Celebrities can give us a glimpse into lifestyles beyond our wildest dreams. But celebrities face many of the same estate planning issues that the rest of us do, such as which tax planning strategies to use and how to divvy up assets among loved ones when they die.

Jerry Lee Lewis’s death has prompted thoughtful retrospectives about his life in the spotlight. But on a more practical level, his death raises questions about what will become of his estate. This exercise in estate planning “what ifs” can provide lessons for anyone—celebrity or not.

What Lewis Leaves Behind

Lewis died in his home near Memphis on October 28, 2022, at the age of eighty-seven. He outlived other rock and roll icons of his era such as Elvis Presley and Johnny Cash despite a hard-charging lifestyle that included substance abuse and serious health problems. Vulture, part of New York Magazine, describes him as “the last man standing from the dawn of rock and roll.”[1] 

Arguably best known for his rock song “Great Balls of Fire,” Lewis also had country hits and was a four-time Grammy winner. He is a member of both the Rock & Roll Hall of Fame and the Country Music Hall of Fame who recorded over forty albums during a career that spanned seven decades.

Lewis is survived by Judith Coghlan Lewis, his seventh wife. He also had six children. Four of his children are alive—Jerry Lee Lewis III, Ronnie Lewis, Phoebe Lewis, and Lori Lancaster. In the years before his death, Lewis was embroiled in a feud with his daughter Phoebe and her husband, Ezekiel Loftin. In 2017, Lewis sued Phoebe and Loftin for allegedly taking financial advantage of him, although the suit was later dismissed.[2]

Lewis filed for bankruptcy in 1988. His petition listed over $3 million in debts, including $2 million in Internal Revenue Service debt, tens of thousands in attorney fees, and medical bills.[3] At the time of his death, his net worth was estimated to be between $10 million and $15.4 million.[4]

Estate Planning Scenarios

As estate planning lawyers, we cannot help but look at Jerry Lee Lewis’s life and legacy through the lens of our vocation. Most of us do not relate to his fast-living rock and roll lifestyle, but we can see common estate planning issues his life raises that may be helpful for you to think about. Below, we discuss some of the issues we are keeping an eye on regarding Lewis’s estate.

How will he treat his children?

It is probably a safe bet that Phoebe—the daughter he accused of elder abuse—will be disinherited by Lewis, which he is allowed to do under Mississippi law. However, there is a chance she will not need his money, as Phoebe had her own career in music and worked in Hollywood.

It remains to be seen how Lewis treats his other surviving children in his estate plan. While many parents choose to leave their children equal amounts of money and property, the Lewis family’s situation raises the question of what is fair versus what is equal.

Every child has different financial needs. Some achieve financial independence, and others struggle financially. Parents might also treat their children differently based on the age at which they had them and their finances at the time. For example, children born later, after their parents have established good careers, might receive more than children born earlier, when their parents were not making as much. Splitting everything equally among children might not always be the fairest approach.

How will he treat his surviving spouse?

Lewis was married seven times, and his marriages were not without controversy. His latest wife was by his side when he died. Will he reward her loyalty?

If Lewis did not have a will, then intestate law (the law specifying what happens when you have no will) dictates that his spouse is the primary beneficiary of his estate. Around two-thirds of Americans die with no estate plan. Celebrities are not immune to this lack of planning; there have been many celebrities who have died without even a basic will.

Assuming Lewis had a will, he still could have left everything to his wife. Or, he could have left her a portion of his wealth. If the latter is true, the share could be given outright (i.e., as a lump sum) or held in a trust and managed by a trustee, to be distributed to her over time.

Lewis had further options for the type of trust he used. Each type of trust has pros and cons. For example:

• A qualified terminable interest property (QTIP) trust would allow him to provide trust income to his wife but maintain control of what happens to the trust’s money and property once she dies. Additionally, he could give the trustee discretion to give his wife additional amounts during her life. QTIP trusts are often used when somebody has beneficiaries from a past marriage but wants to provide for their current spouse if they die before the spouse.
• A discretionary trust set up for Lewis’s wife would give the trustee discretion to make payments to her as the trustee sees fit. While this type of trust could help protect the trust’s money and property from creditors, money given to a discretionary trust will not qualify for the unlimited marital deduction.

