Maybe we shouldn’t be surprised. After all, Lou Reed was the man who famously crooned, “Hey babe, take a walk on the wild side.” The late lead singer and guitarist of The Velvet Underground — and of course, a musician and songwriter with a successful, decades-long solo career — may have been a bit wild at times. But that doesn’t explain why he would be so careless with his estate plan.
Lou Reed, the vanguard artist who sang “Take a walk on the wild side,” did just that when it came to his estate plan. With an estate worth more than $30 million, Reed could have spent a little less time walkin’ and more time with his estate planning attorney.
The recent Forbes article, titled “Lou Reed Walked On The Wild Side With His Estate Planning,” reports that the singer left assets of approximately $10 million for his wife and sister, along with $500,000 left to his sister to use in her discretion for their 93-year old mother’s care. Experimental performance artist Laurie Anderson, who was Reed’s wife, will receive 75% of the residual of his estate. Reed’s sister will get the remaining 25%. This could be more than $9 million worth of real estate in New York passing to Anderson alone.
Sounds pretty straightforward, doesn’t it?
According to Forbes, in April 2012, Lou signed a 34-page will. That is the extent of his estate planning … no trusts or other asset protection devices.
Reports are that Reed was fully aware of the fact that he was suffering from liver disease, as he signed the will 18 months before he passed. The article suggests that he should have updated his plan to include a revocable living trust, which would have allowed his family to keep this matter private, rather than having all of the financial details revealed in probate court and thereafter in the press. With a revocable living trust, you can move assets into the trust while you are living, and this information will remain private after your passing. Wills are required to be probated in court, a very public process. On the other hand, trusts, when set up by an estate planning attorney and “funded,” will sidestep probate court completely.
Another important aspect of a will versus a trust is that it is much easier to challenge a will in probate court than it is to object to the provisions of a trust which is administered privately. In addition, it is simple to leave detailed instructions, including conditions, limitations, and suggestions, in a comprehensive trust document instead of a will, no matter how long it is!
Trusts can be a benefit to you while you are alive and have the opportunity to determine how your assets are managed if you are no longer able to do so. That is not the case with wills. Do not be a music or estate planning rebel like Lou Reed—contact your estate planning attorney and see if a revocable living trust is a wise choice for your situation.
Reference: Forbes (July 10, 2014) “Lou Reed Walked On The Wild Side With His Estate Planning“