If Lou Reed had used a revocable living trust, and transferred his assets into the trust during his life, then all of this information would have been kept private. No one would know how much he had, whom he left it to, or how much his executors were charging.
When a celebrity passes away, reporters scramble to find out how much money the celebrity had and how it will be distributed. But how exactly are they getting the information? Is it in-depth investigative journalism … or a common estate planning mistake?
Recently, the New York Post has had story after story about the specific details of Lou Reed's estate plan. We know how much he had when he passed away. We know how much money his intellectual property interests have earned for his estate since he passed away. We also know how much money each of Reed's heirs will receive. How do we know so much?
As Forbespoints out, in an article titled “Lou Reed Walked on the Wild Side With His Estate Planning,” we know what we know about Lou Reed's estate because his entire estate plan consisted of a single will. That will had to be submitted to a public probate process, which allows reporters to gain access to the details. If Reed had used a different estate planning tool, such as a Revocable Living Trust, it would be much more difficult for reporters to find out the details.
You might not care whether your estate is made public after you pass away, since you will not be around to deal with any consequences. However, you should consider whether your heirs would want other people to know exactly how much they inherited. It might violate their privacy.
For additional information on estate planning, wills and probate in Houston, please visit my website.
Reference: Forbes (July 10, 2014) “Lou Reed Walked on the Wild Side With His Estate Planning”