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There are many tools available for planning an estate. The ones a person in Florida chooses will depend upon one’s specific circumstances. Although having something is usually better than nothing, if one chooses the wrong estate-planning strategy, it could cause significant problems down the line. It appears that Lou Reed had chosen a less-than-optimal estate-planning strategy by ignoring his need for trust planning.
Apparently, Reed, who was known as the lead singer and guitarist for the band The Velvet Underground, only had a will as his entire estate-planning strategy. Although for some people this may be enough, for Reed this may have been careless due to his estate being worth more than $30 million. Wills are processed through the probate court, which means that how his estate is distributed will be available for public records, which could be a problem for Reed and his family due to his own celebrity status.
However, besides being famous, only using a will can increase the likelihood of inter-family conflicts over how the estate is divided. A will can easily be challenged in probate court if a family member or beneficiary believes that he or she should receive a larger share of estate assets. Alternatively, a trust keeps the assets of the estate in a privately managed account, which helps to avoid details of estate distribution from being in the public eye. Also, trusts are significantly more difficult to challenge in court.
Luckily, for Reed, since his death there have not been any reported conflicts between family members or beneficiaries. However, many other people may not be so lucky if they fail to utilize trust planning strategies in order to deal with estate administration issues. It is best to start making these types of estate-planning decisions as soon as possible, since one never knows what may happen in the future in Florida.