If either Lou Reed or Philip Seymour Hoffman had used a revocable living trust, and transferred assets into the trust during their lifetimes, then all of their estate information would have been kept private. Unless heirs wanted the publicity, no one would have known how much they had, whom they left it to, or any other information.
By Stephen K Lehnardt
When a celebrity passes away, reporters scramble to find out how much money the celebrity had, how it will be distributed, and how much controversy they can splash the headlines with. But how exactly are they getting the information? Is it in-depth investigative journalism ... or simply a common estate planning mistake?
Recently, the New York Post has had story after story about the specific details of Lou Reed's estate plan. We know how much he had when he passed away. We know how much money his intellectual property interests have earned for his estate since he passed away. We also know how much money each of Reed's heirs will receive. How do we know so much?
Stories of Philip Seymour Hoffman’s will and the projected effects on his children’s lives also continue to skip across the media. The same pattern was played out with Whitney Houston, Michael Jackson, Farrah Faucett, Princess Diana, and Former U.S. Supreme Court Chief Justice Warren Burger. The details for these and many others is easily found prominently archived on the internet.
As the Forbes article, “Lou Reed Walked on the Wild Side With His Estate Planning,” points out, we know what we know about Lou Reed's estate because his entire estate plan consisted of a single will. That will had to be submitted to the public probate process, which, in turn, allowed reporters to gain total access to the details. If Reed had used a different estate planning tool, such as a Revocable Living Trust or Irrevocable Trust, it would be much more difficult for reporters to find out the details.
You might not care whether your estate is made public after you pass away, since you will not be around to deal with any consequences. However, you should consider whether your heirs would want other people to know exactly how much they inherited. It might violate their privacy.
For more information in Liberty, MO and the Kansas City Area about effective estate planning and to access free information and tools to organize your estate, visit our elder law and estate planning website.
Reference: Forbes (July 10, 2014) “Lou Reed Walked on the Wild Side With His Estate Planning”