Who Owns You After You Die, Inside the Estates of Deceased Celebrities


Published on Sep 06, 2018

The importance of the decisions made during life can impact intellectual property after death, including postmortem rights of publicity. Celebrities face additional considerations regarding the right to publicity, social media, digital media, economic and tax ramifications, estate planning and estate representation. This seminar is a panel discussion with presentations from Professor of Law Jennifer Rothman and tax law expert and former Estate Tax Attorney at the Internal Revenue Service Priya Royal with questions from panelists basketball legend Kareem Abdul-Jabbar and his business manager Deborah Morales.

This was held at the 2018 National Trademark Exposition on July 27, 2018 in the SC Johnson Conference Center at the National Museum of American History and offered Continuing Legal Education credits.



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>> MARY BONEY DENNISON: Welcome,
everybody. I'm Mary Boney Denison, the

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Commissioner for Trademarks from the
U.S. Patent and Trademark Office. We

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have a fabulous panel here for you
today. We are really excited to hear

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all our speakers on the postmortem
right of publicity. I'm going to

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introduce them in alphabetical order.
So we start with Kareem Abdul Jabbar,

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the greatest basketball player in
history, as everyone knows. (Applause)

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When he retired from the NBA after
player a record 20 seasons as well as

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setting the records for points scored,
games played, minutes played, blocked

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shots and defensive rebounds, he
was also a record six time NBA most

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valuable player, a record 19 time NBA
All-Star, 15 time All NBA selection

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and 11 time NBA all defensive team
member. Wow! Don't know how you can

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even remember all that. But since
retiring from the NBA, he's been

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active as an education advocate,
writer of social commentary, novels,

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history books. He's written 15 books
including his most recent New York

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Times best seller Coach Wooden and Me,
Our 50 Year Friendship On and Off the

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Court and Becoming Kareem, Growing Up
On and Off the Court. Mr. Abdul Jabbar

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also produced a documentary adaptation
of On the Shoulders of Giants, which

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won an NAACP award. And of particular
interest to this audience of IP

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lawyers is his book entitled What
Color Is My World, The Lost History of

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African American Inventors. And if
that weren't enough, in October he has

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a novel coming out called Mycroft and
Sherlock. So he has been quite busy.

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In 2016, President Obama awarded him
the Presidential Medal of Freedom, the

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country's highest honor for civilians.
He also is an award winning columnist

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for the Hollywood Reporter and the
Guardian. Along with his writing, he

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is a highly sought after public
speaker so thank you for joining us

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today. (Applause) We are also really
lucky to have his business manager Deb

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Morales on the panel. Ms. Morales is a
successful businesswoman who bounces

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her busy careers as a CEO, an award
winning movie producer and business

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manager for Kareem Abdul Jabbar. As
Founder and CEO of Iconomy Multimedia

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& Entertainment, Ms. Morales has been
helping professional athletes go from

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success to significance by creating
a plan to ensure financial stability

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while they pursue their post-playing
dreams. She has also produced two

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highly acclaimed documentaries, On
The Shoulders of Giants and Kareem,

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Minority of One. As Kareem's Business
Manager, she has helped him realize

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his dream of becoming a successful
writer of novels, history books,

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political commentary and screenplays.
She is currently writing a book

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herself about the challenges of
being a business manager called The

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Accidental Manager. Please join me in
welcoming Deborah. (Applause) On the

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legal side, we are really lucky to
have two distinguished experts in this

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area. We have Jennifer Rothman and
Priya Royal. Jennifer Rothman is a

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Professor of Law at Loyola Law School
in LA and she is an Elected Member of

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the American Law Institute and an
affiliated Fellow at Yale Law School's

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Information Society Project. She
is nationally recognized for her

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scholarship on intellectual property
and constitutional law and her website

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Rothman's Roadmap To The Right of
Publicity is the go-to place for right

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of publicity questions and news. Her
latest book, The Right of Publicity,

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Privacy Reimagined for the Public
World was published this year by

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Harvard University Press. She received
her AB from Princeton University and

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an MFA from the University of Southern
California School of Cinematic Arts.

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She also used to work in the film
industry before attending law school

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at UCLA where she graduated first in
her class. She clerked at the Ninth

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Circuit, was an entertainment and
intellectual property litigator at

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Irell and Manella and then she went on
to become a law professor. So please

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join me in welcoming Professor
Rothman. (Applause) And last but

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certainly not least, Priya Royal is
the Tax Law Editor in the Estate Gift

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and Trust Group at Bloomberg BNA. She
was formerly an estate tax attorney at

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the Internal Revenue Service where she
examined high and ultra-high net worth

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estates and also worked on training
course materials for incoming estate

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tax attorneys. She has a JD and an LLM
in taxation from Villanova University

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School of Law and she has been a
panelist on a number of webinars and

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seminars over the years, most recently
addressing the 2017 tax reform. She

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has also been in private practice
in trust and estates and tax law

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representing a variety of clients from
New York to DC for over a decade. In

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addition to tax law, she has also
represented clients on trademark and

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copyright issues, especially as
they relate to estate planning and

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valuation. She is admitted to practice
in five states. It's amazing. So

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without further ado, let's welcome
Priya. (Applause) I'm going to ask

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Professor Rothman to kick us off.
Thank you, all. >> JENNIFER ROTHMAN: I

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think I might be the shortest
person on this panel so excuse me for

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adjusting the mic. Thank you for that
introduction and for inviting me to

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share my expertise with you this
morning and to be part of this

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incredible event on trademark law,
which is near and dear to my heart.

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It's actually the first subject that
I taught when I first became a law

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professor. We have a short time
together for an enormously complex

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issue or set of issues and we're only
going to scratch the surface of them

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here today. My goal is to set the
stage for the discussion that follows

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and for Ms. Royal's comments, more
specifically about tax law and to

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provide some guidance for all of
you as attorneys, as managers and as

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agents and most importantly for the
very individuals whose identities may

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be at issue in these sorts of cases.
So I'm going to focus on two primary

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topics today. The first is the
overlapping set of legal entitlements

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that apply to the dead, which are
not just the right of publicity and in

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fact there's a lot of confusion
because they're often collapsed. The

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second topic I'm going to focus on
is more about the right of publicity

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which people know the least about and
talk about some of the challenges for

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having postmortem after death rights
in the identity of a deceased person

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and they vary quite widely from state
to state. So first as a preliminary

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matter, I want to consider the
question posed by the session itself,

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who owns you when you are dead? We're
not talking about dead bodies here.

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There's some very interesting cases
about who owns dead bodies, wonderful

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lawsuits, not the topic of today.
We're also not going to be talking

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about the tangible property of the
dead, things like cars, houses, boats,

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and memorabilia. We're not talking
about those. So we're going to focus

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on intangible property and what
happens to it after a person,

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particularly a famous person or
celebrity, dies. And so this is also

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sometimes called the intellectual
property and this includes a variety

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of rights I'll be talking about.
Sometimes the right of publicity is

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thought of as an intellectual property
right, though I think that's a

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mischaracterization of that interest.
So again our focus here is going to be

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on these intangible rights in a
deceased person and specifically in

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their name, likeness, voice and other
indicia of identity. This is not a

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single right at issue but a
multiplicity of rights that intersect

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and teasing them apart is crucial in
litigation, in estate planning, in

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dealing with the growing IRS efforts
to tax high value celebrity estates

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and also in the context of pre-death
or inter vivos, if you want to go all

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Latin on it; inter vivos transfers of
rights. So these we need to sort of

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tease these apart and that's the first
topic for today, these overlapping

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legal claims. I'll start with the
basic proposition, which is who owns

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you after you die has a lot to do with
who owns you while you're alive, so

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that should be the starting point for
any evaluation. And then you have to

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tease apart what are the legal claims
at stake in a particular estate? Those

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include copyrights, which as most
in this room know, protects original

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works of expression in a fixed form.
So if a person's image or voice is

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captured in a photograph, a movie, a
sound recording, those are sometimes

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thought of right of publicity related
as well but they're actually also

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covered by copyright law and so
copyright law is something that

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survives death. It lasts for 70 years
after the lifetime of the author. In

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the context of works for hire, which
will also frequently be involved in a

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high end estate, it lasts 95 years
after publication or 120 years from

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the time of creation; 95 years from
publication, 120 years from creation.

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So often the person whose voice or
image is captured in a copyrighted

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work is not the owner of the copyright
and that raises some complex issues

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related to whether the copyright
is going to overcome any right of

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publicity claim after death but
it also is sometimes true that the

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particular individual owns the right
to the copyright and can assert those

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rights or their estate can after
death. The second type of right we're

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dealing with are those of trademarks
and so when we're talking about

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someone who's famous, they may have
a number of trademarks that protect

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their likeness and name if they're
using it in conjunction with products

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or services including entertainment
services or writing services. And

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these can survive death as long as
the estate or businesses or licenses

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continue to sell products or services
using those same marks with the

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person's likeness, a particular
version of the likeness and the

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person's name or related names. And
trademarks can last forever so that's

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another consideration after death.
There's a third category of rights

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that are sometimes often forgotten in
this context which is there's a whole

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umbrella of unfair competition laws
including under the Federal Lanham Act

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and consumer protection laws varying
from state to state in which an estate

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can file false endorsement or false
advertising claims even after the

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death of a person because there might
be a suggestion of sponsorship or

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endorsement by the estate. And
finally, the claim that we're going to

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spend the rest of the time or most of
the time talking about is the right of

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publicity. The right of publicity is
often misunderstood as an intellectual

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property right akin to copyright law
that's separated from the right of

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privacy in the 1950s. These are all
myths about the right of publicity

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that I debunk in my latest book
that was mentioned on the right of

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publicity. And I also delve into some
more of the issues that I'm talking

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about today. So if you want to learn
more, that would be a place but those

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are some myths that I bust there. But
I want to make sure that we're all on

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a level playing field talking about
the right of publicity without reading

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the book in advance. Just broadly
speaking, the right of publicity is a

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state law. It varies widely from state
to state. It provides a right to stop

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others from using your name, likeness
and sometimes other indicia of one's

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identity without permission usually
for the defendant's advantage. Not

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always for a commercial advantage.
Some of you who have practiced in the

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area may think that it's limited to
commercial speech. It is not in most

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states and it's not even always
limited to for profit uses. So there

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are many variations from state to
state. For our purposes today, not

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every state has an independent right
of publicity separate from its right

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of privacy and not every state has a
postmortem right of publicity. Not

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every state has a right that survives
death so this varies also widely from

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state to state, which is one of the
reasons out of frustration I started

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this website in which you can click on
a state and find out what the laws are

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so I'll talk a little bit more about
this in a few minutes, but one of the

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things you have to tease out is there
even a postmortem right of publicity.

