Recently, media outlets published that Francis Bean Cobain – the 25-year-old daughter of Nirvana’s Kurt Cobain – receives about $100,000 a month from a trust funded by her father’s publicity rights. Her father died without even a simple will. Intestacy laws dictated that his estate would pass to his surviving spouse and daughter and there have since been ugly, public court battles.
As we frequently say, an estate plan could have avoided the lengthy litigation. In this post, we discuss how the information about trust payments became public. And we address why you need to consider that children might divorce as part of the estate planning process.
Where did this information come from?
The young woman is going through a divorce. Public court documents filed as part of a divorce process are probably the answer.
Francis tweeted in response, “the media will always sensationalize falsities & untruths because that generates buzz for their benefits. Don’t believe everything you read.” While it is hard to know whether the figure reported is correct, there are several ways to ensure that this never occurs to a loved one.
Divorce is a reality, plan for it
Trusts are tools that can keep the details of your estate out of the public domain. They also provide a means to ensure that an inheritance does not become a part of a contentious divorce battle.
Rather than giving a gift outright, doing so via a trust with certain provisions can stop assets from going to a child’s ex in a divorce. A trust can be as broad or specific as you want. In addition, you can use a trust to pass down property, investment portfolios or insurance proceeds.
Consider Colorado law when drafting a trust document. For instance, a mandatory schedule of distributions versus discretion given to a trustee might affect whether the assets would be divided in a divorce. How many beneficiaries and who is appointed as a trustee are other important decisions.
Some couples only update their estate plan after children have gone through a divorce. It is impossible to predict whether a marriage will last, so ask an estate planning attorney what happens to a gift in the event of divorce. Get the knowledge you need to make an informed decision that protects loved ones.