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Probate display of Lou Reed's estate could have been avoided

By now, anyone who reads this blog knows the importance of proper estate planning. Some people, however, choose to take a different route for dealing with their estate. The estate of Lou Reed brings this point to light. While the man did have an estate plan in place, some are calling it a "walk on the wild side." Michigan residents might be interested to learn why this comparison is being made.

Reed didn't use a trust to distribute his assets. Instead, he relied on a will. That will was signed in April of 2012. The 34-page document outlined how to distribute everything the man owned. This decision does make his wishes known, but it doesn't allow for any privacy for his heirs. Instead, everything is being fed to the public, which could have been avoided if the man had used a revocable living trust instead of a will.

The difference between the two methods of distributing property is that a trust usually doesn't have to go through probate court. A will always has to go through probate court. The will is also more prone to disputes. Going through probate is also the more expensive and time-consuming option for dealing with the estate of a deceased loved one.

In Reed's case, he left his wife 75 percent of the residual of the estate, as well as his personal property and his New York real estate. The remaining 25 percent of the residual goes to his sister. He also set aside $500,000 for his sister to take care of their mother.

With the public display of this will, it easy to see why individuals who values their privacy might need to look into trust arrangements for an estate. Understanding the benefits of each type of estate planning arrangement can help you to set up your estate plan in a way that works best for your heirs.

Source: Forbes.com, "Lou Reed Walked On The Wild Side With His Estate Planning" Danielle and Andy Mayoras, Jul. 10, 2014

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