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Estate Fights for Music Royalties in the Digital Age

Estate planning can have ramifications decades (or even centuries!) after an individual passes away. On one hand, this is true because how one leaves assets and guidance to others can influence their long-term personal legacy. More specifically, however, planning can dictate legal matters far into the future. Whoever is in control of administering an estate has significant control over how some of those legal issues are handled.

Sudden Celebrity Death
Consider a dispute that recently arose between the estate of Rick Nelson and Capitol Records. Nelson was a popular musician an actor in the 50s, 60s, and 70s, best known for his role in the TV series “The Adventures of Ozzie and Harriet.” Unfortunately, Nelson died unexpectedly in a 1985 plane crash at the age of 45.

Reports explain that complex feuding took place shortly after the death. Nelson was divorced, had a child outside of wedlock, and was dating a woman at the time of his death who was also killed in the plane crash. The estate was administered by David Nelson, Rick’s brother. Fortunately, even though Nelson’s death was sudden, he had some steps in place to protect his interests. A will left everything to his children from marriage (his out-of-wedlock child was ignored).

However, even though there was a will, problems arose. Nelson’s ex-wife threatened a suit in order to claim life insurance money. She also attempted to take control of the estate away from David Nelson but failed. In addition, the parents of Nelson’s then-girlfriend filed a wrongful death lawsuit against the singer’s estate.

All of these issues were eventually resolved either via settlement between the parties or by the courts.

Drama Re-surfaces Decades Later
Interestingly, the estate of Rick Nelson made a recent reappearance in the news. That is because the heirs of the estate–his children–filed a lawsuit in 2011 against Nelson’s former record label. At issue were royalties that the family claimed were owed to them under his original 1957 contract. Specifically, the family argued that the company was shorting them their share of income from digital downloads and streaming music agreements.

Fortunately, earlier this month, a settlement agreement was reached between the two sides. A spokesman for the record company announced the decision, noting that they are looking forward to working with the family to further promote the singer’s most famous recordings.

Planning for an Uncertain Future
This example is an interesting reminder of how these decisions can have ramifications decades down the road. Obviously, at the time of Nelson’s passing–and when his will was created–the idea of digital downloads and streaming music were unheard of. There was no way for administrators to understand how those issues would affect a contract, royalties, or inheritances in an estate.

All those crafting long-term plans now must appreciate that new technologies or issues may arise in coming decades that we simply cannot fathom now. As a result, it is critical to create plans that are flexible, providing a framework for any possible dispute to be resolved as efficiently as possible.

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