Month: September 2015

As is the case with many celebrity passings, there are lessons to be drawn from the estate of Paul Newman. In this particular case, it is important to understand that if a foundation will be run by family after the death of a loved one, early and clear communication is key. Rules for the governance of the foundation should also be outlined and explained sooner rather than later. The primary reason for this is because changes in estate planning can happen which alter the understanding of stakeholder roles in the foundation. 

Paul Newman changed his planning a dozen times before he died, shifting the plan from the original mandate that his four daughters would rotate through his Newman’s Own Foundation to omitting them entirely. With his four daughters removed from the picture, Newman shifted that responsibility to two of his long-time friends and collaborators.

What made such a big difference for his daughters was that his original plans were to provide each daughter with $500,000 (an amount that was later changed to $1 million) and an equal part share of 50% of his estate, with the other 50% going to Joanne Woodward.

In the end, all the funds went to Woodward to ensure her care, with any other distributions to happen after his death. With these personal changes in his estate planning, foundation management can be affected if other stakeholders are not included in the conversation. Be sure to approach your estate planning holistically.

Perhaps these two celebrities are not the most popular out there as far as role model status, but they do have some valuable lessons for asset protection planning. Asset protection is an essential goal that every person should have, regardless of whether their estate is in the 7 figures or not. Unfortunately, exposures to risk are something faced by everyone, even if the type and severity of those risks can vary.

Retirement accounts are a key focus for both of the above-mentioned individuals. Even though the tax deferral advantages of traditional IRAs and 401(k) plans are well documented, there are asset protection benefits to using these tools, too. In the event that you face a legal liability or personal bankruptcy, some retirement assets can stay out of the hands of creditors.

Right now, personal retirement assets housed in an employer-sponsored plan like a 401(k) are shielded from creditors. Even if a party leaves the position where this plan started, rolling it over to the new employer provides the same level of asset protection.

Of course, the specifics of how to protect your assets is something you should discuss with your estate planning and asset protection planning specialist. Making sure you get an appointment on the calendar could go a long way towards preventing attacks against your assets in the future. Contact us at info@lawesq.net.