Tax Issues

Death and taxes are inevitable. However, estate taxes may not be inevitable, depending on the size of the estate at the time of death and how much of the lifetime exemption has been used.

The lifetime gift and estate tax exemption is the amount of money an individual can transfer to their heirs without being liable for estate taxes. These transfers can be made as gifts over the course of a person’s life or at death.

For 2022, the federal lifetime gift and estate tax exemption was $12.06 million. In 2023, it increased to $12.92 million. Taking the lower-end estimate of Lewis’s net worth, his estate value falls below the 2022 lifetime exemption amount. As a result, assuming he did not use any of his exemption during life, he may not have required strategies to avoid estate taxes if his spouse does not have significant personal assets. For couples, the exemption amount doubles to $24.12 million (2022) and $25.84 million (2023).

Lewis’s estate does not have to worry about an estate tax being levied by the state of Mississippi because Mississippi does not have an estate tax. However, if he had died in a state with a state estate tax, or if he had died owning property in one of those states, there could be an additional tax due because of his death. Each state with an estate tax sets its own exemption amount and tax rate.

If Lewis’s wife has money and property that exceed the individual gift and estate tax exemption, she may benefit from electing to receive the deceased spousal unused exclusion (DSUE) amount. Meant to benefit the surviving spouse, the DSUE enables the deceased spouse’s remaining exemption amount to be transferred to the survivor if the deceased spouse’s estate did not use the entire exemption amount. In other words, Lewis’s wife would qualify for a $2.06 million DSUE amount based on the 2022 exemption of $12.06 million and his estimated estate value of $10 million.

Unexpected Plot Twists

There is no telling exactly what Jerry Lee Lewis decided to do with his money. His wife and children may be just as in the dark as the rest of us. And there could be some surprises lurking in his estate plan.

The Lewis family asked that in lieu of donating flowers for his funeral services, donations be made in his honor to the Arthritis Foundation or MusiCares. Could Lewis have left a sizable portion of his estate to these or other charities instead of to his family?

We may find out in the months ahead—or we may not. If he left the money to charity in a trust, information about his estate might not become public.

Estate Plans Are Not Just for Rock Stars

You do not need to be a rock-and-roll legend to need an estate plan. Regardless of the size of your estate, you should prepare a blueprint for how your assets will be distributed, how your debts will be settled, and how you can ensure that more of your wealth ends up with the people and causes you care about. To start planning today, contact our office to schedule a meeting with our estate planning lawyers.

The post Goodness Gracious! What Jerry Lee Lewis’s Estate Plan Could Look Like appeared first on Law Office of Ruby Steinbrecher.

Aaron’s untimely passing is one of the more tragic celebrity deaths of 2022. It is also one of the messiest from an estate planning perspective. The late singer, who struggled with substance abuse and family discord, died unmarried and without a will, raising questions about the value of his estate, what will become of his remaining fortune, and who will provide care for his young child.

Aaron’s one-year-old son stands to legally inherit everything, and other family members have reportedly said they do not plan to dispute his inheritance. But there is still the issue of who will manage his son’s money until he comes of age. Because Aaron did not have an estate plan, this matter will be decided by the courts.

From Child Stardom to Bankruptcy

Aaron Carter did not achieve the stardom of his older brother Nick, but he was a highly successful performer in his own right. He opened for the Backstreet Boys at age nine and shortly thereafter landed a record deal. Between his music and an acting career that featured television and Broadway appearances, Aaron made over $200 million before turning eighteen, he said in 2016.[1]

But growing up as a celebrity was not without difficulties. Despite a decade of nearly nonstop touring and music making, Aaron learned on his eighteenth birthday in 2005 that he had only $2 million in his bank account and owed around $4 million in taxes.[2] In 2013, hoping for a fresh start, he filed for bankruptcy. His net worth at the time was just over $8,000, with more than $2.2 million in liabilities.

Aaron blamed his parents for mishandling his money and leaving him in a financial hole he never quite got out of. Under California’s Coogan Law, designed to protect child performers like Aaron from unscrupulous parents, Robert and Jane Carter were responsible for setting aside 15 percent of the young star’s money into a special trust account, known as a Blocked Coogan Trust Account, until he came of age. Similar laws have been passed in New York, Illinois, Kansas, Louisiana, Nevada, New Mexico, North Carolina, Pennsylvania, and Tennessee. 