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So I said the first topic we're going
to talk about is overlapping rights so

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I want to use the Michael Jackson
estate litigation with the IRS to

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highlight these overlapping rights. So
this is the Schedule F forms submitted

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by the Jackson estate. Ms. Royal is
going to talk in more depth about some

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of the tax issues but I'm going to
sort of use this to highlight this

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overlapping issue. So when they filed
the form, they had a single item image

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and likeness. Image and likeness
valued at $2,000 of Michael Jackson,

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which is absurd. That was like waving
a red flag in front of the IRS, come

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and get us. The IRS said no, that's
over 400 million at least in Michael

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Jackson's name and likeness. We can
talk more about this later but what I

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want to highlight is that image and
likeness was collapsed into a single

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line rather than being teased out.
Image and likeness of Michael Jackson

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in copyrighted works, photographs,
music videos, etc. trademark rights.

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And then there's the separate question
of whether false endorsement, false

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advertising potential claims or
potential right of publicity claims

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should even be part of the property
of the estate. That is something that

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should be contested. The Jackson
estate failed to contest the inclusion

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of the right of publicity or false
endorsement or false advertising in

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the estate. So that is where this
Jackson litigation is going to set a

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precedent. The IRS is using it to be
more aggressive in taxing postmortem

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rights of publicity but I just want to
remind everyone no one challenged the

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inclusion of the right of publicity
in the estate. That's still something

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that can be challenged and litigated.
And I also want to highlight that they

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collapsed all of those different
property rights, which all should have

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been separated just in a single box of
image and likeness which has caused a

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great, having talked to some of those
involved in that litigation has caused

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a great deal of confusion by the judge
as well as the experts in trying to

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value this property. So I'm just
highlighting those things to show how

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they overlap and you need to
disaggregate them. And as we think

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about this though, I want to focus in
on the right of publicity because this

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is what people I think in the room
probably know the least about but I

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wanted to start by reminding you not
to forget about trademarks, copyrights

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and related estate claims. So one of
the biggest challenges however is just

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figuring out postmortem rights of
publicity and they don't exist in

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every state. I'm going to highlight
six challenges posed by a postmortem

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right of publicity, an after death
right in your name, likeness, voice or

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other indicia of identity. So first
there's just the variability of state

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laws. As I said, not every state even
has a postmortem right of publicity.

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Some only provide rights to the
living. Some have postmortem rights

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that only apply to soldiers. If
you want to know why, you can ask me

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later, but some limit it to soldiers.
Some limit it to personalities, people

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with commercially valuable identities
who have been selling products or

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investing a lot of time and money
in making themselves commercially

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valuable. Some let anyone have a
postmortem claim. Some limit claims to

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those who died domiciled in a
particular state. Some open their

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doors, like Washington State to
all-comers. There's a wide range of

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duration in the postmortem rights.
Some provide a ten year period, some

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25, some 30, some 40, some 70, some
forever. Some require registration,

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some don't. Some have specific
designated heirs to which it's

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limited, some don't. So as you can
see, one of the basic challenges is

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just figuring out what law would
apply to the particular person you're

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dealing with. This also raises
significant valuation questions for

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taxation purposes and otherwise. The
second challenge I want to highlight

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is the potential danger of forced
commercialization. So as the IRS

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becomes more aggressive in enforcing
a state tax inclusion of postmortem

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rights of publicity, there's a concern
that people who don't, the sort of

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survivors of a famous person who don't
want to commercialize their loved one

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will be forced to do so simply to pay
off the estate tax burden. Now Michael

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Jackson's estate is heavily
commercializing Michael Jackson's

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estate. They do so regardless of the
estate tax situation but that's not

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true for every person. Some people
don't want to be commercialized after

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death and their heirs don't want to
commercialize them either but because

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of the way the tax works, they will be
taxed as part of the estate tax if the

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right of publicity is included at
the rates highest and best value at a

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commercialized value even if that's
not what the person wants to do. This

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was very concerning to Robin Williams
who developed a very elaborate trust

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plan to try to avoid that outcome for
his family and so he vested his name

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and likeness rights and his right of
publicity in a nonprofit through the

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trust and barred the non-profit from
commercializing in any way his name,

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likeness, voice or identity for 25
years after death. Now I'll mention

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not only am I not giving you specific
legal advice but this trust has not

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been challenged yet so it's not clear
that it will be valid but it is sort

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of the primary example I know of
someone trying to deal with this

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potential forced commercialization
problem. And of course that forced

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commercialization problem could be
solved other ways through legal reform

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00:18:52,665 --> 00:18:56,969
or altering how the IRS is behaving
currently. And of course getting rid

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of the estate tax, which could
happen any day. All right so a third

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00:19:02,408 --> 00:19:06,779
potential problem is not having an
estate plan at all when you die in a

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state that has a postmortem right or
maybe that doesn't have one. I call

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this the Prince problem. So Prince is
a high value deceased celebrity who

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died without a will. He didn't think
he was going to die. He didn't make a

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plan. So there are several challenges
to this and I'll just highlight at the

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outset Minnesota doesn't have a
postmortem right of publicity. And

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there was a rush in the aftermath of
his death to try to get Minnesota to

250
00:19:32,972 --> 00:19:37,276
pass one and then when I and some
others highlighted the estate tax

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00:19:37,276 --> 00:19:40,646
problem and the danger of forced
commercialization and valuation, all

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of a sudden all the support for that
bill was removed and it was pulled

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from the Minnesota legislature because
of tax concerns in particular. But

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even putting those to the side,
there's the problem of whose going to

255
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inherit and who should get the value
of this money of our dead person. Now

256
00:19:58,798 --> 00:20:02,668
just again reminding of the
overlapping rights so this is not

257
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about copyrights or trademarks which
will vest in whoever the heirs were

258
00:20:06,439 --> 00:20:09,909
but specifically about the rights of
publicity and we want to provide this

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additional value and to whom. So
in this case, there were a lot of

260
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estranged sort of relatives of Prince
who now wind up owning him after

261
00:20:17,416 --> 00:20:20,820
death. It's not clear that's what
Prince would have liked at all as

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compared to his fans who are a big
supporter of in allowing them to

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00:20:25,224 --> 00:20:28,661
perhaps have in memorium posters and
other things to celebrate him. And

264
00:20:28,661 --> 00:20:32,364
there's also for a while a fight
by someone who is incarcerated and

265
00:20:32,364 --> 00:20:36,669
claimed to be a child of his claiming
that he should have rights, so we

266
00:20:36,669 --> 00:20:40,673
might want to think about that if we
tease apart postmortem rights or maybe

267
00:20:40,673 --> 00:20:44,977
what they want that we want them to
look like, who should get them and

268
00:20:44,977 --> 00:20:49,648
when and particularly if there's no
will involved. And this ties up with a

269
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fourth potential concern which is
the question of who profits from

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postmortem rights and potential abuse
particularly of the elderly. I don't

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know if some of you read the recent
New Yorker piece or saw John Oliver

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00:21:01,327 --> 00:21:05,631
talking about guardianship with the
elderly and some abuse in which older

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00:21:05,631 --> 00:21:08,734
people are sort of stripped of their
assets and lose control. This could

274
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happen to older celebrities as well
who may not have family watching out

275
00:21:12,705 --> 00:21:17,376
for them or even the family themselves
as we see in the instance of Stan Lee

276
00:21:17,376 --> 00:21:20,613
maybe taking advantage. And there
could be a transfer of postmortem

277
00:21:20,613 --> 00:21:24,717
rights of publicity while the person
is living and so this may shift wealth

278
00:21:24,717 --> 00:21:28,821
to a company for example that's wholly
unrelated at the expense of others and

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00:21:28,821 --> 00:21:33,225
they may do things that the person
might not like. I give an example in

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the book but also there's one I circle
here. Bettie Page who is one of the

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00:21:37,930 --> 00:21:42,034
top ten dead celebrities and she was
actually, you probably know a lot more

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00:21:42,034 --> 00:21:46,138
about her now that she's dead because
she's owned by CMG , a corporation

283
00:21:46,138 --> 00:21:50,943
that owns more dead people that anyone
else and they have turned her into big

284
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business. We might ask is that -- do
we want all that wealth shifted not to

285
00:21:55,748 --> 00:21:59,885
close heirs of a survivor but to just
an unrelated corporation that's making

286
00:21:59,885 --> 00:22:04,190
hundreds of millions of dollars off
dead people away from the public being

287
00:22:04,190 --> 00:22:08,594
able to comment on people. And I'll
also mention that Bettie Page who

288
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became very religious later in life
sort of rejected some of the more

289
00:22:12,965 --> 00:22:18,037
sexual imagery around her and yet this
company that owns her is now selling a

290
00:22:18,037 --> 00:22:22,741
sex toy line, the Bettie Page sex toy
line. It probably wouldn't have been

291
00:22:22,741 --> 00:22:27,913
something she would have chosen if
asked. And this sort of shift about

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00:22:27,913 --> 00:22:31,750
transferability leaves us to the last
two things that I'll just highlight.

