by Nat Barouti
“What happens to all my stuff when I’m gone?” If you don’t have your financial affairs in order, the government will decide how your assets get distributed. Imagine a complete stranger coming into your home and dividing your assets among family members you don’t even talk to. Scary, right? Luckily, there are two legal documents you can prepare that designate who oversees your estate and who it will be distributed to.
A revocable trust is a legal instrument that determines who your assets will be distributed to after death. As the creator of the trust, you select a trustee—the person or persons (you can name two co-trustees) who will manage your affairs after death. As the word dictates, a “trustee” should be someone you trust. The trustees divide the assets that are owned by the trust to your beneficiaries. The beauty of a trust is that you set the conditions of when and how a beneficiary can receive their share. Many clients specify age restrictions in the case of minor children or beneficiaries who are financially irresponsible. Others want to ensure that their beneficiaries are not using drugs or alcohol and may require the trustee to administer random drug tests. You are entitled to put any guidelines you wish into a revocable trust and it gives you the option to make changes (e.g., remove a trustee or change beneficiaries) as your life changes.
If you don’t have a trust, the probate court will distribute your assets according to the laws of the state you reside in. More often than not, your family members will inherit everything, as occurred when Prince passed away. His empire was divided amongst his surviving siblings, but they had to endure a very complicated court proceeding. Typically, probate matters can take between six months and two years, plus the expense of hiring an attorney and paying court costs. In some states, the filing fee alone is around $500.
What are considered assets? Besides money, real estate, and retirement accounts, it’s important for celebrities and personalities to properly protect their image rights, the control of the commercial use of your identity. Since the right is a property, it can be passed on to your heirs after death. So if others use it for commercial gain, your estate can seek damages. The Celebrities Rights Act, passed in California in 1985, extended these rights to 70 years after a celebrity’s death... READ MORE