However, Aaron told Oprah Winfrey in 2016 that his parents never set aside the required funds. He also accused his mother of taking funds out of his bank account. Aaron publicly feuded with family and was not on speaking terms with Nick at the time of his death.

Aaron struggled with personal demons as well. In 2019 he revealed that he had been diagnosed with schizophrenia and bipolar disorder.[3] A bright spot in his life was the birth of son Prince in 2021. But at the time of his death, Aaron and ex-fiancée Melanie Martin did not have custody of Prince, allegedly due to concerns about drug use and domestic violence.[4]

Melanie was granted custody of Prince in December, after Aaron’s death, however.[5] Jane Carter told TMZ that she and Aaron’s siblings still had not met Prince, but wanted to have a relationship with him and Melanie.[6]

Dying Intestate and California Succession Law

Aaron died without a will according to multiple media outlets, even though his attorneys had advised him to make one after the birth of his son. Dying intestate—the legal term for having no will—means that his estate will be subject to California intestate succession law.

Because Aaron was unmarried, his entire estate will pass by law to his son Prince. Jane Carter has said that the family is on board with this and wants Prince to be taken care of financially. TMZ estimated the value of Aaron’s estate at $550,000, including the Lancaster, California, home where he was found dead.

If he had been married to Melanie, she would not have necessarily received all of his money and property, unless Aaron had no other living relatives. If Aaron did not have a son, his parents would have been next in line to inherit his estate.

Unresolved Issues in Aaron Carter’s Estate

While Aaron’s family has indicated there will not be family inheritance drama, it is uncertain who will manage the money on Prince’s behalf while he is a minor. In California, an individual cannot inherit property in their own name until they reach age eighteen.

California law provides for what is known as a guardianship of the estate to be set up when a child inherits more than $5,000 and their benefactor has not set up a trust to hold the funds. Typically, the court appoints the surviving parent to be the guardian of the child’s estate.[7]

One candidate who could look after the inheritance for Prince is Aaron’s twin sister, Angel Carter. Angel filed a petition in December 2022 to become the administrator of Aaron’s estate. As estate administrator, Angel would serve as Aaron’s legal representative, in charge of closing his accounts, paying off his debts, and distributing assets to Prince. Another candidate to watch over Prince’s inheritance is Jane Carter, but she is less likely to be chosen given the allegations that she mismanaged her own son’s money. A family court found Prince’s mother, Melanie, fit to take custody of Prince at a December hearing, and a court could decide that she is also fit to look after his inheritance until he turns eighteen. However, she will have to petition the court to become the guardian of Prince’s estate. Additional family members could also submit petitions, and the court would then decide which one of them is best able to manage the inheritance for the child.

The court could order one of the following:[8]

●      A guardianship must be created and Prince’s money must be turned over to the guardian.

●      The money must be invested with the County Treasurer.

●      The money must be deposited in a blocked account or a single premium deferred annuity, with withdrawal permitted only by court order.

●      All or part of the money must be turned over to a custodian under the California Uniform Transfers to Minors Act, which allows a court-appointed custodian to manage the minor’s account without a guardian or trustee until the minor turns eighteen.

A guardian of Prince’s estate would be required to carefully manage his money and property, make smart investments, collect and inventory estate accounts and property, maintain accurate financial records, and regularly file financial accountings with the court. A court order is required to make many types of guardianship financial transactions. The guardianship can be removed and transferred when the court deems it is in the child’s best interest.

Take Control of the Future with Estate Planning

Those close to Aaron Carter say he would have wanted Prince to have everything. Fortunately, it appears that his final wishes coincide with state law—but that is not always the case. Not having a will and other important estate planning documents can also increase the odds of family infighting over a decedent’s money and property and the care of surviving minor children.

About two-thirds of Americans do not have an estate plan, leaving the fate of their money and property up to state law in the event of disability or death; and in some cases, the decision of who will care for their children will be left to the court. Even a simple will can address many of these problems.

