5. Leaving Assets Exposed
Here comes another NFL analogy: Just like a player wouldn’t step out on the field without a helmet, an estate plan for that same player should incorporate asset protection. Pro athletes typically own many material assets, such as real estate and a car collection, that could be targeted by creditors.
There are two tiers of asset protection. One is statutory protection, whereby in some states equity within a personal residence or cash build-up in an annuity or life insurance contracts are shielded from creditors by law.
The next tier is entity-based asset protection. This may come in the form of a business arrangement like an LLC or LP, or an irrevocable trust.
Why is asset protection so important? Think of the pro-athlete who made good money during his playing career, but now has no real assets due to lawsuits, divorces, or bad business judgment.
Don’t let that be you. Keep your estate planning team abreast of your life changes so that they can evaluate any likely pitfalls.
6. Failing to See the Bigger Picture
Every client faces that inevitable question: What will I do after I stop working? For pro athletes, that challenge comes much earlier in life than most.
Determining how you want your money to work and how you want to be remembered is a good question for all of us. Do you want to ensure that your grandchildren can pay for college without going into debt? Do you want to give back to a special charity? Should you pass before your children reach majority age, what will happen to them? Do you want that money to go to helping them buy their first home?
*Tip – You have worked hard to emotionally and financially support your family. Don’t let no estate plan or a bad estate plan ruin that legacy.
For more information about estate planning and administration, pleasecontact my office