293
00:22:31,750 --> 00:22:37,256
One is about transferability for
the living. So privacy rights don't

294
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transfer after death but if we make
the right of publicity transferable at

295
00:22:39,258 --> 00:22:41,260
death in most states that brings along
with it transferability during the

296
00:22:41,260 --> 00:22:43,262
lifetime which could lead to some
abuse of the least powerful. So if we

297
00:22:43,262 --> 00:22:45,264
think of aspiring actors, singers,
musicians, they may assign their

298
00:22:45,264 --> 00:22:46,632
rights forever in their name,
likeness, voice to managers, to

299
00:22:46,632 --> 00:22:48,634
agents, to reality shows. Parents
may assign forever the rights of their

300
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children and in the context for
example of student athletes a

301
00:22:49,969 --> 00:22:51,971
condition for playing in the NCAA is
to sign a very lengthy contract and

302
00:22:51,971 --> 00:22:53,973
also to get your scholarship money and
the NCAA claims to therefore own the

303
00:22:53,973 --> 00:22:55,975
student's rights of publicity forever.
The standard student athlete agreement

304
00:22:55,975 --> 00:22:57,977
according to the NCAA transferred to
an all-rights in perpetuity to the

305
00:22:57,977 --> 00:23:02,915
commercial use of student athletes
images including after they graduate.

306
00:23:31,410 --> 00:23:34,780
And we can play out the implications
of that but I don't have time now but

307
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I just want to flag that for you
as people call for more expansive

308
00:23:37,983 --> 00:23:41,754
postmortem rights. We should be
careful not to harm the living who may

309
00:23:41,754 --> 00:23:45,391
lose control over their own
identities. And if you think this only

310
00:23:45,391 --> 00:23:48,327
applies to celebrities you might want
to think about the terms of service on

311
00:23:48,327 --> 00:23:52,197
Facebook and what they could do to
your own rights and your name and

312
00:23:52,197 --> 00:23:56,035
likeness. And finally I'll just
leave us with some thoughts about some

313
00:23:56,035 --> 00:24:00,372
potential free speech issues and this
really affects valuation too because

314
00:24:00,372 --> 00:24:04,510
all of these rights are limited by
the First Amendment. And when we think

315
00:24:04,510 --> 00:24:07,212
about the breadth of some of these
rights from a legislative point of

316
00:24:07,212 --> 00:24:11,016
view we also need to take these under
consideration so I'll just highlight a

317
00:24:11,016 --> 00:24:16,655
few examples of this. Martin Luther
King Junior's estate has been very

318
00:24:16,655 --> 00:24:21,026
litigious over his name and likeness
rights. The bust in the center is

319
00:24:21,026 --> 00:24:25,698
something that the Martin Luther King
Junior estate sued over its sale in

320
00:24:25,698 --> 00:24:30,636
multiple copies and prevailed in
shutting that down so people could not

321
00:24:30,636 --> 00:24:34,306
buy these and have them in their homes
to honor Martin Luther King Junior. On

322
00:24:34,306 --> 00:24:38,310
the left is the memorial here to
Martin Luther King Junior and the

323
00:24:38,310 --> 00:24:41,013
federal government, I know there are a
lot of federal employees in the room,

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00:24:41,013 --> 00:24:43,782
I don't know if people know this, the
federal government paid $800,000 to

325
00:24:43,782 --> 00:24:50,122
the estate to get permission to make
that statue. I don't think they had to

326
00:24:50,122 --> 00:24:54,793
pay but that's the sort of thing
honoring someone. Elvis' estate also

327
00:24:54,793 --> 00:24:59,832
sued over an honoring statue in
Tennessee. On the right is a plaque

328
00:24:59,832 --> 00:25:04,670
that Rosa Parks’ estate sued over that
was sold by Target to celebrate civil

329
00:25:04,670 --> 00:25:10,242
rights. That lawsuit was ultimately
rejected for reasons that I don't have

330
00:25:10,242 --> 00:25:14,480
time to go into but these are sorts of
things that we might lose out on if we

331
00:25:14,480 --> 00:25:18,016
have an over-expansive postmortem
right but we also need to think about

332
00:25:18,016 --> 00:25:24,289
in terms of valuation as well as uses
in movies and books. And so I'm almost

333
00:25:24,289 --> 00:25:27,559
done and we'll turn things over
and I'll just to think about in the

334
00:25:27,559 --> 00:25:30,362
discussion why should we have
postmortem rights? We might want to

335
00:25:30,362 --> 00:25:33,165
think in particular about the
dignatory interest of the survivors.

336
00:25:33,165 --> 00:25:39,171
Obviously the deceased no longer have
a need to be paid and they may have

337
00:25:39,171 --> 00:25:44,777
dignity in a broad sense but in the
law we generally don't respect or make

338
00:25:44,777 --> 00:25:48,147
laws based on the dignity of people
who are no longer living. But also

339
00:25:48,147 --> 00:25:51,350
there's lots of ways in which other
laws, trademarks, copyrights, unfair

340
00:25:51,350 --> 00:25:56,822
competition might apply after death.
So I know others are going to talk

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00:25:56,822 --> 00:26:00,926
after me and Ms. Royal, I will turn
it over to you to talk in more depth

342
00:26:00,926 --> 00:26:05,931
about tax and I will try to get your
-- (Applause) >> PRIYA ROYAL: Good

343
00:26:20,512 --> 00:26:25,217
morning, everyone. So as you can guess
I'm a tax attorney. I read the code

344
00:26:25,217 --> 00:26:31,990
for fun. It's also the bedtime story
for my daughters, unfortunately. Just

345
00:26:31,990 --> 00:26:36,995
to get an idea of what sort of
audience I'm speaking to, how many of

346
00:26:36,995 --> 00:26:42,968
you are IP practitioners? Ah-hah. All
right. Any of you tax practitioners or

347
00:26:42,968 --> 00:26:47,573
have a tax background or a CPA by
any chance sitting here? Ah, so we're

348
00:26:47,573 --> 00:26:52,578
going to have fun. Okay. So Jennifer
did an excellent overview of the

349
00:26:54,746 --> 00:27:00,619
general issues that arise in estate
planning, estate administration. I'm a

350
00:27:00,619 --> 00:27:05,357
former IRS estate tax attorney. I did
planning. I continue to do planning

351
00:27:05,357 --> 00:27:11,396
which essentially means the things I
draft to protect my clients interests

352
00:27:11,396 --> 00:27:14,666
I basically look at them and say ah,
this is going to get picked up for

353
00:27:14,666 --> 00:27:20,239
audit and I can't do anything about it
but I can win. So that's sort of what

354
00:27:20,239 --> 00:27:23,876
I'm throwing out some terms that you
should consider when you speak to your

355
00:27:23,876 --> 00:27:28,914
clients, to your employer if you're in
corporate counsel for considerations

356
00:27:28,914 --> 00:27:34,887
on things that an estate planning
attorney should address. One of the

357
00:27:34,887 --> 00:27:39,124
reasons I'm excited that Mr. Jabbar is
part of our panel here is that he sort

358
00:27:39,124 --> 00:27:44,162
of represents the conglomerate of
issues and different types of IP

359
00:27:44,162 --> 00:27:49,067
rights that could be tax issues. It's
sort of what would be the value of him

360
00:27:49,067 --> 00:27:54,206
in his authorship rights versus his
basketball legend rights versus his

361
00:27:54,206 --> 00:27:58,844
speaker rights versus his journalism
reporter sort of editorial rights? I'm

362
00:27:58,844 --> 00:28:03,682
mean the list could go on and from an
IP standpoint what you would think is

363
00:28:03,682 --> 00:28:08,120
what you would tack on for a license
agreement is not necessarily what is

364
00:28:08,120 --> 00:28:11,156
going to be the case on a tax again
especially when you're dealing with

365
00:28:11,156 --> 00:28:16,461
postmortem rights. So the right of
publicity essentially in a nutshell is

366
00:28:16,461 --> 00:28:22,668
the commercial value of a person's
name, likeness or image. And where

367
00:28:22,668 --> 00:28:26,305
there's commercial value there's an
asset attached to it. Where there's an

368
00:28:26,305 --> 00:28:32,344
asset there's an estate. Where there's
an estate there's a tax. So anything

369
00:28:32,344 --> 00:28:37,482
that can be taxed will be taxed. I
always joke and say you always start

370
00:28:37,482 --> 00:28:41,820
with Section 61 of the Internal
Revenue Code which says all items are

371
00:28:41,820 --> 00:28:47,526
included in gross income unless
excluded otherwise which means never

372
00:28:47,526 --> 00:28:51,263
ask the question will this be taxed.
Always ask the question will this not

373
00:28:51,263 --> 00:28:56,268
be taxed and how do we make it that
way. The way you can sort of minimize

374
00:28:59,037 --> 00:29:03,575
the tax and not make it tax at a
certain time, or in a certain way, or

375
00:29:03,575 --> 00:29:08,013
in a certain amount is obviously to
transfer the right, which is why we're

376
00:29:08,013 --> 00:29:11,016
sort of touching on the transfer of
the right of publicity. The survival

377
00:29:11,016 --> 00:29:15,854
of the right of publicity. I know
Professor Rothman touched on state law

378
00:29:15,854 --> 00:29:19,691
which is sort of an evolving
landscape. Some states allow rights of

379
00:29:19,691 --> 00:29:23,629
publicity to survive, some don't.
There's case law that basically in New

380
00:29:23,629 --> 00:29:28,667
York there were no postmortem rights
of publicity which means it was free

381
00:29:28,667 --> 00:29:32,404
for all. The Marilyn Monroe estate
is actually one good example of that,

382
00:29:32,404 --> 00:29:37,009
which I'll get to in a second. One of
the things that most literature out

383
00:29:37,009 --> 00:29:40,479
there and most of the material
that's not touched on is actually dual

384
00:29:40,479 --> 00:29:45,484
citizenship and estate tax on the
right of publicity. Take for example,

385
00:29:48,520 --> 00:29:52,557
we're going to pretend to kill off
celebrities now. Charlize Theron from

386
00:29:52,557 --> 00:29:58,897
South Africa. She has dual citizenship
or dual residency. What laws apply?

