Because the late Lou Reed, singer and lead guitarist of The Velvet Underground, chose to use a will instead of a trust to distribute his lifetime earnings, Pennsylvania residents might be privy to the personal details of the distribution of his estate. However, estate planning alternatives could have spared him the public display of his wealth and how he decided to dispose of it.
One of the executors of Reed's estate filed documents with the probate court in Manhattan that has jurisdiction over the case. These documents show that Reed's estate has accumulated about $20 million just since his death in October 2013 after he died of liver cancer. This filing was necessary as part of a report that the executor and manager provided to the court to provide an update regarding the estate's inventory and income. Reed's wife receives about 75 percent of Reed's estate residuals, and his sister receives about 25 percent. Additionally, his wife received about $9 million worth of expensive New York real estate. Reed also reserved another $10 million worth of assets to be split between his wife and sister.
The distribution of assets was determined by a will that Reed signed in 2012 when he knew that he was suffering from liver cancer. However, a trust could have set the same parameters that Reed wanted for the distribution of his estate without exposing his plan to the public. Additionally, trusts usually work outside of probate court. Reed also left $500,000 to his sister to use for the care of his elderly mother, but a trust could have set up specific provisions that could have directed how these funds were to be used.
An individual who knows how he or she wants to dispose of certain assets may create a trust. An estate planning lawyer may be able to offer specific provisions that can be included in the trust to more effectively guarantee the wishes of the deceased are followed.
Source: Forbes, "Lou Reed Walked On The Wild Side With His Estate Planning", Danielle and Andy Mayoras, July 10, 2014