Many New Jersey readers are likely familiar with the life and artistic work of singer and guitarist Lou Reed. Once the frontman for The Velvet Underground, Reed had a long and prolific musical career that amassed a significant fortune. His death in 2013 and his questionable estate-planning choices have opened up the musician’s financial affairs for the world to see. Hopefully, a glimpse into the estate as it moves through probate will teach others of the importance of creating a solid estate plan, no matter what their level of personal wealth.
Reed drafted a 34-page will to guide the distribution of his assets. However, he failed to create a revocable living trust, which would have provided far better guidance for his heirs and eliminated the need for the estate to go through the probate process. Because there was no such trust in place, the details of his financial affairs are now available as public knowledge. The press has reported most of the details of what the musician earned and how those assets are set to be distributed. Reed’s widow and sister are designated as the primary heirs.
The estate is currently going through the probate process. Two executors have been appointed, one of whom was a close friend of Reed’s who also served as his manager. Under this man’s guidance, the estate has earned more than $20 million just in the time since Reed’s death. The executors are only asking for $220,000 in fees for managing the estate, which is far less than what is normally charged for those services.
In this case, it appears that everyone involved is working together to move through the probate process. If that trend continues, the matter could be resolved with relatively little contention and strife for those Reed left behind. However, the musician’s choice to rely on just a will and forego a revocable trust has left his financial affairs open to public scrutiny, a scenario which his loved ones are likely not enjoying. Had the parties involved contested the will or struggled over the various assets held within the estate, the outcome might have been far worse than Reed could have imagined. New Jersey residents can learn from this example and should consider if their own estate plans are similarly flawed.
Source: Forbes, “Lou Reed Walked On The Wild Side With His Estate Planning“, Danielle and Andy Mayoras, July 10, 2014