387
00:29:58,897 --> 00:30:05,437
Right now, the WTO does not govern the
right of publicity. They do not manage

388
00:30:05,437 --> 00:30:11,209
it. They do not limit it. They do
not define it so how do you define it?

389
00:30:11,209 --> 00:30:14,012
What is the value? She may have
international acclaim. She may have

390
00:30:14,012 --> 00:30:17,716
publicity rights. She may -- Aeon Flux
for anybody who watched it that could

391
00:30:17,716 --> 00:30:22,721
be her image. That could be used in
various things. So that is in terms of

392
00:30:25,190 --> 00:30:29,027
evolving landscape let's just say
there is a lot of work and possibly a

393
00:30:29,027 --> 00:30:34,533
lot of employment opportunities at
the IRS for estate tax attorneys if

394
00:30:34,533 --> 00:30:37,469
somebody wants to get into the minutia
of this. And for estate planning

395
00:30:37,469 --> 00:30:40,405
attorneys this is a great area
especially if you have an IP

396
00:30:40,405 --> 00:30:45,644
background or you have dealt with IP
in specifically trademarks, copyrights

397
00:30:45,644 --> 00:30:50,949
and sometimes patent ideas, the broad
concepts coming to define this right

398
00:30:50,949 --> 00:30:56,955
of publicity. So these are sort of
like touch point examples of how the

399
00:30:56,955 --> 00:31:01,126
law is progressing the tax arena.
Right of publicity as Professor

400
00:31:01,126 --> 00:31:03,929
Rothman could probably tell you has
been around for a very, very long

401
00:31:03,929 --> 00:31:09,601
time; several decades. The tax issues
in the line of publicity as of today

402
00:31:09,601 --> 00:31:14,406
we actually have no idea how they're
going to get taxed. Well we have no

403
00:31:14,406 --> 00:31:19,244
idea to the extent I could disclose
how they're going to get taxed. So the

404
00:31:22,380 --> 00:31:26,318
tax history is we sort of look at
the estate of Marilyn Monroe as

405
00:31:26,318 --> 00:31:31,022
establishing right of publicity for
tax purposes because it was an issue

406
00:31:31,022 --> 00:31:34,559
of domicile which sort of goes back to
the dual citizenship idea of taking it

407
00:31:34,559 --> 00:31:38,463
beyond states to other countries
because we live in a global digital

408
00:31:38,463 --> 00:31:43,468
age. And so in the estate of Marilyn
Monroe, she passed away in 1962.

409
00:31:47,539 --> 00:31:53,145
Essentially her heirs 50 years later
wanted to tack on a right of publicity

410
00:31:53,145 --> 00:31:57,616
to the things that were being
used, her image, her likeness in 2012

411
00:31:57,616 --> 00:32:03,555
because they thought it a commercial
value. And if you think about it from

412
00:32:03,555 --> 00:32:06,725
the IRS perspective, this is exactly
what they're taxing. If you think it's

413
00:32:06,725 --> 00:32:10,462
unfair that they tax somebody's image
and likeness somebody is making money

414
00:32:10,462 --> 00:32:14,699
on this so why shouldn't there be a
tax. That's one perspective. On the

415
00:32:14,699 --> 00:32:19,337
other hand, you are who you are. How
dare you tax me as a person, right. So

416
00:32:19,337 --> 00:32:26,311
in that case it was basically judicial
estoppel was what kicked in. For tax

417
00:32:26,311 --> 00:32:31,316
purposes New York had more favorable
tax law that said protection laws at

418
00:32:33,852 --> 00:32:37,622
the time she passed away in 2012, they
wanted to switch that because they

419
00:32:37,622 --> 00:32:40,625
wanted the protection of the
California laws. The courts said you

420
00:32:40,625 --> 00:32:44,462
don't get to eat your cake and have
it too. I mean you just can't have it

421
00:32:44,462 --> 00:32:48,733
both ways. And then I call it the
escalation point. Estate of Whitney

422
00:32:48,733 --> 00:32:51,736
Houston which would be a mystery to
most people out there because the IRS

423
00:32:51,736 --> 00:32:56,741
settled with the estate of
Whitney Houston. She on paper died

424
00:32:58,877 --> 00:33:03,582
impoverished. She owed I believe four
million and her state was only three

425
00:33:03,582 --> 00:33:08,353
million. At the end of the day they
agreed on a two million dollar value.

426
00:33:08,353 --> 00:33:13,925
And the way this works is the estate
gets audited. Everything in the estate

427
00:33:13,925 --> 00:33:18,897
is everything that the taxpayer had
full dominion and control over at the

428
00:33:18,897 --> 00:33:23,902
time of death. Standard valuation is
date of death. There are no statutes,

429
00:33:26,705 --> 00:33:32,677
regulations or internal revenue manual
guidelines as far as I know which

430
00:33:32,677 --> 00:33:36,648
dictate that the time of death is to
the precise second and not the second

431
00:33:36,648 --> 00:33:42,087
after. And the reason this is
important is because if you take a

432
00:33:42,087 --> 00:33:47,826
celebrity or any sort of -- okay,
Mr. Jabbar actually would be a good

433
00:33:47,826 --> 00:33:51,329
example. I'm sorry Mr. Jabbar but
we're talking about estates so I don't

434
00:33:51,329 --> 00:33:57,369
mean to talk about the very future.
You have sort of established yourself

435
00:33:57,369 --> 00:34:02,474
as this person who is for social
justice as an author predominantly and

436
00:34:02,474 --> 00:34:07,412
moved away from your role and your
emblem as a basketball legend. I mean

437
00:34:07,412 --> 00:34:13,351
that is sort of the first part of
your career. After you pass away, the

438
00:34:13,351 --> 00:34:16,788
basketball legend aspect of it is
going to get commercialized. That is a

439
00:34:16,788 --> 00:34:21,793
given. But does the value of your
persona as a basketball legend now

440
00:34:25,196 --> 00:34:28,967
carry a greater value because one
second after you passed away you are

441
00:34:28,967 --> 00:34:33,371
now worth more on that piece than as
an author because it is very likely

442
00:34:33,371 --> 00:34:37,609
that the commercial value of your
profile as an author is less than the

443
00:34:37,609 --> 00:34:43,581
commercial value of your basketball
history. So this becomes an issue for

444
00:34:43,581 --> 00:34:49,387
valuation purposes because tax is
taxed at 40% of the asset in the

445
00:34:49,387 --> 00:34:55,660
estate so what are you putting in that
estate? So then the estate of Michael

446
00:34:55,660 --> 00:35:01,299
Jackson, the very famous case where
the estate reported a $2500 value. The

447
00:35:01,299 --> 00:35:07,505
IRS said it's 500 million. It is, as
an estate planning attorney, it is not

448
00:35:07,505 --> 00:35:14,279
a red flag, the estate of Michael
Jackson is the red flag so there are

449
00:35:14,279 --> 00:35:19,284
several estates of extremely huge
public figures that have been put at

450
00:35:21,519 --> 00:35:24,155
thousands of dollars, hundreds of
thousands of dollars and they bill

451
00:35:24,155 --> 00:35:27,892
billionaires and the reason is estate
planning. With Michael Jackson, he did

452
00:35:27,892 --> 00:35:31,229
not actually die with $2,000. He had
excellent estate planning attorneys

453
00:35:31,229 --> 00:35:34,466
who literally pulled one billion
dollars of his assets out of his

454
00:35:34,466 --> 00:35:39,471
control on paper. He died wealthy. The
IRS was I'm sure not too happy about

455
00:35:43,842 --> 00:35:47,112
that and they wanted to find some
way to get a piece of it so they found

456
00:35:47,112 --> 00:35:50,315
something else and said your right
of publicity is worth 500 million

457
00:35:50,315 --> 00:35:56,588
dollars. But there was an issue about
whether he would have any value in his

458
00:35:56,588 --> 00:36:02,060
persona because there were various
contentions. He was sort of not in the

459
00:36:02,060 --> 00:36:07,098
greatest view publicly at the
time he died. The IRS will take the

460
00:36:07,098 --> 00:36:13,605
perspective that allocates a discount
to his value, not eliminate it because

461
00:36:13,605 --> 00:36:18,543
there is a risk of litigation that
proves that his value was less than

462
00:36:18,543 --> 00:36:23,681
what they deem it to be or and it's
going back to the time of death there

463
00:36:23,681 --> 00:36:28,386
is one case involving [indiscernible
00:36:20] restriction rights which

464
00:36:28,386 --> 00:36:34,826
literally went into the time of death.
It is a corporate business asset case

465
00:36:34,826 --> 00:36:40,365
and that may get pulled by a brilliant
estate tax attorney into a situation

466
00:36:40,365 --> 00:36:44,002
like this but it is a very hard
argument because no statutes, no

467
00:36:44,002 --> 00:36:48,473
regulations, date of death is just
valuation. So on the date of death, at

468
00:36:48,473 --> 00:36:52,577
the time he died, the IRS said he
was worth 500 million dollars. We are

469
00:36:52,577 --> 00:36:54,712
looking to see what is going to come
out of this case because this is sort

470
00:36:54,712 --> 00:36:58,416
of what you didn't see is Professor
Rothman put out the Schedule F of

471
00:36:58,416 --> 00:37:04,589
866-A, which is a form that the IRS
uses to make assessments. That is not

472
00:37:04,589 --> 00:37:08,560
the estate tax return. The estate
tax return for the estate of Michael

473
00:37:08,560 --> 00:37:14,499
Jackson my guess would be was probably
somewhere between seven to 20 boxes

474
00:37:14,499 --> 00:37:18,403
because they contain valuations with
details in them. That is required. It

475
00:37:18,403 --> 00:37:22,440
is not a complete 706 without
valuation. So those questions we're

476
00:37:22,440 --> 00:37:24,976
waiting to get answered and will
probably be answered in the court

477
00:37:24,976 --> 00:37:28,379
dicta and if they were in there they
were probably present at trial and

478
00:37:28,379 --> 00:37:31,916
they will show up in the court
dicta. I mean it's there somewhere and

479
00:37:31,916 --> 00:37:36,654
they're basically putting valuation
experts against valuation experts.

