With summer concerts, tours, and music festivals in full swing, I thought I would share estate planning considerations unique to music artists (the performing artists and songwriters, unless specified otherwise, the “artist”). I will use Taylor Swift as an example because the Taylor Swift/Scooter Braun controversy is helpful to my discussion.
The Controversy; Nuances Connected to Estate Planning for Music Artists
Copyrights are an asset class that should be discussed as a part of artists’ estate plans. I’ll discuss two copyrights, masters and music composition. Each copyright is connected to specific bundles of rights and it is important to understand them as an asset class, and in relation to artists, to establish a bespoke estate plan that will attain artists’ intentions.
One type of copyright is rights to the “master” recording. This is the sound recording made for a song as performed by the performing artist. For example, when you listen to a Taylor Swift song, that finished product you are listening to is the “master recording”. Rights to the masters include publishing the recording, reproducing it and renting it (also commonly be known as licensing). Commonly, when performing artists are signed to a label, the label retains significant rights to their masters and the performing artist receives royalties from the use of such masters.
The reason that you are seeing the new release of Taylor Swift’s older albums, titled “Taylor’s Version”, is because, allegedly, Taylor had a dispute with Scooter Braun over her masters. Scooter’s label, Big Machine Label Group, owned the rights to the masters of six of Taylor’s albums.
However, because Big Machine’s rights were limited to the original recording/masters, and not the underlying copyright in the songs themselves (discussed further below), Taylor was able to re-record those albums. She thereby produced new masters of these songs.
As suggested above, a second type of copyright is the rights to the music composition (also known as publishing rights). This copyright is rights to what was created by the songwriter, including the composition, lyrics and melody. Unlike masters, which are specific recordings that typically are owned by labels, songwriters typically own the rights to music composition.
Back to Taylor Swift. As she has written or co-written almost all of her songs, she likely owns the accompanying music composition copyrights. Such ownership would have helped enable her to re-record her older albums (as part of the Scooter Braun controversy) as the songwriter from whom she would have had to obtain consent was herself.
Like most intangible assets, estate planners may consider how these copyrights are held, for example, are they held jointly or in trust? Would the artist prefer, inter alia, to divest themselves of such assets during their lifetime, on death, or hold them in trust for the benefit of beneficiaries? What are the tax and other relevant considerations? These are all points to trip through with artist clients.
Reversion Rights/ Termination Rights
In addition to the above estate planning considerations, if the original copyright owners have licensed their copyrights, you may wish to consider when the copyright licences expire and what happens on expiration. This is important, inter alia, to determining who may be the intended recipient beneficiaries at such time.
In Canada, there is a right of reversion if the songwriter was the first owner of their respective music composition copyright. If they were the original owner, and certain conditions are met, their copyright automatically reverts to the artist’s heirs 25 years after their death. The underlying intention being to protect the rights of the songwriter’s estate from unfair deals made during their lifetime. Practically, this means that, in general, if the music composition copyright was sold during the songwriter’s lifetime, the copyright will remain with the purchaser for the first 25 years following the death of the songwriter. However, 25 years after such songwriter’s death, the copyright will revert to the songwriter’s heirs, where they could own the copyright for the next 45 years. After the 70th anniversary of the songwriter’s death, the copyright expires. The songwriter’s heirs will no longer own the copyright, as the songwriter’s work enters the public domain; this means that it will be able to be published or reproduced without the consequences of violating copyright by anyone.
Reversion rights in Canada are similar to termination rights in the US. Termination rights result in similar outcomes to reversion rights in that the copyright reverts to the songwriter or songwriter’s estate, as the case may be. A distinction between Canada and the US regarding reversion/termination rights is when the associated rights come into effect and how they can be exercised. For example, in the US, termination rights can be exercised 35 years after the songwriter’s original transfer of a copyright. Unlike in Canada where the revision right is automatic, in the US the termination right is an optional right that the songwriter’s heirs must exercise by giving notice to the current copyright holder.
In addition to the estate planning side, copyrights are important to understand on the estate administration side. For example, you may consider:
- Taking inventory of all copyrights of a deceased, as well as all created work products. This will assist executors in determining the deceased estate’s entitlements. For example, in Canada, since reversion rights are automatic, the executors of the estate of a deceased songwriter may not know that clock has commenced regarding the reversion rights. Executors (and especially artist clients) keeping an accurate inventory helps to ensure that no asset is missed.
- Valuing the copyrights. Complex copyrights may need to be valued by professional appraisers. As an asset of the deceased’s estate, copyrights likely will need to be valued and reported where necessary (e.g. for probate tax purposes).
- Determining if the copyrights need ongoing management following the artist’s death. If ‘yes’, then on the planning side, clients may wish to consider appointing an appropriate executor(s) who is able to manage the deceased’s copyrights or comprehend the nuances to an extent where they would be able to find an appropriate agent if necessary (and in this regard, the Will may include special powers for the executors and agents).
Managing copyrights can be complex, with such complexity increasing with the number of copyrights in which a deceased owns an interest and the number of other parties who also are owners of such copyrights. Involving an estate planning expert early has merit for structuring and protecting the rights of the estate in a manner that achieves a deceased’s intentions.
Thanks for reading! And a special thank you to one of our articling students, Latoya Brown, who assisted me in writing today’s post!
 Copyright Act, R.S.C., 1985, c. C-42 s. 14