What Happens to Trademark Ownership After Death

Welcome to episode 161 of the Own Your Genius podcast, where we empower entrepreneurs to use their education and their experiences to create dope businesses. I’m your host, Attorney LaConya Murray. The recent passing of One Direction member Liam Payne has many people questioning what’s going to happen to his various assets, including his registered trademarks. Yes, trademarks. Whether you’re an individual, part of a partnership, or running a registered business, understanding how trademarks are handled upon your death is essential. But before we dive into today’s episode, make sure you are subscribed to the podcast so you don’t miss any insights on how to own your genius.

Welcome back to the Own Your Genius podcast where we discuss building businesses, growing brands and what else? Only your genius. I’m your host, Attorney LaConya Murray, owner of Off The Mark IP Solutions. Off the Mark is a boutique intellectual property firm representing innovative entrepreneurs aka geniuses who are looking to protect their brand and grow their business with ongoing legal support and business mentorship. We have a good one for you today, so let’s get started.

So, understanding trademark ownership. The first thing we want to talk about is the different structures of ownership for trademarks. If you own a trademark individually, it’s pretty straightforward what will happen to your trademark after your death. It’s going to become a part of your personal estate, and you can specify in your will who you want to manage or transfer the trademark to after your death. But what happens if you’re part of a partnership or have a registered business entity like a corporation or an LLC? Let’s talk about what’s going to happen in those instances.

First of all, we’ll talk about what’s going to happen in the case of a partnership. In those cases, the partnership agreement plays a pivotal role in what’s going to happen to that trademark if you pass away. Usually, this agreement will outline what happens to the partner’s shares, and that includes trademarks. Now, the partnership agreement and everything that’s going to happen to the assets of the business when a partner passes away is really an example of why all contracts aren’t created equal. If the agreement is well drafted, it will have clear instructions for transferring the deceased partner’s interest. However, if the agreement is not well drafted, those assets, including the trademark, could become part of the partnership’s assets and be distributed to the remaining partner’s heirs. That might not be what you’re looking to do. So what happens to those assets will depend on what’s in the agreement and what it says about the dissolution of the partnership. A well-drafted partnership agreement is essential.

Now, I know there are people out there right now who are in partnerships and don’t have an agreement at all. If that is you, go ahead and get with your partner, put something in writing, and discuss what will happen to the business and assets if something happens to one of you. Have that conversation and put it in writing.

Now let’s shift focus to trademarks registered by business entities like corporations or LLCs. In these instances, trademarks are considered assets of the company. So you don’t have to worry about what will happen to those assets if you pass, as they’re part of the business’s assets. The death of an individual associated with the business won’t directly affect trademark ownership. The business will continue to manage the trademarks as assets, and the governing documents—whether it’s bylaws for a corporation or an operating agreement for an LLC—will dictate how ownership, interest, and assets are distributed or transferred upon the death of an owner. Again, that’s why contracts are important. Besides death, we should also consider cases where someone is unable to fulfill their duties due to incapacitation.

To ensure a smooth transition, there are a few things you can do. First, if you own the trademark personally, include your trademarks in your will. Clearly specify what you want to happen to those trademarks when you’re no longer around. This will help avoid any confusion or disputes among your heirs.

Second, review your partnership agreements and make sure they include provisions for transferring trademarks upon a partner’s death. If they don’t, it’s time to update those agreements.

Third, regularly review and update your business’s governing documents, such as operating agreements and bylaws. By keeping them up to date, you’ll ensure that your business entities’ procedures for managing and transferring trademarks and other assets are legally sound.

Finally, consult with a legal professional who specializes in intellectual property and estate planning. Their expertise will help you create a comprehensive plan that protects your trademarks and ensures a smooth transition.

In closing, I want you to remember that trademarks are valuable assets that require careful consideration in estate planning. Whether you own them individually, as part of a partnership, or through a registered business entity, the fate of your trademarks upon your death will depend on who owns the trademark, the structure of the business, and any relevant legal agreements. By proactively including trademarks in your estate planning, you can preserve the value of your legacy for future generations.

But let me say this: If you’re a sole proprietor and own the trademark individually, passing the trademark on in your will is one thing. However, you must remember that trademarks are only valid if they continue to identify the source of a good or service. Bequeathing a trademark to someone who fails to use it will make that trademark worthless. If the new owners don’t actively manage and utilize the trademark, it will become abandoned and lose its enforceability. So when considering who to pass your trademark onto, ensure it’s someone who can continue to grow that legacy.

Geniuses, thank you so much for tuning in. What are your takeaways from this week’s episode? If you found today’s podcast insightful, make sure to share it with fellow entrepreneurs. Don’t forget to subscribe, rate, and leave a review.

Let’s take this conversation over to the Markedlegal Community. I want you to share this episode with three people and have them meet you there. But you know what to do before you go. Make sure you hit that subscribe button and rate the podcast. Until next week, I want you to keep building your business, growing your brand, and owning your genius.