480
00:37:36,654 --> 00:37:41,493
What is the value and how much time
does the IRS really want to spend on

481
00:37:41,493 --> 00:37:47,198
this? That's what it comes down to.
The future estate of Prince, the man

482
00:37:47,198 --> 00:37:52,203
died without a will. Big mistake. Not
selling services but big mistake. Not

483
00:37:54,639 --> 00:37:59,210
only were his regular assets not
protected. His right of publicity, the

484
00:37:59,210 --> 00:38:04,883
value is unknown. The uphill
battle in an estate tax audit which is

485
00:38:04,883 --> 00:38:08,319
guaranteed essentially I would say
for all intents and purposes it'll

486
00:38:08,319 --> 00:38:15,293
probably pass several hundreds of
thousands of dollars in legal fees.

487
00:38:15,293 --> 00:38:20,298
That is a cost of not doing a five
figure estate plan because you're

488
00:38:22,433 --> 00:38:26,304
going to go through -- and the estate
tax statutory period is three years.

489
00:38:26,304 --> 00:38:29,541
Or if you take a situation like the
Michael Jackson estate where they

490
00:38:29,541 --> 00:38:33,311
reported the value of the right of
publicity at 2,000 there is a clause

491
00:38:33,311 --> 00:38:38,883
in the statute at the REGS for gross
undervaluation which essentially means

492
00:38:38,883 --> 00:38:43,288
that the asset wasn't reported or if
it wasn't reported specifically enough

493
00:38:43,288 --> 00:38:50,161
as instructions require the estate
remains open indefinitely. So this is

494
00:38:50,161 --> 00:38:56,334
why expert, seasoned estate
tax attorneys who understand the

495
00:38:56,334 --> 00:38:59,637
implications, who understand
celebrities, who understand public

496
00:38:59,637 --> 00:39:03,241
figures, who understand what IP means,
what the right of publicity means is

497
00:39:03,241 --> 00:39:07,111
crucial and they have to be consulted.
The first time you as an IP attorney

498
00:39:07,111 --> 00:39:11,950
draft a licensing agreement where
you're giving a company name rights to

499
00:39:11,950 --> 00:39:17,522
one of your clients, you should be
talking to a tax attorney because

500
00:39:17,522 --> 00:39:22,093
maybe that name right shouldn't be
going as a direct person to the entity

501
00:39:22,093 --> 00:39:25,763
or that person. Maybe it should be
sheltered through a trust. Maybe it

502
00:39:25,763 --> 00:39:29,868
should be sheltered through business
entity because we can split rights. We

503
00:39:29,868 --> 00:39:35,173
can create remainder interests. We
can create income interest so that the

504
00:39:35,173 --> 00:39:39,978
person who owns these rights can have
control over them while they're alive

505
00:39:39,978 --> 00:39:44,682
but still not have value in them
when they die. These are complicated,

506
00:39:44,682 --> 00:39:49,687
extremely, I would say intense very
multi-layered sort of planning and the

507
00:39:54,993 --> 00:39:59,697
nebulous part is we don't know if
these are going to be blessed by the

508
00:39:59,697 --> 00:40:04,702
IRS but we have an argument and at the
end of the day when you create a trust

509
00:40:07,805 --> 00:40:11,943
and you put it in there and you
create remainder interest, you have an

510
00:40:11,943 --> 00:40:15,213
argument where you can at least
negotiate it. And negotiating means

511
00:40:15,213 --> 00:40:20,018
maybe you can get less than 50% of
what the IRS claims the value is. If

512
00:40:20,018 --> 00:40:23,721
you have nothing, what is your
argument? You never took anything out

513
00:40:23,721 --> 00:40:30,328
of the estate. So with the IRS most
people don't know this, estate and

514
00:40:30,328 --> 00:40:35,300
gift tax audits there are about a
little over 250 attorneys in the

515
00:40:35,300 --> 00:40:39,971
country who work for the IRS as estate
tax attorneys. They have fun going out

516
00:40:39,971 --> 00:40:45,376
to the middle of the country to look
at every single estate and gift tax

517
00:40:45,376 --> 00:40:51,883
return that has ever been filed. There
is no return that does not task the

518
00:40:51,883 --> 00:40:57,221
purview of an attorney. You will only
hear about it when it is selected for

519
00:40:57,221 --> 00:41:03,661
audit. So if you think that putting
your client’s right of publicity at

520
00:41:03,661 --> 00:41:10,368
100 million dollars is going to escape
audit, be advised. That is not the

521
00:41:10,368 --> 00:41:15,373
case because you have a potential for
dispute on a valuation issue that is

522
00:41:17,709 --> 00:41:22,146
most likely going to go for a full
audited exam. But you can cut that

523
00:41:22,146 --> 00:41:27,952
time when you have reliable valuation
reports in the record, great experts

524
00:41:27,952 --> 00:41:32,390
who are collaborating with you, a team
of tax attorneys, CPAs, IP attorneys

525
00:41:32,390 --> 00:41:38,029
who can go into every aspect of this
basically off the top of their head

526
00:41:38,029 --> 00:41:41,766
and that will cut down the cost of
examination from hundreds of thousands

527
00:41:41,766 --> 00:41:46,404
of dollars significantly. Any client
out there is going to enjoy having to

528
00:41:46,404 --> 00:41:49,674
not have legal fees after they pass
away so their beneficiaries get even

529
00:41:49,674 --> 00:41:54,445
less. Theoretically, it's a deduction
of the estate tax return for the legal

530
00:41:54,445 --> 00:41:59,450
fees but remember at a 40% tax, you
still lose 60%. NACVA is the National

531
00:42:04,655 --> 00:42:08,860
Association of Certified Valuation
Analysts. They have developed specific

532
00:42:08,860 --> 00:42:13,398
business valuation methodologies.
They're highly respected by the IRS.

533
00:42:13,398 --> 00:42:18,469
If a valuation analyst, business
valuation IP analyst, anybody has an

534
00:42:18,469 --> 00:42:22,540
NACVA certification, they know the
standards to follow. They know the

535
00:42:22,540 --> 00:42:27,278
order to put it in. They know the
format. They know that they need to

536
00:42:27,278 --> 00:42:31,349
address all three approaches to
valuation, which I will touch on, and

537
00:42:31,349 --> 00:42:35,920
if those things are missing it becomes
an insufficient valuation report which

538
00:42:35,920 --> 00:42:40,358
is more easily challenged. So I
recommend looking for some sort of

539
00:42:40,358 --> 00:42:45,763
certification and background for these
valuation analysts and most attorneys

540
00:42:45,763 --> 00:42:50,234
-- I went through -- so while at the
IRS we were put through the training

541
00:42:50,234 --> 00:42:57,108
for NACVA certification so I can
actually do strategic valuation. The

542
00:42:57,108 --> 00:43:01,412
slides here you're going to get a copy
of it so it looks like we are running

543
00:43:01,412 --> 00:43:05,917
out of time quickly so I just want to
sort of touch on these points so that

544
00:43:05,917 --> 00:43:09,287
you can always follow-up with me with
questions and I can go through them.

545
00:43:09,287 --> 00:43:12,790
Essentially about appeals process,
there's a higher chance of negotiating

546
00:43:12,790 --> 00:43:16,127
at the appeals process and the
tax code is your decision maker

547
00:43:16,127 --> 00:43:20,531
eventually. I mean it's -- and then
the costs we just touched on. We can

548
00:43:20,531 --> 00:43:25,903
go back to what Professor Rothman
said concerning this. Discounting is

549
00:43:25,903 --> 00:43:31,843
something I touched on again. Risk is
discounting on the reverse side. If

550
00:43:31,843 --> 00:43:37,215
somebody is worth the value of their
-- because they did good protecting of

551
00:43:37,215 --> 00:43:42,220
their public rights, the IRS has the
ability to tack on a premium so it

552
00:43:42,220 --> 00:43:45,456
goes both ways. You can actually
be more than what you thought your

553
00:43:45,456 --> 00:43:49,694
licensing rights were for your client.
Income costs and market approaches,

554
00:43:49,694 --> 00:43:55,533
the three approaches, the most widely
used. This evolving field is actually

555
00:43:55,533 --> 00:44:00,972
a combination of the income and
the market approach, which basically

556
00:44:00,972 --> 00:44:06,110
factors in future streams of income
and comparables although I don't know

557
00:44:06,110 --> 00:44:12,884
who you would use as a comparable for
say Mr. Jabbar because he is sort of a

558
00:44:12,884 --> 00:44:16,487
unique case, which goes back to
valuation of unique art and other

559
00:44:16,487 --> 00:44:19,991
nebulous items. The IRS has experts
for everything you can imagine. There

560
00:44:19,991 --> 00:44:25,396
have been valuations of show dogs so
there is nothing that they do not have

561
00:44:25,396 --> 00:44:30,635
the resources for. And this is again
splitting the right of valuation. I

562
00:44:30,635 --> 00:44:35,673
spoke about trusts, moving it. There
are a couple cases, the Trump Act

563
00:44:35,673 --> 00:44:39,143
conundrum is at what point does free
speech end and what point does his

564
00:44:39,143 --> 00:44:43,781
rights as a celebrity which has value
which includes the estate tack on.

565
00:44:43,781 --> 00:44:48,152
That's interesting. I'll probably have
a couple articles on that upcoming so

566
00:44:48,152 --> 00:44:53,424
you can view more on that. It's
obviously more -- restricted transfers

567
00:44:53,424 --> 00:44:57,328
again IP attorneys you're familiar
with that. It is very similar to the

568
00:44:57,328 --> 00:45:00,998
business idea of licensing. I'm
speeding through this because I just

569
00:45:00,998 --> 00:45:05,036
got a note that there is probably
less than one minute at this point.