Our estate planning attorneys can help you put your final wishes and instructions into written documents that have the force of law. We can also help with issues related to guardianship, custodianship, and other court petitions. To set up an appointment, please call or contact us.

[1] Lisa Capretto, Aaron Carter Opens Up About The Multimillion Dollar Mistakes That Led To His Bankruptcy, HuffPost (Feb. 11, 2016), https://www.huffpost.com/entry/aaron-carter-bankruptcy_n_56bba457e4b0c3c5504fe5a0.

[2] Anna Sulkin, Aaron Carter’s Death Renews Focus on Mismanagement of Funds, Wealth Management (Nov. 15, 2022), https://www.wealthmanagement.com/high-net-worth/aaron-carter-s-death-renews-focus-mismanagement-funds.

[3] Sandra Gonzalez, Aaron Carter reveals battle with multiple mental health issues, CNN (Sept. 12, 2019), https://www.cnn.com/2019/09/11/entertainment/aaron-carter-multiple-personality-disorder/index.html.

[4] Aaron Carter’s Fiancée Gets Full Custody Over Son, TMZ (Dec. 15, 2022), https://www.tmz.com/2022/12/15/aaron-carter-fiancee-custody-son-prince-melanie-martin/.

[5] Aaron Carter’s Family Wants His Money to Go to Son, No Fights Over Cash (Dec. 4, 2022), https://www.tmz.com/2022/12/04/aaron-carter-family-money-son-prince-fight-cash/.

[6] Id.

[7] Guardianship, Self-Help, California Courts, https://www.courts.ca.gov/selfhelp-guardianship.htm (last visited Jan. 27, 2023).

[8] Minor’s Assets – How To Protect, Self-Help, The Superior Court of California County of Santa Clara https://www.scscourt.org/self_help/probate/minors/minors_assets.shtml (last visited Jan. 27, 2023).Musician Aaron Carter, a former child pop star and younger brother of Backstreet Boys singer Nick Carter, died in November at the age of thirty-four.

Aaron’s untimely passing is one of the more tragic celebrity deaths of 2022. It is also one of the messiest from an estate planning perspective. The late singer, who struggled with substance abuse and family discord, died unmarried and without a will, raising questions about the value of his estate, what will become of his remaining fortune, and who will provide care for his young child.

Aaron’s one-year-old son stands to legally inherit everything, and other family members have reportedly said they do not plan to dispute his inheritance. But there is still the issue of who will manage his son’s money until he comes of age. Because Aaron did not have an estate plan, this matter will be decided by the courts.

From Child Stardom to Bankruptcy

Aaron Carter did not achieve the stardom of his older brother Nick, but he was a highly successful performer in his own right. He opened for the Backstreet Boys at age nine and shortly thereafter landed a record deal. Between his music and an acting career that featured television and Broadway appearances, Aaron made over $200 million before turning eighteen, he said in 2016.[1]

But growing up as a celebrity was not without difficulties. Despite a decade of nearly nonstop touring and music making, Aaron learned on his eighteenth birthday in 2005 that he had only $2 million in his bank account and owed around $4 million in taxes.[2] In 2013, hoping for a fresh start, he filed for bankruptcy. His net worth at the time was just over $8,000, with more than $2.2 million in liabilities.

Aaron blamed his parents for mishandling his money and leaving him in a financial hole he never quite got out of. Under California’s Coogan Law, designed to protect child performers like Aaron from unscrupulous parents, Robert and Jane Carter were responsible for setting aside 15 percent of the young star’s money into a special trust account, known as a Blocked Coogan Trust Account, until he came of age. Similar laws have been passed in New York, Illinois, Kansas, Louisiana, Nevada, New Mexico, North Carolina, Pennsylvania, and Tennessee. 

However, Aaron told Oprah Winfrey in 2016 that his parents never set aside the required funds. He also accused his mother of taking funds out of his bank account. Aaron publicly feuded with family and was not on speaking terms with Nick at the time of his death.

