A perfect legacy plan: the one thing Lou Reed could have done to protect his family
Lou Reed has a reputation for being a wild man of rock ‘n’ roll.
Heck, his signature tune even endorses a stroll on the less conventional side of the pavement.
But why did he have to go all wild when it came to making his legacy plans?
The lead singer and guitarist of the legendary band The Velvet Underground, who also had a snazzy career as a solo artist, could have been a bit more careful when it came to his legacy planning.
Reed died of liver disease on October 27, 2013, at the age of 71. He had an inkling the end of his life was near, so he made an extensive Will, some 30-odd pages long, in April, 2012.
Recent filings with courts in New York show that Reed had an estate worth more than $30 million.
In the Will, he left most of his estate to his wife, Laurie Anderson, and some to his sister, including money set aside to be used for their mother’s care.
There doesn’t seem to be much wild about this, does there?
Well, this might seem the case.
Even the fees for the administration of the estate are beyond sober and reasonable.
One of the executors of Reed’s estate, long term manager and friend, Robert Gotterer, together with his co-executor, were paid a relatively conservative fee of $220,000.
This might seem like a heap to those of us on the more modest end of the pay scale, but it is pretty comparatively reasonable. It’s reported the executors of Michael Jackson’s estate, for instance, receive a whopping 10% of whatever they bring in (including a recent 250 million dollar deal with Sony music).
So far, so good.
I agree. Reed: considered his wishes for his legacy and documented them. Tick. Chose someone outside of his family act as executor. Tick. Had a Will that was complex and drafted to specifically suit his needs. Tick.
Problem is, though, Reed relied on solely a Will for the realisation of his legacy plans.
He would have been heaps better off with a Living Trust.
What Is a Living Trust?
A Living Trust is a trust that can operate both whilst you’re alive and when you’re dead.
Basically, it’s an agreement that appoints certain individuals to take care of your estate when you can’t.
You might not be able to because you’re out of the country, sick or dead. In any case, the world will keep turning if a Living Trust is in place.
More than this, though, a Living Trust ensures you avoid probate.
Probate is the administration of your estate by the courts. It is on public record, so your mates at the pub, your enemies, your ex-lovers, teachers, spouses, employees, they can all access the information. For Lou Reed, this meant that publications like the New York Post were all over the details of Reed’s final wishes. Is nothing private these days?
Only if you have the right structures in place.
Massive family battles are also more likely to occur when an estate goes to probate. By not having a Living Trust, Reed ran the very real risk of his wife and sister fighting over assets.
Now, you might be thinking none of this relates to you because, unlike Reed, you merely jam at home in the shed out the back and your estate’s worth in the thousands rather than millions.
If your estate happens to go to probate, you risk:
a) lack of privacy
b) increased chance of family feuds
c) significantly increased legal costs, time wasting and stress.
So, if you’re planning to go all wild like Lou Reed when it comes to planning your estate, think again.
Create a Living Trust with a lawyer, and make sure you and your family have peace of mind.
Which, as we all know, means many a perfect day.