Celebrity Brand Value and Estate Planning

Forbes magazine’s publishes an annual list of the Top-Earning Dead Celebrities, or “Delebs”, as they are referred to by industry executives. At the top of the 2012 listing is Elizabeth Taylor at $210 million, followed by Michael Jackson at $145 million, and in third place, Elvis Presley, at $55 million. A celebrity’s image and “persona” can be extremely valuable intellectual property. With today’s technology, images and sounds can be captured and transmitted globally, with a minimum of effort.

Anyone can register their name, nicknames, poses, slogans, and signatures, as trademarks. Even without a registered trademark, celebrities have “publicity rights” to prevent unauthorized use of their name, likeness or other personal attributes. However, the right to publicity is not protected by federal law; rather it is a matter of state law. A range of U.S. states have devised legislation aimed at preventing unauthorized commercial use of an individual's name or likeness, giving that person (or their estate) an exclusive right to license the use of the identity for commercial purposes

Some states treat publicity rights as transferable property that survives a celebrity’s death. Other states treat publicity rights as personal rights that terminate at death. Of the states with post-mortem rights, some only apply to celebrities that pass away after the enactment of such states laws. Other states retroactively apply their laws to any celebrity who passes after a specified date, sometimes decades before the enactment of the law. California law covers a person’s lifespan plus 70 years, Oklahoma has enacted legislation that covers 100 years after death. The comedian Bill Cosby, a resident of Massachusetts, put his support behind a recently proposed law that would protect a celebrity’s publicity rights for 70 years after death.

Until the Estate of Andrews v. United States in 1994, the value of a decedent’s right of publicity was commonly ignored for purposes of calculating federal estate taxes due on death. Virginia C. Andrews was, at the time of her death, an internationally known, best-selling author. The Estate did not list Andrews’ name as among its assets. In 1990, the IRS issued a tax deficiency of $649,201.77 based on their valuation of the intangible asset at $1,244,910.84. Ultimately the court concluded on a value of approximately $700,000.

Estate planners would be well served in determining the value of the right to publicity as a component of the overall estate planning strategy of their celebrity client.