Aaron struggled with personal demons as well. In 2019 he revealed that he had been diagnosed with schizophrenia and bipolar disorder.[3] A bright spot in his life was the birth of son Prince in 2021. But at the time of his death, Aaron and ex-fiancée Melanie Martin did not have custody of Prince, allegedly due to concerns about drug use and domestic violence.[4]

Melanie was granted custody of Prince in December, after Aaron’s death, however.[5] Jane Carter told TMZ that she and Aaron’s siblings still had not met Prince, but wanted to have a relationship with him and Melanie.[6]

Dying Intestate and California Succession Law

Aaron died without a will according to multiple media outlets, even though his attorneys had advised him to make one after the birth of his son. Dying intestate—the legal term for having no will—means that his estate will be subject to California intestate succession law.

Because Aaron was unmarried, his entire estate will pass by law to his son Prince. Jane Carter has said that the family is on board with this and wants Prince to be taken care of financially. TMZ estimated the value of Aaron’s estate at $550,000, including the Lancaster, California, home where he was found dead.

If he had been married to Melanie, she would not have necessarily received all of his money and property, unless Aaron had no other living relatives. If Aaron did not have a son, his parents would have been next in line to inherit his estate.

Unresolved Issues in Aaron Carter’s Estate

While Aaron’s family has indicated there will not be family inheritance drama, it is uncertain who will manage the money on Prince’s behalf while he is a minor. In California, an individual cannot inherit property in their own name until they reach age eighteen.

California law provides for what is known as a guardianship of the estate to be set up when a child inherits more than $5,000 and their benefactor has not set up a trust to hold the funds. Typically, the court appoints the surviving parent to be the guardian of the child’s estate.[7]

One candidate who could look after the inheritance for Prince is Aaron’s twin sister, Angel Carter. Angel filed a petition in December 2022 to become the administrator of Aaron’s estate. As estate administrator, Angel would serve as Aaron’s legal representative, in charge of closing his accounts, paying off his debts, and distributing assets to Prince. Another candidate to watch over Prince’s inheritance is Jane Carter, but she is less likely to be chosen given the allegations that she mismanaged her own son’s money. A family court found Prince’s mother, Melanie, fit to take custody of Prince at a December hearing, and a court could decide that she is also fit to look after his inheritance until he turns eighteen. However, she will have to petition the court to become the guardian of Prince’s estate. Additional family members could also submit petitions, and the court would then decide which one of them is best able to manage the inheritance for the child.

The court could order one of the following:[8]

●      A guardianship must be created and Prince’s money must be turned over to the guardian.

●      The money must be invested with the County Treasurer.

●      The money must be deposited in a blocked account or a single premium deferred annuity, with withdrawal permitted only by court order.

●      All or part of the money must be turned over to a custodian under the California Uniform Transfers to Minors Act, which allows a court-appointed custodian to manage the minor’s account without a guardian or trustee until the minor turns eighteen.

A guardian of Prince’s estate would be required to carefully manage his money and property, make smart investments, collect and inventory estate accounts and property, maintain accurate financial records, and regularly file financial accountings with the court. A court order is required to make many types of guardianship financial transactions. The guardianship can be removed and transferred when the court deems it is in the child’s best interest.

Take Control of the Future with Estate Planning

Those close to Aaron Carter say he would have wanted Prince to have everything. Fortunately, it appears that his final wishes coincide with state law—but that is not always the case. Not having a will and other important estate planning documents can also increase the odds of family infighting over a decedent’s money and property and the care of surviving minor children.

About two-thirds of Americans do not have an estate plan, leaving the fate of their money and property up to state law in the event of disability or death; and in some cases, the decision of who will care for their children will be left to the court. Even a simple will can address many of these problems.

Our estate planning attorneys can help you put your final wishes and instructions into written documents that have the force of law. We can also help with issues related to guardianship, custodianship, and other court petitions. To set up an appointment, please call or contact us.

The post Aaron Carter: A Life Gone Too Soon appeared first on Law Office of Ruby Steinbrecher.

There is no questioning the legacy of one of rock and roll’s biggest icons. But there are still unanswered legal questions about the fate of Meat Loaf’s estate. Many stars, including Jimi Hendrix, Aretha Franklin, Prince, and Michael Jackson all died without wills, sparking long legal battles among surviving family members. Although there is no evidence to suggest that Meat Loaf died intestate (i.e., without a will), we can speculate about his estate plan based on his life, legacy, and available legal instruments.

