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Why You Should Consider a Revocable Trust

** This article has been revised from its original version which was published on August 8, 2014.

Musician, songwriter, and poet Lou Reed relied on a last will and testament, which he signed sometime in April 2012. It was a 34-page will, and all the details were made public as follows:

There were two co-executors of Reed’s estate. One of them filed a report with the Surrogate’s Court (probate) after his death, reporting subsequent income and updates to the estate inventory. Reed’s estate had earned $20,370,169. It was the only business income the estate brought in after he passed. There were, however, other assets of approximately $10 million, set aside for Reed’s wife and sister, along with $500,000 for the care of their 93-year-old mother. Reed’s wife and sister received 75% and 25% of the remainder of his estate, including personal property and almost $9 million worth of real estate in New York.

Why Didn’t Reed have a Revocable Living Trust?

Why would someone with assets worth tens of millions of dollars rely on a will instead of a revocable living trust?

As estate planning attorneys in New York, we assure you there is no good answer. Because Lou Reed relied on a will he signed, The New York Post was all over the probate filings in Reed’s estate, breaking the news on the specific details of who received what. This allowed all media outlets nationwide to release their own story about the value of Lou Reed’s estate.

This situation could have been prevented if Mr. Reed had a New York estate plan that used a revocable living trust, moving his assets into the trust during his lifetime. It would have transitioned to an irrevocable trust after death, which would have allowed a trustee to transfer his wealth more quickly and privately.

Trusts Avoid Probate

The key difference between wills and trusts is that a will must pass through probate court to work, which is a public process. Revocable living trusts and irrevocable trusts, when used the right way, avoid probate court entirely. Trusts are also designed to accomplish different estate planning goals beyond avoiding probate and protecting privacy.

Although average people don’t have to worry about the press leaking details of their financial status, it’s in everyone’s best interest to avoid probate court. On top of being public, it’s also expensive, time-consuming, stressful, and more. What if there had been a conflict and Reed’s sister felt she should get more than 25% of his income, or Reed’s wife wanted everything? Family conflict can turn into a public battle.

It’s easier to file objections or challenges to a will in probate court. A trust, which is administered privately, makes contests much harder. It leaves detailed instructions with specific conditions, limitations, and suggestions for the trustee to explain to family members and follow.

Reed knew he was suffering from liver disease and signed his will about a year before he passed. At this time, he should have changed his plan to include a revocable living trust. This would have avoided the media leak and aggravation of probate court.

Get Started on Your New York Estate Planning Today 

When it comes to your New York estate plan, don’t rely on a last will and testament alone. Get professional help and do it right! Consult with and retain knowledgeable estate planning attorneys in New York, like those at Russo Law Group, PC, who can provide legal services and advice about estate planning, probate, and trust administration. For more information or to review or update your estate plan, we invite you to contact our law firm to speak with one of our experienced elder law and estate planning attorneys in New York at 1 (800) 680-1717.

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