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Estate Planning for Authors

Estate Planning for Authors

Author businesses are complicated. From writing to rights deals, each topic is vast and contains a hundred moving parts that need to be mastered. Newbies often have to start small or risk being overwhelmed. Once you’ve spent years digesting information, however, it can be difficult to remember a time when you struggled to format an ebook or set up an ad.

When you find yourself forgetting, ask yourself this question: if you handed your current business to you from five years ago, could they continue to run it smoothly without a blip? I’d wager no. Even with experience, Younger You was probably clueless compared to Modern You. Now imagine what it’s like to be handed your business when you don’t have a pre-existing interest in publishing. This is often what it’s like when authors die. Out of nowhere, family members are handed publishing empires, understanding none of the jargon or workflows necessary to keep it profitable. Sometimes they don’t even know how to turn off things that are costing money. Can you imagine the panic? That’s why estate planning is important for authors.

We authors lead busy lives, so planning for our far-off deaths can seem unproductive. Yet it’s critical. After all, illnesses and accidents happen unexpectedly, and our IP can keep earning our heirs royalties for 70 years after we pass. Being proactive in this area could be a better use of your time than you realise. It will certainly minimise stress for the loved ones who inherit your books.

This blog post shouldn’t be taken as legal advice. Hiring a professional lawyer is the best way to plan your estate because laws change and procedures differ per country. Having said that, this article will explore some top-line issues you should consider to ensure the handover of your author business goes as smoothly as possible.

Preparing Potential Trustees

One of the first things you need to consider is who will take over once you’re gone. Without a will, the default person will be your next of kin. However, it doesn’t have to be that way. In your will you can appoint executors and trustees to handle everything if you don’t feel that your heirs are capable or interested in managing your business. If you’re unfamiliar with these terms, here are a quick pair of definitions from Bequeathed.org:

“Executors are the people who organise your affairs after your death.

Trustees are people who run the trust that your will creates.”

In essence, executors manage the administration of your estate, wrapping up your financial and legal matters and selling your home (if necessary). Trustees then take over, run the trust and hand out any income it creates. The same person often fills both roles, but they can be different. Executors and trustees can be the beneficiaries who are inheriting your estate, but they can also be non-beneficiaries put in place to work on their behalf. Just understand that the handover can take months and someone needs to manage your business throughout the process.

Who you choose and how you divvy up responsibilities is up to you. Just remember to ask potential trustees in advance so that the responsibility doesn’t take them by surprise. If you want, you can even pre-train them while you’re alive so that they understand the basics ahead of time. Carrying out this preamble will make the transition significantly easier for everyone involved.

Decision Makers and Profit Splits

Working out who makes the final decisions and how everyone gets paid is important, especially if you have several beneficiaries and trustees. If, for instance, you wanted an author-friend to manage your estate for your heirs, should they get paid for their time? Should that payment be a fixed salary or a percentage of profits? Do you want to give trustees enough agency to appoint managers and other members of staff? Should you put a monetary cap on their decision-making power? Who has the final say if beneficiaries want to maximise profits but trustees want to shrink profit margins to grow revenue?

Likewise, who makes the creative decisions? Can trustees license out your IP or hire ghost writers to generate more books? What happens if your beneficiaries want your canon books to stay pure and undiluted? Working out who makes the final decisions and how the finances get appointed can clarify your intentions and help circumvent family arguments. When the terms are written clearly in a legally binding document, everyone will know who handles everything, no matter the situation, what is defined as income and how large a cut everyone can take.

Provide Instructions

Regardless of who takes the wheel, they’ll need instructions. This is true whether they’re totally oblivious or a practicing indie author in their own right. If they’re a newbie, your instructions will need to start with a business overview, things like how IP works and how it can be monetised effectively. Maybe recommend learning resources. Then get into the practical aspects of your business. List your titles and the formats you’ve produced, as well as where you keep the source documents and your naming conventions for labelling file versions. If your author business has multiple streams of income, you might also want to cover merchandise, rights deals and other investments you have made that generate income. All of this will brief them on the current state of your business.

Next, you will want to discuss the future. If you own your copyright and publishing rights, there’s basically no limit to what your trustees can do. Hence, you will need to tell them how they can produce new products and guide them to make wise choices. That means creating production instructions and recommending software they can use. For extra help, you could also provide a spreadsheet that contains all of your IP’s metadata, plus a list of all of your publishing and software account passwords. Round off these instructions with your desires but always allow beneficiaries an exit strategy should they want to sell everything and completely leave the publishing business.

Suggest Trusted Contacts

Most authors work with a lot of professionals. Indeed, self-publishing is a misnomer because serious self-publishing authors actually hire a team to achieve their objectives. You, for example, might hire an editor and a cover designer. You might also have an accountant. If your operation is more sophisticated, your business may deal with co-writers, agents, audiobook producers, distributors, formatters, lawyers, publicists, publishers, retailer contacts, translators and web designers.

It pays to keep a list of all of contacts for your heirs should they ever need them. The list doesn’t need to be comprehensive; just your core team and most useful contacts will do – all of the companies and people you trust to help them manage your estate. Make it as easy as possible by including some of the following details to help them find these people, introduce themselves and establish rapport:

  • A contact’s name
  • Phone number
  • Email address
  • What they do for your business
  • How you know them
  • Projects they’ve worked on in the past
  • Their fee (if applicable)

Work Out What Happens with Collaborators

One of the most complicated matters you will want to pre-handle for whoever takes over is the matter of collaborative projects. Lots of writers these days have co-writers. Some run multi-author anthologies. Some work with audiobook narrators on a royalty-split basis. What happens with all of those projects when you’re not around to nurture your relationships with collaborators? These people will still need to be paid in many cases, and the terms of any contracts you’ve drawn up will need to be upheld.

To reduce the pressure on your heirs, decide the answers to a few important questions ahead of time, and get them in writing to ensure everyone gets a fair deal. For example, should you hand over the IP rights to collaborators of projects you worked on together? Since you’ve likely spent time massaging retailer algorithms to ensure they regularly recommend that IP to customers, do you want to keep it published on the same platform? Perhaps your collaborators would rather have it transferred from KDP, for example, to a platform that automatically manages royalty splits, like Draft2Digital or Publish Drive. Asking everyone beforehand is wise because it helps to keep everyone happy and ensures nobody is left fighting a legal case in your absence.

Planning your estate can be difficult. It might feel morbid and your family, who don’t want to think about your death, might take some coaxing to get involved. But frontloading all of this work will make their lives easier after you’re gone and will ease your mind knowing that everything has been handled while you’re still here to get the best possible outcome.

Daniel Parsons

Daniel Parsons

Dan Parsons is the bestselling author of multiple series. His Creative Business books for authors and other entrepreneurs contains several international bestsellers. Meanwhile, his fantasy and horror series, published under Daniel Parsons, have topped charts around the world and been used to promote a major Hollywood movie. For more information on writing, networking, and building your creative business, check out all of Dan’s non-fiction books here.