Forum: Author Hangout

Book royalties question in the USA

Switch Blayde 🚫

When I signed up with Amazon KDP, I gave them my social security number and bank account information. Once a month they deposit my book royalties into my bank account. And, at the end of the year, they mail me a 1099-MISC for income tax purposes.

What happens if I die? (I'm currently working on updating my trust.)

If I die, my social security number is gone (and I guess can be reassigned). And what about the 1099-MISC? They'd be sending it to an inactive social security number (to a dead person who no longer files tax returns).

How does my wife or heir keep getting the royalties?

Replies: Dominions Son DBActive

Dominions Son 🚫
Updated:

@Switch Blayde

If I die, my social security number is gone (and I guess can be reassigned).

You guess wrong.

https://www.ssa.gov/history/hfaq.html

Q20: Are Social Security numbers reused after a person dies?

A: No. We do not reassign a Social Security number (SSN) after the number holder's death. Even though we have issued over 453 million SSNs so far, and we assign about 5 and one-half million new numbers a year, the current numbering system will provide us with enough new numbers for several generations into the future with no changes in the numbering system.

How does my wife or heir keep getting the royalties?

Provided they have the details for your KDP account, most likely the same way your wife (in the case of separate bank accounts) or your heir would gain control of your bank accounts. Which in the case of bank accounts, would be to provide the bank with your death certificate and proof that they are the legitimate inheritor.

This should be easy for your wife. A copy of your marriage certificate should suffice.

That's what my mom had to do when my father died.

It would potentially be easier if KDP allows you to specify beneficiaries in the event of your death. My IRA is set up like this. I do not know if Amazon would do this for KDP.

Replies: Grey Wolf

Grey Wolf 🚫

@Dominions Son

(Usual 'I am not a lawyer' disclaimer)

Beneficiaries are 100% the way to go whenever possible. In almost all cases, things with beneficiaries are 'transfer upon death', which means they do not go through probate. Avoiding probate is enormous for a variety of reasons.

Check. On everything. Fill it out. Obviously, you'll likely never know how much it helped, but the odds are that it will make the lives of those you leave behind much less crazy.

Most banks let you set beneficiaries. Without a beneficiary, it's going through probate.

Replies: Dominions Son DBActive Switch Blayde

Dominions Son 🚫
Updated:

@Grey Wolf

Without a beneficiary, it's going through probate.

My understanding, which could be wrong, is that in some states, if there is a surviving spouse, the spouse gets everything (absent a will specifying otherwise) without the need for probate.

Replies: DBActive

DBActive 🚫

@Dominions Son

The spouse still has to prove the relationship to the register of wills, surrogate or whatever the court official charged with handling probate matters in your state.

DBActive 🚫

@Grey Wolf

Attempts to avoid probate are:
1. Asking for lawsuits and strife if there is anyone other than a spouse and/or only one child.
2. Usually futile. There is almost always some property that will need to go though appointment of a personal representative (administrator or executor of the estate.) or some other similar process for small estates.
3. If you have children who are either minors or disabled, you are completely and totally irresponsible if you do not have a Will appointing guardians and trustees for the child.
4. You won't avoid taxes and will likely wind up with higher costs in the end.

Switch Blayde 🚫

@Grey Wolf

Beneficiaries are 100% the way to go whenever possible.

That's not the issue/question. Most of my assets are in a trust so there won't be probate. I'm not talking about inheritance.

I'm talking about book royalties. What does Amazon do when the author dies? Just keep the royalties? The books aren't owned by an estate. They're not in my trust. All Amazon knows is my social security number and my bank account. What happens if they find out the social security number is a dead person?

The bank account is a joint account with me and my wife. So if she outlives me, the account will stay open to accept the royalty payments (assuming the dead social security number doesn't stop Amazon from sending it). But when she dies, the bank account goes away (even though it's in the trust). My son will become the trustee after we're gone so he'd probably close that checking account and put his in the trust. So if that happens, Amazon will send the money to a non-existing bank account. The result is my son doesn't get the royalty payments even if my books are selling.

I guess I was asking how Amazon handles an author dying when the author has heirs.

Bookapy royalties are a different scenario.

DBActive 🚫
Updated:

@Switch Blayde

Amazon also has to have your name and address, don't they?

Your rights in the book and to the royalties produced as a result of those rights are part of your estate just like any other property. If you haven't conveyed the rights to the trust or conveyed them to someone while you are alive, they will pass per the instructions in your will or by intestate succession.

That's an example of why there will be a probate proceeding to deal with estate property.

Replies: Switch Blayde

Switch Blayde 🚫

@DBActive

If you haven't conveyed the rights to the trust or conveyed them to someone while you are alive, they will pass per the instructions in your will

I didn't think about that. Thanks.

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Forum: Author Hangout

Book royalties question in the USA

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