Estate Taxes – Which Way is “Up” for the Jobs Family and for You?

 

by Robert A. Hull

As the world mourns the loss of innovative tech giant Steve Jobs, we learn he may have left his wife, Laurene, and family up to $6.78 billion dollars in Disney and Apple stock.

He also left his family in a quandary not of his own making, namely, how to negotiate financial pitfalls while traveling on uncertain terrain.

Unfortunately, with the recent failure of the so-called congressional Super Committee to address tax and spending reform, the “Bush tax cuts” are set to expire in 2013.

Capital Gains Tax Legislation: As it Stands Now

 

If there are no further changes in the law:

▪ The current 15 percent capital gains tax rate is set to rise to 20 percent,
▪ Income tax rates are due to increase,
▪ The current $5 million gift/estate tax exemption will return to a $1 million exemption.

The key takeaway is “absent further legislation”, i.e., no one knows what the law will be in 2013.

At least as far as the Jobs family is concerned, if they sell the stock before 2013, and (here’s the kicker) if indeed the Bush tax cuts lapse, the Jobs family may avoid almost hundreds of millions in capital gains tax they would have to pay at the higher 20 percent rate if they sold after 2013.

The great news is that the beneficiaries of Steve Jobs’ stock will receive an automatic step-up in basis of the stock to the value of such stock on Jobs’ date of death (including a step-up on Laurene’s ½ community property interest in such stock) – i.e., they will receive the benefit of the increase in the stock’s value since acquisition, tax free. However, any further increases (after Jobs’ death) in the value of the stock interest Jobs’ passed to his heirs will be subject to capital gains when the stock is sold.

So, there’s a capital gains tax of 15 percent or ‘possibly’ 20 percent, which prompt some questions:

1. How are individuals and businesses supposed to make certain financial decisions in the face of such uncertainty?

2. And, how are financial and estate planning professionals supposed to give sage advice and counsel when none of them know what the law will be in 14 months?

Steve Jobs’ Estate Taxes: Looking Up

 

The answer to both questions above is that effective planning in such uncertain times is a challenge. Obviously, if considerations other than tax consequences are paramount, then those business decisions may take care of themselves.

If the Jobs family wishes to retain Steve Jobs’ control of Apple, for example, they might hold on to the stock, risking a higher tax in the future if Congress does nothing or increases capital gains.

But, if the tax consequences are the most important consideration (hey, who really wants to give the government $876 million?) they may wish to sell the stock. But, the Jobs family will be divesting themselves of Steve Jobs’ legacy.

Tax and Estate Planning for Your Family

 

Many of you may be facing similar questions, though not on the scale of the Jobs family: To sell or not to sell? To gift or not to gift? For example, do you as parents and owners of a family business utilize the current $5 million gift tax exemption to gift portions of the family business to your children, even though you may prefer to do so in a few years?

If you do so before 2013, you can pass along $5 million of business value tax-free. If not, you risk having to pay gift tax on the portion of the business you pass which is worth over $1 million. . . unless Congress takes some other action, of course.

Given our government’s penchant for last minute deal-making, short-term fixes, and for striking bargains that are difficult to predict (like a “default” return to a $1 million exemption in 2013 absent further action), it may not be prudent to wait till the last minute to make these financial decisions.

Some decisions take time and fit into a family’s overall strategy (e.g., making gifts of minority interests in a family business or property, over time) and you may not have the necessary time to effectuate such a strategy or sell the stock before the new law goes into effect.

So, which way is up? And, where does this leave us all?

It leaves us in the same boat we’ve been in longer than any of us care to imagine – making life-altering financial decisions based on less information than we wish we had. However, it is nonetheless helpful to have a first mate on this trip, a professional who can help you best negotiate the rocks and reefs which may be lying just below the surface.

 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

 

 

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