Music fans in California may be interested in the execution of the estate of Lou Reed. According to reports, it has reportedly brought in more than $20 million since his death on Oct. 27, 2013. The probate court in Manhattan reported that the musician's estate is currently valued at more than $30 million.
Reed's former manager and another co-executor have overseen his estate. Careful management concerning royalties and other deals has tripled the estate's value. While executors usually seek a percentage of earnings they bring into the estate, the pair is only requesting $220,000 for their services. In stark contrast, Michael Jackson's executors received 10 percent of what they earned for his estate, including a $250 million deal with Sony.
About $10 million has been earmarked for division between Reed's widow and sister, with his widow receiving the lion's share of the New York property, valued at nearly $9 million. An additional $500,000 was also transferred to his sister to go toward the care of their 93-year-old mother.
However, the 71-year-old struggled with proper estate planning. Reed's entire estate was reportedly addressed through a 34-page will instead of trusts. This has allowed many sources to report on the size and changes to his estate's value and distribution, which would have been kept private if the assets had be pulled into a trust. Wills are also subject to probate court and fees, which can be costly and might substantially reduce the estate's value.
In an effort to avoid such problems, individuals who are interested in developing an estate administration plan might work with an attorney. An attorney who is familiar with different estate planning techniques might be able to help a client draft documents and build trusts that provide for family members with minimized fees and taxation.
Source: Forbes, "Lou Reed Walked On The Wild Side With His Estate Planning", July 10, 2014