SINGER LOU REED COULD HAVE USED A PRIMER ON TRUST MATTERS

Florida residents have almost certainly heard the Lou Reed song that instructs listeners to “take a walk on the wild side.” It seems that Reed himself may have followed that example in his own estate plans. Would you believe that his estate already earned more than $20 million since Reed died in October 2013? Yes, that only counts income that arrived after the man’s death. That is certainly a lot of money. Managing that type of an estate is no easy task, but it could be made easier — and more private — through the use of a trust.

We say that Reed took a “walk on the wild side” because he used a 34-page will instead of relying on a revocable living trust. No one seems to know why Reed took that path, which could make some of his estate’s earnings vulnerable to additional taxes. At least one revocable living trust could have allowed Reed to transfer many of his assets into the trust during his lifetime.

The benefit for celebrities: When they use trusts, their estate information is kept out of the public eye. A revocable living trust would have allowed Reed’s estate to be administered privately — but a will requires a trip to probate court, and it makes Reed’s finances open in the public record. Administration of a trust could help avoid that unpleasantness altogether.

A revocable trust may not be the right decision for every estate, but this type of legal shelter can help protect some people’s assets from taxes and other claims. Trusts are often easier to administer than a general will. Those who are drafting an estate plan should consider the role that irrevocable and revocable trusts can play in their own plans for the future.

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Written by Luis E. Barreto

Luis E. Barreto

Luis is a probate and guardianship litigator with over 23 years of experience in the field. Determination of heirs, will contests, breaches of fiduciary duty, removal of personal representatives, guardians and trustees are just some of the types of litigation he addresses. In addition, he administers non-contested estates and guardianships.