In any comprehensive estate plan, a letter of instruction (LOI) is an important component. An…
Have You Read Lou Reed’s Will?
Lou Reed relied on a will which he signed sometime in April 2012. It was a 34-page will, but a will nonetheless. :
“Gotterer one of the two co-executors of Reed’s estate filed a report with the Surrogate’s Court several days ago, reporting the income and an update on the inventory of the estate. Reed’s estate has already earned $20,370,169 since he passed away. This is only the income that the estate has brought in since his death, from his copyright, publishing and performance royalties and other deals put together under his management. There are however, other assets of approximately $10 million, set aside for Reed’s wife and sister, along with $500,000 left to his sister for her to use for the care of their 93-year old mother, in her discretion. Reed’s wife, Laurie Anderson, and his sister, Margaret Reed Weiner, receive 75% and 25% of the residual of his estate, with the personal property and almost $9 million worth of real estate in New York passing to Anderson alone.”
The question is, why would someone with assets worth tens of millions of dollars rely on a will, instead of a revocable living trust (at least)?
There is no good answer. Because Lou Reed relied on a will he signed, The New York Post was all over the probate filings in Reed’s estate, breaking the news on the specific details of who gets what. This gave the opportunity for all media outlets across the nation to release their own story about the value of Lou Reed’s estate.
This situation could have been prevented if Mr. Reed had used a revocable living trust, and moved his assets into the trust during his life, which would results in all of this personal information being kept private.
This is the key difference between wills and trusts. Wills must pass through probate court to work, which is a public process and trusts, when sued the right way, avoid the probate court entirely.
Although, normal people don’t have to worry about the press leaking details of their financial status, it is in everyone’s best interest to avoid probate court. On top of being public, it’s also expensive, time-consuming, stressful, and more. What if there was a conflict and Reed’s sister felt she should get more than 25% of his publishing income or what if Reed’s wife wanted everything?
Well, it’s much easier to file objections or challenges to a will in probate court, than a trust which is administered privately. It is also much simpler for anyone to leave detailed instruction with specific instruction, conditions, limitations, and suggestions.
Reed knew he was suffering from liver disease and signed his will about a year before he passed. In this time, he should have changed his plan to include a revocable living trust. This would have avoid the entire media leak and aggravation of probate court.
So continue listening to the trendy song, but when it comes to planning your estate, don’t take a walk on the wild side. Get professional help and do it right!
By Daniel Mayper – Guest Blogger
This Post Has 0 Comments