The Rise, Fall, and Rise Again of Meat Loaf

Meat Loaf titled his 1999 autobiography To Hell and Back.[1] Described as a “rages-to-riches-to-rags-to riches” tale, it encapsulates a life that seemed to have few dull moments.

Many would describe Meat Loaf’s style as theatrical, and he may have been taking cues from his early career as a stage actor. Meat Loaf appeared on Broadway in Hair and The Rocky Horror Picture Show, and in the Rocky Horror film, before releasing his first album, Bat Out of Hell, in 1977.

The album became the third-best-selling album in history, but success sent Meat Loaf into a downward spiral of drugs, erratic behavior, and broken relationships. In 1983, facing dozens of lawsuits from his musical partner, Jim Steinman, over song rights, Meat Loaf filed for personal bankruptcy.[2]

From there, Meat Loaf slowly ascended once again to the top of the entertainment world. He reconciled with Steinman, and the two collaborated on the successful comeback album, Bat Out of Hell II. By the time of his death, Meat Loaf had appeared in hundreds of TV shows, endeared himself to a younger generation of fans thanks to his movie roles in Wayne’s World and Fight Club, married twice, and had two children.

Meat Loaf and Estate Planning Issues

Although Meat Loaf’s $40 million net worth[3] is relatively small compared to the richest celebrities in the world, it is still a considerable inheritance to leave behind. Presumably, his fortune will go to his second wife, Deborah, and his two daughters from his first marriage, Pearl and Amanda.

Meat Loaf adopted Pearl when she was a young child. Pearl’s half sister, Amanda, is six years younger than Pearl. Because Meat Loaf was known for giving money to charities, he may also have included charitable giving in his estate plan—assuming he had one.

Our estate planning attorneys hope that Meat Loaf did have a plan in place, and that at a minimum, it addresses the following issues.

Estate Tax and the Lifetime Exemption

While most people do not have to worry about the federal estate tax, it can come into play for high-net-worth individuals like Meat Loaf if they fail to take measures to avoid it by thoughtful estate planning.

In general, the estate of an individual who dies in 2022 is not subject to the estate tax if their estate is worth less than $12.06 million. The amount of the lifetime gift tax exemption is tied directly to the estate tax. By giving away gifts over the course of their lifetime, a taxpayer can reduce the value of their estate at their death and avoid or reduce the estate tax, but certain gifts also reduce the taxpayer’s remaining estate tax exemption at death. However, a married couple can combine their exemption amounts because the first spouse’s remaining estate tax exemption can be “ported over” or transferred for the surviving spouse to use during their lifetime or at their death.

An estate worth $40 million, such as Meat Loaf’s, will owe estate tax. However, there are ways to avoid or defer paying the tax. One way would be to use the unlimited marital deduction to leave everything to his wife. This option allows someone to transfer all of their assets (accounts and property) to their US-citizen spouse at any time—including at the time of their death—without incurring gift or estate tax.

Using a bypass trust is another way to avoid the estate tax. In this case, Meat Loaf could have created a trust to hold an amount equal to his unused individual lifetime exclusion amount ($12.06 million), with any excess passing to his wife either outright or through a marital trust, therefore bypassing estate tax liability. Meat Loaf’s wife would probably be a beneficiary of the bypass trust, so this approach is just a variation of leaving everything to her. Though this structure is more restrictive than a 100 percent outright distribution, it can offer some creditor and asset protection benefits.

Adopted Children and Children with Different Needs

Under the law, adopted children are treated the same as natural-born children. Most parents of adopted children agree with this stance, and there is no indication that Meat Loaf would have wanted to depart from it.

Some parents, though, treat their children differently in their estate plan, not because they do not care for them equally but because the children have different needs. Such differences can be reflected in the estate plan.

For example, Meat Loaf’s daughter Pearl is married to a member of the band Anthrax. In fact, Pearl is a musician herself. Not only does she have her own band, she also toured with her father for several years. It is a good guess that, between herself and her husband, Pearl is already financially well-off and not dependent on her father’s inheritance.

Her sister, Amanda, an actress who has appeared in popular TV shows and movies, is probably not hurting for money either. But if one sister was financially successful and the other was not, Meat Loaf might have made a provision in his estate plan that directed a larger share of his assets to the child with greater financial needs.

