When New York musician Lou Reed died in 2013, he left a 34-page will behind. For some people, a will is sufficient, but for someone of Reed’s financial worth and ongoing income, a revocable trust would have been a more appropriate approach to estate planning.
Reed’s estate was worth a minimum of $30 million at his death and perhaps more. Moreover, it continues to earn money. The co-executors have asked for fees of $220,000. Reed left assets of around $10 million to his wife and sister. He also left property worth about $9 million to his wife along with 75 percent of the residuals of the estate. The other 25 percent went to his sister. An additional $500,000 was set aside for the care of his elderly mother.
These facts have been widely reported in the press, but had Reed left behind a revocable trust rather than a will, they would have remained private. Unlike a trust, a will must pass through a probate court, and that is a public process. The probate process can be expensive, and it also may exacerbate conflict. Challenging a will is a simpler process than challenging a trust, and with all the information in the will open to everyone, heirs can see which assets are going to what individuals. This may lead to infighting that a private trust may avoid.
Another advantage of a revocable living trust is that it can explain how assets should be handled if a person is still alive but unable to take care of themselves. Reed knew he was suffering from cancer, so it is unclear why he did not plan his estate differently. Even individuals who are not wealthy may benefit from a trust instead of a will.
Source: Forbes, ” Lou Reed Walked On The Wild Side With His Estate Planning “, Danielle and Andy Mayoras, July 10, 2014