David Bowie — Estate Planning Genius!

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On January 10, 2016, the world lost a music icon. David Robert Jones, also known as David Bowie, passed away from liver cancer just two days after his newest album, “Blackstar“, was released. Bowie’s legacy will always be remembered through his music, but what most people do not know, is that Bowie was also an estate planning genius.

In the 1970s & 80s, Bowie suffered hard financial times. It was even reported that Bowie was on the verge of Bankruptcy. In 1997, As Bowie was contemplating his financial options, he met with investment banker David Pullman who turned him on to an amazing idea.

Pullman convinced Bowie to sell a stake in his music, but only for a short time. Pullman helped Bowie create “Bowie Bonds,” whereby Bowie sold rights to his music for a 10-year period for $55 million, and Bowie promised a fixed-rate of return of 7.9%. The Bowie Bonds were secured though Bowie’s royalties and copyrights of his own music. Prudential Insurance Company purchased the bonds and was paid in full during the 10-year time frame. In 2007, Bowie retained the rights to all of his own music.

The amazing thing about Bowie’s revolutionary estate planning move related to Bowie’s motives. In a recent interview, Mr. Pullman emphasized the fact that Bowie created these bonds, not for his own benefit, but to ensure that his wife, Iman, and his two children would be set for the rest of their lives.

Bowie’s current estate is thought to be worth more than $200 million (although a recent estimate put it closer to $100 million), with almost half of his estate going to his wife Iman, almost half to his children, and a few specific bequests to friends. It appears Bowie used a Will and not a Revocable Living Trust in his estate plan, but this could change as we learn more about Bowie’s plan. Either way, Bowie used powerful planning strategies to save his family from the verge of financial ruin.

We should all follow Bowie’s lead and protect our own families with a thoughtful estate plan.
If you have any estate planning questions, please feel free to call us at (908) 236-6457, or email me at alec@bmcestateplanning.com.
Thanks for reading!

Paul Walker’s Will & Why It Matters

paul walker nj estate planning

The Last Will of Paul Walker

Like many celebrity deaths, Paul Walker’s passing was sudden and tragic. Known for his starring role in The Fast and the Furious movie franchise, Walker was killed on November 30, 2013 in a fiery car accident. Initially, police reports cited speeding as the cause — the Porsche Paul Walker died in was believed to be traveling at more than 100 miles per hour.

Several months later, the widow of Roger Rodas, the man driving the Porsche at the time of the crash, filed a wrongful death lawsuit claiming that vehicle malfunction — and not excessive speed — caused the death of her husband and Paul Walker. In addition, Paul Walker’s father recently filed to have his son’s estate opened.

Consider the following lessons you can learn from Walker’s estate planning and last will:

  • Revocable living trusts — The probate process revealed that Walker had around $25 million in assets when he passed away. Additionally, the probate filing showed that Walker had set up a revocable living trust with his daughter, Meadow, named as the sole beneficiary. By creating a revocable living trust for Meadow, Walker ensured that probate would be much simpler and that the details of the trust would remain confidential. At the same time, setting up a revocable living trust is not always the best option for your estate plan.  It’s important to speak to an estate planning attorney to make sure you create the device that works best for you.
  • Guardianships — Another lesson we can learn from Paul Walker is the value of guardianships. In his will, Mr. Walker named his mother as guardian over his daughter Meadow. Although Meadow now lives with her own mother, if her mother passes away, becomes incapacitated or is deemed unfit, Meadow’s paternal grandmother assumes guardianship.
  • Estate planning — A common misconception about estate planning is that only those approaching the age of retirement need to worry about creating estate plans. In fact, anyone with significant assets or beneficiaries to whom he or she intends to leave assets should have a plan in place. Responsibly, Paul Walker signed his will in 2001, when he was just 28 years old.
  • Updating your will — One mistake Paul Walker made regarding his estate plan is that he never updated his will. His death came 12 years after he created the will, during which time could have decided to leave assets to his girlfriend and/or parents in addition to his daughter.

Carefully planning your estate is more than just a courtesy to your loved ones — it’s a responsibility. To ensure that your wishes are accurately and effectively carried out, seek help from a qualified attorney when preparing your will and other estate documents. Learn more about wills, trusts and probate in Springfield, Union County, or elsewhere in NJ — email Alec Borenstein, Esq., a partner with the firm, at alec@bmcestateplanning.com or call 908-­236-­6457 today.

Tony Soprano’s Estate Planning Advice

James Gandolfini Estate Planning

Tony Soprano’s Estate Planning Lesson

James Gandolfini, an incredibly talented and versatile actor best known for his portrayal of fictional New Jersey mob boss Tony Soprano, passed away on June 19, 2013 from an unexpected heart attack. In episode 44 of The Sopranosthe hugely successful HBO show in which he starred, Gandolfini’s character consults a CPA (certified public accountant) about estate planning.

