Published on: 09 June 2020 in Directors UK
Wills, Estates and Directors UK Payments: Frequently Asked Questions
Reading time: 9 minutes and 3 seconds
As authors and creators, directors are survived by their work. This means that Directors UK will continue to collect and distribute royalty payments for members, even after they have passed away.
It’s important, therefore, for members to make sure that they have a plan for their distribution payments in the event of their death. But how does this all work, and how can you go about making sure that your royalties are paid in the manner of your choosing?
Our legal team have compiled the following FAQs for preparing a will, registering an estate and more. You can navigate via the links below:
- Can Directors UK still collect for my work after I die?
- Why do I need to make a will?
- What do I need to make sure I have in my will?
- I already have a will, what do I do?
- I work through a PSC and my income as a director is paid to my company. What happens to the income I receive from Directors UK when I die?
- What does Directors UK require to register my estate?
- What is the situation if I live abroad?
- Why do my heirs/executor(s) need to apply for probate?
Can Directors UK still collect for my work after I die?
Yes, Directors UK may still collect rights income for your beneficiary(s), if secondary use of your works continues to be reported to us. If a director was already registered with us before their death, but we do not have a registered successor member to pay out to, we are only allowed to hold on to further payments for up to 12 years. If we have been unable to register the estate in this time the money may be declared non-distributable and shall be used in accordance with our Articles of Association.
It is very important that you have clear provisions relating to your copyright and any rights relating to copyright, which include the fees (rights income) that Directors UK collect on your behalf, in your will. This will ensure these assets pass in accordance with your wishes and we are able to register your estate and continue to pay your rights income to your beneficiaries.
Why do I need to make a will?
It is important that a will is made. If you have made a will then all of the assets which are in your sole name, including all real and personal property, money, copyright and any rights income related to your work will pass to your beneficiaries in accordance with your wishes. If a will is not made then all your assets will pass to your next of kin in accordance with the rules of intestacy. (Please see below for why your executor(s) must also apply for probate.)
These rules dictate how and to whom an estate will be distributed and as such this may not be in accordance with your wishes. If you die intestate and your next of kin does not apply for Letters of Administration (the authority to administer the estate of someone who has died without making a will) your rights income may ultimately fall to the Crown.
What do I need to make sure I have in my will?
We advise that you appoint a single person to become the successor member of Directors UK (so who you would like to receive your rights income after you pass away). If you wish your future rights income to be divided between two or more beneficiaries in your Will, then you will still need to appoint one individual who can manage the successor membership and pay the beneficiaries their correct shares, as Directors UK can only register a single member.
You may like to take this suggested clause with you when seeing your solicitor.
“FOR the purposes of collection of income arising from the Rights I DIRECT AND EXPRESS the wish that XXXXXXXXXXXXX shall be the successor member ("the Successor Member") of Directors UK Limited its successor or any other collection society or such other organisation responsible for the collection of income arising from the Rights and that the Successor Member shall account to XXXXXXXXXXXXXXXXXXXXXXXXXXXXX for the income to which they are entitled to under clause X of this will”
We advise you to leave your rights income as a specific legacy. If it forms part of the residuary estate and if you leave your estate to multiple beneficiaries, it can become problematic for Directors UK as we can only pay out to one individual (being the successor member of Directors UK). That individual would then have to receive payment on behalf of possibly many other beneficiaries and be responsible for distributing it. If there are many beneficiaries (potentially some unrelated or otherwise not in contact with each other), they all have to be successfully traced and verified and all agree (in writing) to the successor member as appointed in the will to receive payments on their behalf, before Directors UK may issue any further payments .
It is of course up to you how you wish to leave your rights income.
You may like to take this suggested clause with you when seeing your solicitor.
“I GIVE free of inheritance tax all my rights to residuals participations and royalties and rights to receive monies in any theatrical or television motion picture or television series that I am entitled to as a director ("the Rights") to XXXXXXXXXXXXXXXXX [ and XXXXXXXXXXXXXXXXXX]”
I already have a will, what do I do?
If you already have a will but you now wish to include provisions for your rights income you can either revoke your existing Will and create a new one or add a codicil to your existing will. You should consult a solicitor in these circumstances as there are certain formalities with which they must comply and simply adding to a will may risk invalidating the whole will.
I work through a PSC and my income as a director is paid to my company. What happens to the income I receive from Directors UK when I die?
Directors UK do not register companies as members, only individual rightsholders (i.e. you as a director). Therefore, if you have legally assigned the income that Directors UK collect on your behalf to any company we will be unable to continue to pay out any income we have collected, and may continue to collect, on behalf of your estate. The rights that Directors UK manage are personal in nature and are normally carved out to yourself as the director under any director’s contract you sign through your PSC. Legally you would have to have made a specific assignment of the Directors UK income stream you receive to your PSC, otherwise the rights and income will remain your personal property, and shall form part of your estate when you die. We advise you not to assign these rights to your PSC for the reasons set out here, and for you to ensure that they are dealt with under your will so your beneficiaries can receive the income after you die. Directors UK are happy to pay a company if your beneficiaries nominate payment to be made to the company but they cannot be the members of Directors UK and the legal owner of the fees.
What does Directors UK require to register my estate?
We will require the following documents in order to continue to pay out your rights income:-
• Death Certificate
• Sealed office copy of the Grant of Probate (or Letters of Administration) issued within the United Kingdom
• A copy of the Will
• Photograph ID and proof of address for the executor(s) or beneficiary(s) registering as successor member, as well as for any further beneficiaries signing their consent to the appointed successor member receiving the income
What is the situation if I live abroad?
If you live abroad and are domiciled outside the UK, the income that Directors UK collect is a UK asset. If at the time of a member’s death Directors UK are holding funds in our account for them, then Directors UK are holding a UK situs asset. A Grant of Probate in the UK will need to be granted and it may be necessary for your executor to have Probate granted in the country you reside in as well.
Why do my heirs/executor(s) need to apply for probate?
Applying for probate gives an executor the legal right to deal with your property, money and possessions when you pass away. In England and Wales, there are two types of grant which give this legal right:
• Grant of Probate – if the person left a will
• Grant of Letters of Administration – if the person did not leave a will (died intestate)
Both these documents are often referred to as grants of representation. In both circumstances, the application process is the same.
This document is required by asset holders (for example Directors UK or other collective management organisations, banks, etc.) as proof to show the correct person or persons’ authority to administer a deceased person’s estate. In other words, the asset holders will hold onto these assets (rights income etc.) until proof of probate and written instructions are provided confirming who is legally entitled to receive them.
If probate has not been sought, then any assets in your sole name (e.g. your copyright, and any rights income from CMOs) will not have legally passed to your beneficiaries
If Letters of Administration have not be applied for when dealing with an intestate estate then your assets in your sole name, e.g. your copyright, and any rights income from CMOs) will be considered property of the Public Trustee , and your beneficiaries will be considered ineligible to register to receive any future payments.