570
00:45:05,036 --> 00:45:08,339
Charitable options. There's a
deduction of the estate tax return for

571
00:45:08,339 --> 00:45:13,444
the charity. The role of the estate
planner flips. The estate planner

572
00:45:13,444 --> 00:45:16,314
wants to create the highest value
for the right of publicity when you're

573
00:45:16,314 --> 00:45:19,417
putting it into a charity because
that's the highest deduction. It also

574
00:45:19,417 --> 00:45:22,720
increases the basis of the properties
when it transfers because when you

575
00:45:22,720 --> 00:45:25,556
transfer it in a [indiscernible
00:45:19] where remainder interest may

576
00:45:25,556 --> 00:45:31,262
go to noncharitable beneficiaries you
have increased basis in some assets so

577
00:45:31,262 --> 00:45:36,934
capital gains are lower. And I said
this is sort of I'm sure goes over the

578
00:45:36,934 --> 00:45:40,104
head of most people who have
absolutely no interest in tax law

579
00:45:40,104 --> 00:45:44,742
because boring numbers in the Internal
Revenue Code but these are things that

580
00:45:44,742 --> 00:45:50,781
you can mention to clients, to your
employer, to your companies and it

581
00:45:50,781 --> 00:45:53,818
sort of gives them an idea there are
other things beyond the scope of just

582
00:45:53,818 --> 00:45:58,522
licensing rights, what happens today,
royalties and things of that nature. I

583
00:45:58,522 --> 00:46:04,495
can go through those. As I said, you
can follow-up with questions. And here

584
00:46:04,495 --> 00:46:09,433
are some references for a general
review and an article one of my

585
00:46:09,433 --> 00:46:16,240
colleagues published. But and if
we have any time, would we have any

586
00:46:16,240 --> 00:46:19,243
questions or comments from anybody
else in -- (Overlapping) >> FEMALE

587
00:46:19,243 --> 00:46:21,245
SPEAKER: I think the list of resources
will be handed out at the end for

588
00:46:21,245 --> 00:46:23,247
people. I know that we started a
little late but I think we can get

589
00:46:23,247 --> 00:46:25,249
sort of conversation -- [Indiscernible
00:46:27] >> PRIYA ROYAL: Questions or

590
00:46:25,249 --> 00:46:27,251
comments. Okay. Sure. Do you want to
come up here? Do you want to go back

591
00:46:27,251 --> 00:46:29,253
and forth Jennifer? >> AUDIENCE: I can
just use this. >> PRIYA ROYAL: Okay,

592
00:46:29,253 --> 00:46:31,255
great. >> KAREEM ABDUL JABBAR: Good
morning, everyone. My question is how

593
00:46:31,255 --> 00:46:33,257
does someone with some level of
fame know that they need to do estate

594
00:46:33,257 --> 00:46:35,259
planning around their right of
publicity? I'm 71 years old and now

595
00:46:35,259 --> 00:46:41,432
trying to deal with this type
of planning for my family and my

596
00:46:41,432 --> 00:46:48,272
survivors and I'm just learning about
it. So how do we figure out who to go

597
00:46:48,272 --> 00:46:51,409
to and what questions to ask? >> PRIYA
ROYAL: We are sort of in the session

598
00:46:51,409 --> 00:46:55,479
of what should your lawyer know to
be a good lawyer. I think the ethics

599
00:46:55,479 --> 00:47:02,053
battle is going to address this
whether it would be an ethics issue if

600
00:47:02,053 --> 00:47:05,523
you don't know, if you don't advise
your client about things they should

601
00:47:05,523 --> 00:47:08,359
be considering that are not
necessarily specifically within the

602
00:47:08,359 --> 00:47:12,930
scope of the engagement. And they are
-- a good business manager should be

603
00:47:12,930 --> 00:47:17,601
aware that these issues exist so
that they can vet the attorney because

604
00:47:17,601 --> 00:47:20,805
invariably for famous people the
business manager essentially manages

605
00:47:20,805 --> 00:47:25,843
who is hired, who is not hired, and
understanding these issues at least on

606
00:47:25,843 --> 00:47:32,483
a very broad level is critical to
that. So I would say get good people

607
00:47:32,483 --> 00:47:39,156
so they know what they should know.
And it never hurts to sort of keep

608
00:47:39,156 --> 00:47:43,094
abreast of what is happening in
the news because like the estate of

609
00:47:43,094 --> 00:47:47,264
Michael Jackson is in the news and you
sort of say what is this? Does this

610
00:47:47,264 --> 00:47:51,802
apply to me? Always ask is this my
issue? >> JENNIFER ROTHMAN: I think

611
00:47:51,802 --> 00:47:54,739
people need to start, it's not about
age. You mentioned your age but I

612
00:47:54,739 --> 00:47:59,744
think anyone who has a high commercial
value, identity, needs to make a plan

613
00:48:01,779 --> 00:48:05,816
because no one knows when they're
going to die so it doesn't really

614
00:48:05,816 --> 00:48:11,689
matter how old you are. It matters if
you have a large enough value estate

615
00:48:11,689 --> 00:48:14,592
that you need to make a plan. >>
PRIYA ROYAL: Let me add that everybody

616
00:48:14,592 --> 00:48:17,695
should have a basic estate plan. As
soon as you have let's say reality

617
00:48:17,695 --> 00:48:21,699
show star walk into your room and say
I want to be in this project or I'm

618
00:48:21,699 --> 00:48:25,936
going to get paid $500 for six
episodes you need to tell them we need

619
00:48:25,936 --> 00:48:30,708
to start thinking about where we're
going to put those $500 because it is

620
00:48:30,708 --> 00:48:35,813
likely that tomorrow that $500 may be
500 million dollars. So you have to

621
00:48:35,813 --> 00:48:39,083
start at the very basic level and you
build on estate planning. You start

622
00:48:39,083 --> 00:48:42,853
low so your fees are low and then
you keep building more and more trust

623
00:48:42,853 --> 00:48:46,624
instruments. It's a life-long process.
>> DEBORAH MORALES: Now I'm Kareem's

624
00:48:46,624 --> 00:48:51,962
business manager and I've been doing
this for about 15 years as his manager

625
00:48:51,962 --> 00:48:57,468
and I consider myself one of more
the savvy managers out there. I'm very

626
00:48:57,468 --> 00:49:01,839
aware of issues but I didn't know
about this until just a few months ago

627
00:49:01,839 --> 00:49:06,243
and we have lots of famous friends and
we've been talking to all of them and

628
00:49:06,243 --> 00:49:10,648
they don't know about it. It seems
that they think this Michael Jackson

629
00:49:10,648 --> 00:49:17,555
case is an anomaly. So while I'm not a
lawyer, what is my responsibility to

630
00:49:17,555 --> 00:49:23,294
inform my client of these types
of issues? >> PRIYA ROYAL: From my

631
00:49:23,294 --> 00:49:26,297
perspective as a business manager,
you are competing with other business

632
00:49:26,297 --> 00:49:30,768
managers and your duty is to enable
your client to be completely aware and

633
00:49:30,768 --> 00:49:36,540
protected entirely so it is a
responsibility. You should be aware of

634
00:49:36,540 --> 00:49:41,045
what legal issues may arise and
essentially you need the information

635
00:49:41,045 --> 00:49:46,050
to vet a tax attorney and an IP
attorney. You need to know so how much

636
00:49:48,285 --> 00:49:51,188
is my client's right of publicity
worth and they sort of give you this

637
00:49:51,188 --> 00:49:55,993
glazed look, we have a problem. >>
JENNIFER ROTHMAN: I think there are

638
00:49:55,993 --> 00:50:02,199
different issues. One is a legal issue
which is do business managers have a

639
00:50:02,199 --> 00:50:06,670
legal liability to know about the
right of publicity? I'm going to put

640
00:50:06,670 --> 00:50:13,177
that to the side. But there's another
issue which is should a business

641
00:50:13,177 --> 00:50:16,413
manager know about the right of
publicity and the issues related to

642
00:50:16,413 --> 00:50:19,917
it? Absolutely. I mean I think that's
important but it's not just about the

643
00:50:19,917 --> 00:50:23,587
managers. The people who most need
to know about this are the actual

644
00:50:23,587 --> 00:50:29,593
individuals and not just the wealthy
and famous but everyone because I

645
00:50:29,593 --> 00:50:33,664
don't know if people know this
but some of the strategies that Ms.

646
00:50:33,664 --> 00:50:38,335
Morales suggested and that people with
high value estates are enacting are

647
00:50:38,335 --> 00:50:44,174
potentially jeopardizing those who
have less valuable estates as well as

648
00:50:44,174 --> 00:50:48,846
the living. So for example, in New
York there was a recent push to pass a

649
00:50:48,846 --> 00:50:52,583
postmortem right of publicity and
there's a very small subsection of

650
00:50:52,583 --> 00:50:55,953
individuals across the country for
whom a postmortem right of publicity

651
00:50:55,953 --> 00:50:59,857
matters, that the IRS will care about,
that will transfer. But by setting it

652
00:50:59,857 --> 00:51:03,961
up in a certain way, what it's
going to do is that the sort of less

653
00:51:03,961 --> 00:51:10,901
powerful athletes and individuals will
be harmed by some of the transfers and

654
00:51:10,901 --> 00:51:15,039
there won't be protection. So I just
want to make sure that people see the

655
00:51:15,039 --> 00:51:20,311
sort of bigger picture but I think
business managers absolutely know as

656
00:51:20,311 --> 00:51:25,582
well as the individuals involved about
the right of publicity and associated

657
00:51:25,582 --> 00:51:29,186
rights. >> KAREEM ABDUL JABBAR: Are
the right of publicity laws protected

658
00:51:29,186 --> 00:51:34,191
differently by each state and how does
that affect people that might have

659
00:51:38,128 --> 00:51:43,000
roots in various states or homes?
How is that determined? >> JENNIFER

660
00:51:43,000 --> 00:51:45,202
ROTHMAN: I'll take the first part
and then maybe you can take the second