While discussing the future of his estate and family with his CPA, Gandolfini’s character is told that an irrevocable living trust — a document his wife Carmela has urged him to sign — is a red flag. The CPA goes on to inform the fictional mob boss that a revocable living trust, however, keeps your estate plan private. Yet in real life, James Gandolfini left behind a 17-page last will and testament that anyone can read. Additionally, the esteemed actor also created an irrevocable life insurance trust for his son, Michael.

Four important lessons can be learned from the way both Tony Soprano and James Gandolfini planned their estates:

  • It is never too soon to create your will — James Gandolfini signed his 17-page last will and testament on December 19, 2012, only six months before his death. Imagine if he had waited longer. No one wants to ponder his or her own mortality, but setting up a solid estate plan ensures that the people you care about most will enjoy your legacy as fully and as immediately as possible.
  • Revocable living trusts provide privacy — The fictional CPA who advised Tony Soprano to create a revocable living trust to ensure privacy was right. Shortly after James Gandolfini’s real will was filed with New York Surrogate’s Court, it became viewable online to anyone, free of charge. By creating a revocable living trust, Gandolfini could have assured that his last wishes would remain private.
  • Wills must be updated — James Gandolfini updated his will a few months after his daughter Liliana was born. Had Gandolfini failed to update his will prior to her birth, it may have excluded Liliana and she may have been unintentionally disinherited. A will is not a one-and-done document. Rather, it should grow and evolve with your life. If you have a will, follow in Mr. Gandolfini’s footsteps and be sure to update it after important life events such as marriage, divorce, births and deaths.
  • There is no substitute for a lawyer — Tony Soprano obtains legal advice from a CPA at a racetrack while his wife consults her cousin Brian, a financial advisor. Both of those positions are vital as you consider your estate plan.  They belong in the universe of the work that you do and you need them to make sure you are fully protected.  At the end of the day, you also need an attorney to ensure you are protected legally, as well as financially.

The sudden death of James Gandolfini was a severe blow to many — the Hollywood community, fans and most of all, the actor’s family. Fortunately, Mr. Gandolfini had a thoughtful estate plan in place, so his loved ones were provided for. If you have questions about creating a will, trust or estate plan in Union or Hunterdon County, email Alec Borenstein, Esq., a partner with the firm, at alec@bmcestateplanning.com or call 908-236-6457.

Are you wild enough? Lou Reed answers Revocable Trust or Will?

Revocable Living Trust or Will in NY

Revocable Living Trust or Will? Lou Reed Answers

I recently read an article in Forbes about Lou Reed’s estate plan.  The gist of the article was an argument for using a revocable living trust (especially in New York) as opposed to a will for transferring and protecting assets.

Specifically:

If Lou Reed had used a revocable living trust, and transferred his assets into the trust during his life, then all of this information would have been kept private.  No one would know how much he had, whom he left it to, or how much his executors were charging.  That’s a key difference between wills and trusts.  Wills have to pass through probate court to work, which is a public process.  Trusts, when used the right way, avoid probate court entirely.

While most people don’t have to worry about the press leaking details of their financial worth, everyone should strive to avoid probate court.  On top of being public, it’s also expensive, time-consuming, stressful, and more prone to family fighting.  What if Reed’s sister felt she should get more than 25% of his publishing income?  What if Reed’s mother claimed more money for her care?  What if Reed’s wife wanted everything?

It’s much easier to file objections or challenges to a will in probate court, than to a trust which is administered privately, outside of probate court.  Further, it’s much simpler for anyone to leave detailed instructions, with conditions, limitations, and suggestions, in a comprehensive trust document, rather than a will — even one that is 34 pages long.  In fact, trusts can even help you when you are alive, but before you die, by addressing who and how your assets are managed if you are no longer able to do so.  Wills can’t help with that.

These are powerful arguments assuming that you want to keep your will private (most of us don’t care) and your will does not do what you want it to do.  For many of us, however, the differences are negligible considering the fact that probating a will in New York or New Jersey is less complicated that it might seem.

Nevertheless, if you go the revocable living trust route there are important points to keep in mind.

First, you have to re-title your assets in the name of the trust.  For many, a trust sounds like a great thing until they realize there is a lot paperwork up front.

Second, there are no differences from a tax perspective.  You will not save taxes using a revocable living trust.

If you keep these ideas in mind and really do want to avoid probate then create a revocable living trust – but either way might lead you to take a walk on the wild side.

On that note –

If you’re looking for estate planning attorneys in Union County or Hunterdon County, New Jersey, please email Alec Borenstein at alec@bmcestateplanning.com.

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