Blended Families

Blended families can prove challenging in both life and death. Someone with children from a previous marriage might have to balance wanting to provide for their children and for their spouse. Specifically, there might be concerns that if all the money were left to the current spouse, who is not the parent of children from a previous marriage, the spouse might not feel obligated to take care of those children.

For someone like Meat Loaf who may have been in this situation (there is no evidence that he was; this is just to provide an example), a qualified terminable interest property (QTIP) trust might be a solution. A QTIP trust can be structured in such a way that Meat Loaf’s wife would receive income from the trust property throughout her life, but when she passed away, the remainder of the trust assets would go to Amanda and Pearl, and his wife would be prevented from excluding them. In other words, if Meat Loaf had set up a QTIP trust, the funds would be distributed according to his wishes; his wife could not control the disposition of the remaining funds at her death.

Instead of setting up a single or “pot” trust for multiple beneficiaries, Meat Loaf could have chosen instead to establish multiple trusts that took immediate effect at the time of his death. Such separate subtrusts, or testamentary trusts, can be created for separate family members to simultaneously meet their individual needs.

There is some evidence that Meat Loaf used trusts, so he may have created living trusts that distributed assets during his lifetime. Variety reports that Meat Loaf and his wife held at least two homes in the same trust.[4] It could be that when Meat Loaf died, the property in this joint trust became his wife’s exclusive property.

Meat Loaf’s Plans Could Remain Private

The fate of Meat Loaf’s estate may be revealed in time. If the estate has to go through probate (for example, if Meat Loaf still owned assets in his individual name instead of in a trust, with no beneficiary designation, or if he used a will-based estate plan with no trusts), the probate records will become public. But if Meat Loaf properly funded and used trusts to his advantage, the details of his plan are unlikely to enter the public record, and we may never know what became of his $40 million fortune.

If he did not have an estate plan, state intestacy law would apply. Meat Loaf owned homes in multiple states, including California, Tennessee, and Texas, but it appears that he died as a resident of Tennessee. This means that a Tennessee probate court would oversee the domiciliary proceeding while California and Texas would have jurisdiction over the real estate subject to any ancillary proceedings there. In addition, the laws of the state where real estate is physically located typically govern what happens to that property when the owner dies, possibly resulting in different dispositions of property in certain circumstances.

Though intestacy laws are intended to accomplish what a state assumes the decedent would want, dying intestate is often a worst-case scenario because the decedent effectively loses all control over the details of their legacy. But it is not just celebrities who require an estate plan. Everybody should have, at the least, a basic will that outlines which assets go to whom. Beyond that, there are many ways to divide assets among trusts. Through savvy estate planning, individuals of any net worth can take control of their legacy, avoid estate taxes, and provide for loved ones long after they are gone.

For help and guidance designing your estate plan, please reach out to our office and schedule an appointment.

[1] David Dalton & Meat Loaf, To Hell and Back: An Autobiography (2011).

[2] Richard Milner, The Crazy Way Meat Loaf Was Stripped of His Money, Grunge (Jan. 21, 2022, 10:14 AM EDT), https://www.grunge.com/250486/the-crazy-way-meat-loaf-was-stripped-of-his-money/.

[3] What Was Meat Loaf’s Net Worth?, Celebrity Net Worth, https://www.celebritynetworth.com/richest-celebrities/singers/meat-loaf-net-worth/ (last visited Apr. 27, 2022).

[4] Mark David, Meat Loaf Moves to Texas, Dirt (May 29, 2012, 6:29 PM PT), https://www.dirt.com/more-dirt/real-estate-listings/meat-loaf-moves-to-texas-1203471733/.

The post When Rock Legends Pass Away: The Possible Fates of Meat Loaf’s $40M Estate appeared first on Law Office of Ruby Steinbrecher.

A trust is an important planning tool used to provide this protection. In its basic form, a trust is a formal relationship in which someone (the trustmaker) appoints someone else (the trustee) to hold title to and manage the trust accounts and property for the benefit of one or more people (the beneficiaries). In most cases, when people refer to a trust, they are usually referring to the document that outlines the trust details. Depending upon the type of trust that is created, it can be used for many purposes, such as protecting the trustmaker’s accounts and property from the trustmaker’s creditors, divorcing spouses, and lawsuits, as well as providing for the trustmaker’s family if the trust maker passes away.

