Bravo to fellow Floridian and legendary actor Burt Reynolds, who put in place a smart estate planning strategy before his recent death at age 82. Here’s 3 takeaways from his estate:
He had a Will and Trust. So many celebrities who have passed away recently had no estate planning documents in place. That can lead to expensive litigation and nasty public battles as heirs fight over assets, not to mention millions of dollars wasted paying estate taxes to the IRS and state taxing authorities that could have been avoided through proper planning.
The Lesson: Talk to an estate planning attorney as soon as possible about drafting basic documents. You can always amend them later if your situation changes. Proper documents are absolutely essential for everyone, but especially if you have minor children, blended families, sizable assets, or complex situations.
He kept it private. Reynolds had already been put through the tabloid mill as a result of various romantic and financial entanglements. The last thing he wanted is more public scrutiny of his financial affairs. By drafting a Trust, he was able to keep it all private. Unlike Wills and the whole Court-directed probate process, which are public, Trusts are private documents. What you own, who you give it to at your death, and all those other details stay exactly that … private. In contrast, a Will and any assets that pass through the Court probate system become very public.
The Lesson: Consider drafting a Trust. Trusts keep the details of your assets away from disgruntled relatives and nosy neighbors. Plus, a Trust protects you if you become ill and unable to handle your own affairs.
He protected his assets. Reynolds ran into severe financial problems a few years ago. If his remaining assets had been distributed to heirs under the terms of his Will, they might have become accessible to creditors and lost while passing through probate. We’re not sure what Reynolds left to his adopted son and other friends and family (his assets were estimated at about $5 million), but proper use of estate planning techniques and beneficiary designations could have ensured his assets went to heirs instead of creditors with claims against the estate.
The Lesson: Sure, you can save money by asking that jack-of-all-trades neighborhood attorney who advertises on the bus stop bench to advise you, but it will be a savings you may later regret. Expert estate planning advice need not be more expensive than the cheaper, less experienced version. Back when we handled trusts and estates for a large bank, we saw some amazingly expensive goofs caused by bad legal drafting and dumb mistakes. As your assets and complications grow, so do your legal needs. Heed Burt Reynolds’ example: smart planning can ensure assets go quickly and easily to your loved ones, instead of to creditors and tax collectors.