661
00:51:45,202 --> 00:51:50,207
part of that. So the states vary
widely so only about half of the

662
00:51:53,911 --> 00:51:59,817
states provide any postmortem right of
publicity so the other half don't have

663
00:51:59,817 --> 00:52:03,921
it or we don't know whether they have
it or not. And of those as I mentioned

664
00:52:03,921 --> 00:52:05,990
initially -- >> DEBORAH MORALES:
Sorry, when you say that some of them

665
00:52:05,990 --> 00:52:10,928
supply it and some of them don't, does
that mean that if there's no right of

666
00:52:10,928 --> 00:52:15,132
publicity in the state then there's
no estate tax or is that still -- ? >>

667
00:52:15,132 --> 00:52:18,602
JENNIFER ROTHMAN: Ah, see that's the
second part of the question and so

668
00:52:18,602 --> 00:52:23,007
this is not a simple answer because
the IRS doesn't know and as you

669
00:52:23,007 --> 00:52:25,709
probably realized from this
conversation they want to try to get

670
00:52:25,709 --> 00:52:32,449
the most tax. They're going to value
it at a very high rate so they're

671
00:52:32,449 --> 00:52:36,620
going to say well we don't know that
there's a postmortem right in your

672
00:52:36,620 --> 00:52:40,224
state but since we don't know, let's
presume there is and let's presume

673
00:52:40,224 --> 00:52:44,828
that it looks like this other state's
right of publicity and then we'll

674
00:52:44,828 --> 00:52:48,732
value it as if it's fully
commercialized and there's never a

675
00:52:48,732 --> 00:52:52,636
First Amendment defense and never a
copyright preemption defense and you

676
00:52:52,636 --> 00:52:56,740
get all the money all the time and
that's what we're going to tax you on.

677
00:52:56,740 --> 00:53:02,579
So that's the IRS version. As a matter
of state law, that's not right and so

678
00:53:02,579 --> 00:53:07,017
it's hard to know exactly how but that
is an area of litigation that will

679
00:53:07,017 --> 00:53:10,454
eventually be sorted out. People are
going to challenge hey look, I died in

680
00:53:10,454 --> 00:53:14,625
a state that doesn't -- or the estate
will say I died in a state, there's no

681
00:53:14,625 --> 00:53:17,828
postmortem right of publicity. I
died in New York. I died in Minnesota.

682
00:53:17,828 --> 00:53:21,265
There's no postmortem right of
publicity so you shouldn't value it.

683
00:53:21,265 --> 00:53:23,967
>> DEBORH MORALES: Dr. Rothman, if
you die in New York and you're Marilyn

684
00:53:23,967 --> 00:53:28,205
Monroe and your estate is being
monetized by a company like CMG and

685
00:53:28,205 --> 00:53:32,176
the family is not getting the money
because they died in a state where

686
00:53:32,176 --> 00:53:35,045
their right of publicity is not
protected? >> JENNIFER ROTHMAN: So

687
00:53:35,045 --> 00:53:40,117
it's more complicated than that. So
Marilyn -- let me just answer that

688
00:53:40,117 --> 00:53:43,654
part and then I'll tag Dan. So Marilyn
Monroe is complicated because Marilyn

689
00:53:43,654 --> 00:53:47,024
Monroe tried to avoid paying
California taxes, her estate, and by

690
00:53:47,024 --> 00:53:52,229
doing so they said oh no, she was a
resident of New York when she died so

691
00:53:52,229 --> 00:53:56,533
we don't have to pay those taxes in
California which are higher than those

692
00:53:56,533 --> 00:54:00,170
in New York. Then later when her
estate wanted postmortem rights they

693
00:54:00,170 --> 00:54:04,041
said oh no she died in California
because we have those postmortem

694
00:54:04,041 --> 00:54:09,613
rights and of course you can't change
where she died. She's dead. You picked

695
00:54:09,613 --> 00:54:14,618
one. You're stuck with it. So that's a
slightly different issue and so I want

696
00:54:41,178 --> 00:54:46,183
to reiterate two points that I made.
One, the right of publicity, whether

697
00:55:24,054 --> 00:55:29,059
Marilyn Monroe's estate has a right of
publicity after death or not, doesn't

698
00:55:40,871 --> 00:55:44,608
change that her estate still can
enforce false endorsement and false

699
00:55:44,608 --> 00:55:46,777
advertising claims if anyone is
claiming to have official Marilyn

700
00:55:46,777 --> 00:55:48,779
Monroe merchandise. It doesn't
change any ownership or enforcement of

701
00:55:48,779 --> 00:55:50,781
trademarks and copyrights that the
estate holds so there's still a lot of

702
00:55:50,781 --> 00:55:52,783
money related to Marilyn Monroe's name
in likeness separate from whether New

703
00:55:52,783 --> 00:55:54,785
York has a postmortem right of
publicity. And then I'll just add to

704
00:55:54,785 --> 00:56:00,691
that the additional piece that some
states open their doors to all-comers

705
00:56:00,691 --> 00:56:05,696
so Washington state for example and
Hawaii if you sell Marilyn Monroe

706
01:02:11,361 --> 01:02:15,865
merchandise there under current law
from the Ninth Circuit, it hasn't gone

707
01:02:15,865 --> 01:02:20,870
all the way up to the Supreme Court,
the Marilyn Monroe estate can enforce

708
01:02:33,583 --> 01:02:35,585
those rights in those states because
you don't have to have died domicile

709
01:02:35,585 --> 01:02:37,587
in those states to enforce your rights
as to products sold in those states.

710
01:02:37,587 --> 01:02:39,589
>> PRIYA ROYAL: Yeah, thank you. So
just a caveat to something Professor

711
01:02:39,589 --> 01:02:41,591
Rothman said, the tax person, for tax
purposes you can pick where you die so

712
01:02:41,591 --> 01:02:43,593
that's sort of what she was touching
on with domicile. >> JENNIFER ROTHMAN:

713
01:02:43,593 --> 01:02:45,595
But you can't change it. >> PRIYA
ROYAL: You can't change it. You can

714
01:02:45,595 --> 01:02:47,597
pick where you die and you can sort
of, I mean, the definition is a little

715
01:02:47,597 --> 01:02:49,599
bit fluid so you can sort of say your
domiciled in one place and not the

716
01:02:49,599 --> 01:02:51,601
other if it has advantages and you
have enough contacts and things of

717
01:02:51,601 --> 01:02:53,603
that but we won't go into that right
now. The other thing is you can also

718
01:02:53,603 --> 01:02:55,605
pick varying rights of publicity get
valued and where they so to speak die

719
01:02:55,605 --> 01:02:57,607
to have an afterlife because that's
where planning comes in. But you pick

720
01:02:57,607 --> 01:02:59,609
and choose and you put it into
entities. Let's say Nevada has no tax

721
01:02:59,609 --> 01:03:01,544
on corporate. Maybe some parts of
those right of publicity I'm sure Mr.

722
01:03:01,544 --> 01:03:03,546
Jabbar is quite fond of his name
but if he wants to use, if he never

723
01:03:03,546 --> 01:03:05,548
applied to use Lou Eseldor (Ph) for
example maybe he could put that in a

724
01:03:05,548 --> 01:03:07,550
Nevada trust somewhere and never use
it but then he could monetize on it

725
01:03:07,550 --> 01:03:09,552
because other people want to use
it. Or he would give up control or he

726
01:03:09,552 --> 01:03:11,554
could retain control having end of
interest and then he would give up

727
01:03:11,554 --> 01:03:13,556
control when he dies and that's a
different type of trust. So I've

728
01:03:13,556 --> 01:03:15,558
essentially probably confounded the
audience but I'm sorry. >> JENNIFER

729
01:03:15,558 --> 01:03:17,560
ROTHMAN: I just want to add -- I just
want to reiterate something because I

730
01:03:17,560 --> 01:03:19,562
think if I read the tea leaves right
what's going to happen over the next

731
01:03:19,562 --> 01:03:21,564
25 years is that high value
individuals like Mr. Abdul Jabbar and

732
01:03:21,564 --> 01:03:23,566
others are going to create companies
and vest their rights of publicity in

733
01:03:23,566 --> 01:03:25,568
them as a tax strategy to avoid
things. But the problem is that the

734
01:03:25,568 --> 01:03:27,570
door will then close and so the next
Kareem Abdul Jabbar will sign an NCAA

735
01:03:27,570 --> 01:03:29,572
contract which transfers the right of
publicity to the NCAA or to a manager

736
01:03:29,572 --> 01:03:31,574
or agent will sign over all of the
rights of publicity or to some third

737
01:03:31,574 --> 01:03:33,576
party corporation and won't be able
to get it back. So the only people who

738
01:03:33,576 --> 01:03:35,578
can benefit in some respects for the
transfer right now are people who are

739
01:03:35,578 --> 01:03:37,580
already so powerful that they can't
have their rights stripped from them.

