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Kardashian Diary Fight Highlights Role of Intangible Property in Estate Planning

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Possession of family patriarch’s diary takes a back seat to the power to publish its contents — or prevent anyone else from selling it for gossip. Today’s attorneys need to take publicity, image rights and social media into account when writing a will.

Robert-Kardashian-and-His-Kids

Happier times with the Kardashian family. Not pictured: any of Robert Kardashian’s three wives.

The Kardashian kids are headed back to court, this time to punish their estranged stepmom for publishing parts of their late father’s diary.

They say the book was left to them and that its contents are protected by their family trust.

Either way, future estate planners need to watch this case to make sure they know where their clients’ hard assets end and where relatively intangible property leaves off.

Between the diary and the copyright

On the surface, Kardashian stepmother Ellen Pearson has slim ground to stand on here.

When high-powered Hollywood attorney Robert Kardashian died, his will made clear that  “all intangible property and tangible personal property” be rolled into trust for the benefit of his kids.

The only exception was the house and furnishings in the resort town of Indian Wells he left to Ellen, whom he married barely two months before he died.

Ellen claims she found the diary on the property and subsequently is in her rights as surviving spouse to sell excerpts to any gossip zine that comes up with an attractive offer.

The Kardashian family managers at Lavely & Singer fire back that the book wasn’t normally kept at the house – or as the will states, wasn’t “customarily used with that real property” – and so should be handed over into the trust’s custody.

Whether Ellen legally owns the physical diary itself, they say she crossed the line by licensing out the intangible publication rights to supermarket tabloid In Touch Weekly in exchange for several thousand dollars.

All intangible rights went to the trust. All property she inherited was explicitly described as “real” or “tangible.”

That includes the right to publish or keep the contents of Kardashian’s personal papers private, much less profit from his name, likeness or personal brand.

And that’s what the Kardashian family really seems to be protecting here.

Relatively low stakes for some

At most, Ellen earned maybe $100,000 for letting the gossip papers quote from the diary.

The kids are suing for five times that amount, plus legal fees and any damages to their reputations they might have missed.

Considering that dad left them a reported $100 million in trust and their biggest celebrity endorsements take in $200 million to $300 million a year, the money here seems almost trivial.

But for Ellen, who declared bankruptcy in 2010, it’s a fair chunk of cash.

She says Kardashian asked her to release the diary “when the time came” to tell his side of the family’s story, but unless she can produce documentation to that effect, it’s her word against the will.

That’s exactly what a well-drafted estate plan in this age of social media stardom and reality TV should do.

Whatever Kardashian told Ellen on his deathbed, he probably wasn’t expecting the family to become so obscenely famous that his private reminiscences would be worth money to future generations.

Think of Steve Jobs and similar high-tech gurus whose lawyers advise them to assign publicity rights to their name and image after they’re dead.

Locking down the rights shut down the unauthorized Steve Jobs doll and may one day allow Apple to bring him back in digital form for one last MacWorld speech.

We can’t imagine what his heirs may want to do with his personal papers and digital files, but his blue-chip estate plan probably provided for every scenario.

Making personal property official for the heirs’ own good

Copyrights and other formal intellectual property are obvious intangible assets that need to be assigned.

Publicity and privacy can probably be rolled in as Kardashian’s lawyers did.

Of course, the dead have no right to privacy, so the best the Kardashians can do is make it illegal for anyone else to publish their father’s private thoughts.

They’ve applied to copyright the diary even though Ellen is still hanging onto the physical book itself and the excerpts have already been published.

“For us, the background is not the most interesting part of this will dispute,” notes Florida probate lawyer Randy Bryant.

“The Kardashians’ response to the diary entries’ publication is.”

Whether the after-the-fact copyright strategy will fly, the goal is clearly to assert that they’re the only ones who can assign the publishing rights – and then withhold it as they choose.

Of course, Ellen could always simply summarize what she sees in the diary, but would that rewarmed account be worth as much on the open market.

She could claim “fair use” on a snippet or two, but realistically, the diary seems like fairly thin gossip feed as it is.

Apparently Kardashian’s first wife Kim lost her temper a few times and the kids were sad. If not for the first-person exclusive angle, those revelations probably wouldn’t sell many tabloids.

But the family doesn’t want it out there under any name. Good lawyers make sure nobody will try it again.

Permalink: http://thetrustadvisor.com/news/kardashian2013

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