Everyone needs estate planning and could possibly benefit from the use of a trust as part of that planning—even famous athletes. The following are some notable athletes whose use of trusts to protect themselves and their loved ones offers important lessons.

Allen Iverson

Allen Iverson, also known as “The Answer,” played professional basketball from 1996 until his official retirement in 2013. During his career, he played for a number of professional teams such as the Philadelphia 76ers, the Denver Nuggets, the Detroit Pistons, and the Memphis Grizzlies. Over the course of his career, it is estimated that he made over $200 million (including contracts and endorsements). However, in 2012, it was rumored that Iverson was experiencing financial troubles due to an outstanding creditor issue.

But there was a saving grace. As part of a deal he signed with Reebok in 2001, Iverson currently receives $800,000 per year and had a lump sum of $32 million placed into a trust, which will become accessible to him when he turns fifty-five years old (which will be in 2030). Although the specific terms of the trust have not been disclosed, and his ex-wife may be entitled to half of the trust, this strategic planning has protected a large part of the Reebok contract for Iverson’s future use and enjoyment.

Lesson: Saving for a rainy day is an excellent strategy, and a trust can be a great way to set aside money or property for a future date. Additionally, it is never too late to get a proper estate plan in place. Depending upon his current legal situation and the terms of the existing trust with Reebok, Iverson should meet with an experienced estate planning attorney and financial advisor to develop an asset protection strategy for this money before the first disbursement is made. Through proper investment and management, this money should be able to go a long way toward ensuring a happy retirement.

Michael Carter-Williams

Currently playing for the Orlando Magic, Michael Carter-Williams made headlines in 2013 when he decided to put the salary he received from the Philadelphia 76ers into an irrevocable trust to be managed by his mother and a close family friend. Instead of his salary, he lived off his endorsement deals. Per the terms of the trust, Carter-Williams would not have access to the money for three years.

Using a trust in this manner was a unique move because Carter-Williams was relatively young, did not have a family of his own to support, and did not have any creditor issues. This strategy was a thoughtful financial decision in light of what was happening in the industry at the time. While not much is known about the status of the trust, with the proper oversight by his trusted advisors, this trust can offer him a source of income whenever he may need it.

Lesson: An estate plan is not a one-size-fits-all product. With the multitude of planning strategies available, an experienced estate planning attorney can craft a plan that will provide what you need for today and tomorrow. During the estate planning process, it is important to consider your priorities. Are you looking to avoid a potentially large tax burden; protect your accounts and property from lawsuits, creditors, or a future divorcing spouse; or protect the inheritance you are leaving your loved ones after you have died?

Kobe Bryant

The legendary professional basketball player Kobe Bryant died on January 26, 2020, in a tragic helicopter accident that also claimed the life of his daughter and other passengers. With an estate worth over $600 million, proper estate planning was crucial in making sure that his wife and children were cared for.

There are few details about the extent of his estate planning for one very good reason: he had an estate plan. The only misstep in the estate planning process was Bryant’s failure to update the Kobe Bryant Trust upon the birth of his youngest child. According to court documents, the trust had been amended each time one of his children was born, but because his youngest child was born in June 2019, he had not amended his documents as he had done in the past prior to his death.

Lesson: Estate planning is not a one-and-done task. To ensure that your wishes are carried out in the best possible way, the documentation must be up to date. Once you have signed your estate planning documents, we encourage you to review them each year. Ask yourself the following questions:

• Have there been any marriages, divorces, births, or deaths that might affect my estate plan?
• Are the individuals I have chosen as my trustee, guardian for my minor child, agent under a power of attorney, or healthcare decision-maker still the individuals I want?
• Do I want to change the types of items or amount of money that I am leaving to my beneficiaries?

We Are Here to Help

Estate planning can be difficult. It forces you to evaluate aspects of your life that may not be ideal. However, by diving in and addressing these concerns, we can help you craft a unique estate plan that will protect you during your lifetime and provide for your loved ones upon your death. Give us a call today to schedule your in-person or virtual consultation.

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