740
01:03:37,580 --> 01:03:38,948
And so I just want to, when
we're thinking about these planning

741
01:03:38,948 --> 01:03:40,950
strategies, there's dealing with your
individual client but I also think

742
01:03:40,950 --> 01:03:42,952
this is an area since we're in DC to
highlight some of the potential law

743
01:03:42,952 --> 01:03:44,954
reform that needs to take place so
that maybe we're helping heirs of

744
01:03:44,954 --> 01:03:46,956
celebrities so they're not forced to
commodify their identities or have the

745
01:03:46,956 --> 01:03:48,291
survivors deal with crass
commercialization of their loved one

746
01:03:48,291 --> 01:03:50,293
but we're not taking advantage of
every other person. >> KAREEM ABDUL

747
01:03:50,293 --> 01:03:52,295
JABBAR: How exactly do we go about
finding out how much your right of

748
01:03:52,295 --> 01:03:54,297
publicity is worth if you're trying to
make these plans? How do you find that

749
01:03:54,297 --> 01:03:56,299
out? >> JENNIFER ROTHMAN: I'll start
but then Ms. Royal I think will have

750
01:03:56,299 --> 01:03:58,301
more to say about how the IRS would
value it. I know that for example in

751
01:03:58,301 --> 01:04:00,236
the Jackson estate that one of the
experts that were brought in for the

752
01:04:00,236 --> 01:04:02,238
Jackson estate which is actually
perplexing to me is a company that

753
01:04:02,238 --> 01:04:04,240
specializes in selling celebrity
personalities and licensing them. So

754
01:04:04,240 --> 01:04:06,242
they had a vested interest in a high
valuation as you can imagine so that

755
01:04:06,242 --> 01:04:08,244
is not the person you want valuing a
right of publicity if you want it to

756
01:04:08,244 --> 01:04:10,246
come in low, a company that makes
money by coming in high. So I just,

757
01:04:10,246 --> 01:04:12,248
strategy-wise, if you're in that
situation you might want to look

758
01:04:12,248 --> 01:04:14,250
elsewhere but because of who the IRS
goes to and others, there are only a

759
01:04:14,250 --> 01:04:16,252
very small number of people who could
say they're right of publicity value

760
01:04:16,252 --> 01:04:18,254
experts and they largely are these
people who have a vested interest in

761
01:04:18,254 --> 01:04:20,256
it being high. So that is a whole
problem with the valuation process

762
01:04:20,256 --> 01:04:22,258
itself and the valuation is
complicated by and there was an expert

763
01:04:22,258 --> 01:04:24,260
filing by a colleague of mine, Eugene
Volokh, in the Jackson estate saying

764
01:04:24,260 --> 01:04:26,262
well how do we even value this because
of the First Amendment and copyright

765
01:04:26,262 --> 01:04:28,264
preemption things? So it's very fuzzy
and amorphous plus the variation in

766
01:04:28,264 --> 01:04:30,266
state law. And with that said I
think there are strategies to --

767
01:04:30,266 --> 01:04:32,268
(Overlapping) >> DEBORAH MORALES:
Priya, how does the IRS calculate the

768
01:04:32,268 --> 01:04:34,270
value of an estate and once they do
calculate it, what can be done to

769
01:04:34,270 --> 01:04:36,272
properly challenge an over-evaluation?
>> PRIYA ROYAL: I'm going to mention

770
01:04:36,272 --> 01:04:38,274
that and answer that question
right after I address some issues that

771
01:04:38,274 --> 01:04:40,276
Professor Rothman spoke of in terms
of IP and planning. But in estate

772
01:04:40,276 --> 01:04:42,278
planning and from an IRS valuation
standpoint, you actually want a

773
01:04:42,278 --> 01:04:44,280
valuation expert who does these high
valuations because when you call a

774
01:04:44,280 --> 01:04:46,282
valuation company that does right of
publicity the first thing you tell

775
01:04:46,282 --> 01:04:48,284
them is not that I need a valuation
but that I need a valuation for estate

776
01:04:48,284 --> 01:04:50,286
tax purposes. They will use different
comparables. They will use tax

777
01:04:50,286 --> 01:04:52,288
beneficial parameters where there is
some gray area. And the IRS will give

778
01:04:52,288 --> 01:04:52,522
more credibility to those valuations
because they know what they're talking

779
01:04:52,522 --> 01:04:52,522
about from their perspective because
that is what the IRS has. The IRS has

780
01:04:52,522 --> 01:04:52,522
people and they can outsource to
private companies the very person who

781
01:04:52,522 --> 01:04:52,522
values your client's right of
publicity in their estate is going to

782
01:04:52,522 --> 01:04:52,522
be the same person that the IRS will
hire tomorrow on another estate. So

783
01:04:52,522 --> 01:04:52,522
wouldn't you want to put apples to
apples and then say my apple is better

784
01:04:52,522 --> 01:04:52,522
than yours? That's the idea. So when
you asked about IRS I think I just

785
01:04:52,522 --> 01:04:52,522
answered your question so that's where
the methodology is. >> KAREEM ABDUL

786
01:04:52,522 --> 01:04:52,522
JABBAR: With the constant movement of
federal estate exemptions, how does a

787
01:04:52,522 --> 01:04:52,522
celebrity properly plan and make the
adjustments that they have to make

788
01:04:52,522 --> 01:04:52,522
with all this movement? >> PRIYA
ROYAL: So right now the estate tax

789
01:04:52,522 --> 01:04:52,522
exemption amount is set at 11 million,
adjust for inflation like 11.18,

790
01:04:52,522 --> 01:04:52,522
something like that, and it's good
until 2026 unless the Brady Bill

791
01:04:52,522 --> 01:04:52,522
passes which means that we have
it perpetually or infinitely until

792
01:04:52,522 --> 01:04:52,522
Congress changes hands. But so the
idea is that when we have tax reform

793
01:04:52,522 --> 01:04:52,522
like this you need an attorney who
is abreast on the law changes and who

794
01:04:52,522 --> 01:04:52,522
knows how to plan quickly because here
we have a great opportunity to pass

795
01:04:52,522 --> 01:04:52,522
double the amount of assets in
valuation out of the estate. You would

796
01:04:52,522 --> 01:04:52,522
want your valuation expert to value
conservatively. Maybe sort of say at

797
01:04:52,522 --> 01:04:52,522
the worst case scenario this is
probably going to be the value so

798
01:04:52,522 --> 01:04:52,522
let's see how much we can pull out of
the estate in this amount. So this is

799
01:04:52,522 --> 01:04:52,522
where you have to work and you
have to be -- most people who have

800
01:04:52,522 --> 01:04:52,522
conservative rights of publicity they
should be getting updates from their

801
01:04:52,522 --> 01:04:52,522
attorneys. They should be getting new
law updates and they should basically

802
01:04:52,522 --> 01:04:52,522
be saying okay now what for me? And
you should be getting a list with a

803
01:04:52,522 --> 01:04:52,522
customized plan that says okay now
we need to change these things. >>

804
01:04:52,522 --> 01:04:52,522
DEBORAH MORALES: If the current
deduction is 10 or 11 million dollars

805
01:04:52,522 --> 01:04:52,522
for a single person and then that
changes in 2026 then does this have to

806
01:04:52,522 --> 01:04:52,522
be readjusted again? >> PRIYA ROYAL:
Not necessarily. If you're putting it

807
01:04:52,522 --> 01:04:52,522
in these vehicles where on paper the
person has given up control on paper

808
01:04:52,522 --> 01:04:52,522
or you're putting the grant to
retain annuity trust for example or an

809
01:04:52,522 --> 01:04:52,522
intentionally defective income trust
where basically Mr. Jabbar would get

810
01:04:52,522 --> 01:04:52,522
income that is generated from this
commercialization but he doesn't

811
01:04:52,522 --> 01:04:52,522
actually own the name, have control
over his name and likeness for estate

812
01:04:52,522 --> 01:04:52,522
tax purposes, so essentially when he
dies it passes out of his estate. It's

813
01:04:52,522 --> 01:04:52,522
not in his estate anymore so you
maximize -- when the exemptions are

814
01:04:52,522 --> 01:04:52,522
high, you pull more assets out so
that's sort of -- (Overlapping) >>

815
01:04:52,522 --> 01:04:52,522
DEBORAH MORALES: My last question
for you is so how do you know whose

816
01:04:52,522 --> 01:04:52,522
valuation is correct; the IRS’s or the
valuation company that you hired? Even

817
01:04:52,522 --> 01:04:52,522
if it's in apples to apples, how
do you plan for an expensive legal

818
01:04:52,522 --> 01:04:52,522
battle? >> PRIYA ROYAL: The best way
to do that, I usually recommend with

819
01:04:52,522 --> 01:04:52,522
planning -- I'm from being tax editor
of one of the premier leading tax

820
01:04:52,522 --> 01:04:52,522
publications because we address these
issues in our portfolios. If you have

821
01:04:52,522 --> 01:04:52,522
an entirely illiquid estate which is
what you're looking at, right? Rights

822
01:04:52,522 --> 01:04:52,522
of publicity are illiquid. There's
nothing tangible there so intangibles

823
01:04:52,522 --> 01:04:52,522
and they're illiquid. You don't want
to have to sell Mr. Jabbar's house for

824
01:04:52,522 --> 01:04:52,522
example to pay taxes. So the classic
example that is applied to other

825
01:04:52,522 --> 01:04:52,522
wealthy, not necessarily celebrities
even, taxpayers is that you would have

826
01:04:52,522 --> 01:04:52,522
a very high amount of life insurance.
By the way, the full value of life

827
01:04:52,522 --> 01:04:52,522
insurance is also included in the
estate so there's a special trust to

828
01:04:52,522 --> 01:04:52,522
pull the life insurance out of the
estate and then use the funds from the

829
01:04:52,522 --> 01:04:52,522
payout of the life insurance to pay
the taxes for the estate so you do

830
01:04:52,522 --> 01:04:52,522
that planning. So I think that sort of
gives you a general -- that's just one

831
01:04:52,522 --> 01:04:52,522
of many ideas but that's one of the
more commonly used ones. >> KAREEM

832
01:04:52,522 --> 01:04:52,522
ABDUL JABBAR: Do you give aspirin to
people who are trying to figure this

833
01:04:52,522 --> 01:04:52,522
out? (Laughter) >> PRIYA ROYAL: Now
you know why I apologized. Thank you.

834
01:04:52,522 --> 01:04:52,522
>> MARY BONEY DENNISON: We are running
out of time. If you have any last

835
01:04:52,522 --> 01:04:52,522
questions, we can ask them. Otherwise
I think we need to wrap up because

836
01:04:52,522 --> 01:04:52,522
we've got a tight schedule today. >>
DEBORAH MORALES: We've got a lot to

837
01:04:52,522 --> 01:04:52,522
learn. >> MARY BONEY DENNISON: Okay
well thank you. Please give everybody

838
01:04:52,522 --> 01:04:46,583
a big round of applause.
Thank you. (Applause)