Rich and famous people seek out publicity, and publicity seeks them out—often in detrimental ways.
“Individuals with wealth and notoriety are prime targets for having their assets disclosed by the media,” Jim Duggan, a wealth and estate planning attorney at Duggan Bertsch LLC in Chicago, said in a statement.
Duggan says that rather than use their own names when titling their assets, high-profile people should camouflage them with bland, ambiguous names.
“In this way the rich and famous can do their best to ensure that they are the ones receiving all the publicity, not their assets,” he said.
Duggan suggests five pre-emptive planning techniques public figures should consider in order to maintain confidentiality and creditor protection and to avoid probate.
1. Revocable Living Trusts
When the value, assets and inheritors of a public figure’s estate become public knowledge, the estate planning process has failed, Duggan says. This is because assets owned in an individual’s name at the time of death must go through the probate process, the details of which are fully available to the public.
A revocable living trust formed during a person’s lifetime can prevent this situation, he says, as assets are titled in the trust’s name, not that of the individual.
“It is a very simple structure that does not involve the formation of a company or separate tax compliance obligations,” Duggan said. “Upon death, the estate administration happens quickly, confidentially and at a lower cost.”
2. Land Trusts
Real estate purchased by an individual is a matter of public record, which is often publicized. Land trusts offer a discreet alternative way to acquire real estate. They allow an individual to buy an asset for his or her own benefit, but in the name of the trust, says Duggan. This avoids both public probate and public disclosure of the actual beneficial owner.
3. Asset Protection Trusts