The elevator stopped and out I stepped onto a full floor overlooking Miami Beach.
The view was epic but my mind couldn't take it in.
I was there to "do my estate planning" ~ whatever that means.
I sat down with my finance, watched a high-flying attorney walk in, and proceed to talk over my head for the next hour.
I left that meeting feeling confused, a bit overwhelmed, and with a stack of documents I was supposed to review.
I remember thinking, review what exactly ~ I have no idea what I am looking at.
That was my first experience with estate planning as a professional athlete, ya not so great.
Well since then I have been to countless estate planning meetings both for myself and for our clients.
In this blog, I am going to talk through six things professional athletes should consider for estate planning.
Don't worry, by the end you won't wonder what "estate planning" means like I did in that fancy conference room.
Estate Planning for Professional Athletes
Instead of thinking about estate planning as this big scary term consider this ~ all it really is protection and direction for the things you care about (assets, people, investments...).
Picture a parking garage, where you get to put all of the things you care about.
Come a big storm, your things are protected.
Then picture if any of those things ever want to leave you have an attendant at the gate with a roadmap of where they should go.
Come a time of change, your things have direction.
I want you to remember those two terms ~ Direction and Protection.
Life is full of surprises, let me tell you. If you had told 18-year-old me everything that was about to ensue in my sports career over the next decade I wouldn't have believed you.
Yet even with all of those surprises, everything my wife and I worked hard to build has been protected and had direction (there are those two words again). This was due to proper estate planning.
Not only that, we have a clear path to where the things we care about the most will go when we are not here. Ya, no fun to think about but the fact is we will all die.
My favorite slogan certainly applies here ~ plan now or regret it later.
In athlete wealth management, you want to ensure you have a financial team that understands the key components every athlete should consider when it comes to estate planning.
Here are six ⬇️⬇️⬇️
1. Revocable Living Trust
What is it?
A revocable living trust is the roadmap for all the things in your financial life. It is a legal document that you have drafted that allows you to put in nearly any direction you want.
Direction for who gets your stuff
Direction for how they get your stuff
Direction for factors need to be met to get your stuff
The beauty of a revocable living trust is you can change it at any time. It is the ultimate building block in estate planning for professional athletes.
Why it matters?
It matters for a few reasons:
Provides further direction and avoids probate
Provides additional protection (trust owns it, not you personally)
Provides additional privacy (things can be titled in the name of the trust)
Consider this, a typical bank account has your name on it and should be followed by a beneficiary. A beneficiary is the person that the account goes to if you die. It provides no further clarity if that person isn't there or is not able to receive that money.
The good news ~ they have a built-in plan for that, it is called probate.
The bad news ~ probate is the government's plan for your money (it is public and expensive)
You want to avoid probate at all costs and a revocable trust is just the tool to help you do that.
***Pro Tip: A revocable living trust is a legal document. In order for your assets to be protected by that document you must properly retitle those assets after completion of your Trust. As financial advisors for professional athletes, we ensure all accounts and assets have the proper tilting after completion.
2. Pour-Over Will
What is it?
Remember how our revocable living trust is our foundational roadmap for all our important things? Well, consider our pour-over will to be an extension of that. It allows you to provide direction to things that can't have official tilting like investment accounts.
It works in conjunction with your trust. Things that are not tilted in your trust but noted in your pour-over will flow (or pour over) into your trust upon your passing.
Why it matters?
It matters for a few reasons, chief of which probably being one you are not thinking of. The last thing you want is family and friends arguing over family heirlooms. That is where a pour-over will comes into play.
You can put things like:
Priceless Art
Family Jewelry
Career memorabilia
***Pro Tip: A pour-over will is one of those documents that we recommend updating the most often. As new favorite possessions come up, you want to make sure you are providing direction around who gets what. After all, you don't want family fighting over a World Series ring.
3. Healthcare Directive
What is it?
Think of a healthcare directive as a document outlining what you want to happen and who you want to make medical decisions should you not be able to.
Look it isn't fun to think about this scenario but we either plan now or regret it later.
The two key components are:
Directive - What directions are you specifically giving?
Power of Attorney - Who can provide direction to healthcare professionals on your behalf?
Why it matters?
While no one wants to talk about this stuff, the reality is you either make the plan or the government makes the plan for you. Upon turning 18, should there be no directive or power of attorney in place it can be left up to the hospital or physician on the next steps.
I don't know about you but I wanted a trusted person in place to execute my wishes if I can't.
***Pro Tip: This needs to be someone that you trust but also has the emotional ability to act on whatever your wishes are. The reality is if your healthcare power of attorney or directive is kicking in, the situation is not going to be stress-free.
4. Financial Power of Attorney
What is it?
We just talked about the medical power of attorney and the financial power of attorney serves in much the same way ~ just for your money moves.
This is someone who can pay bills, make financial decisions, and serve in a capacity you would want should you not be able to make financial decisions.
Why it matters?
Again, this isn't fun stuff to think about but it matters. As an athlete, it is paramount that you spend the proper amount of time determining who should be in this role.
This person will have the ability to execute on your behalf. We have all seen the stories of athletes getting taken advantage of and often it is because they unknowingly gave power of attorney to someone.
***Pro Tip: The financial power of attorney can be a family member or close friend. I recommend considering a combination of someone wise with money and that you have the ultimate trust in. Remember you can always adjust this in the future, so choose for today not 10 years into the future.
5. Guardianship
What is it?
Guardianship is the legal term for who would care for your children (if still minors) if you were not able to.
It also can provide that individual with details of how you want them cared for:
Educational Desires
Access To Certain Funds
Guidelines For Raising Them
It is a massive decision who is placed in this role for a professional athlete.
Why it matters?
I don't know about you but my four kids mean everything to me. The care of them if I wasn't there is of the utmost importance to me.
For my wife and I, this was one of the biggest roles we had to think about in drafting our current estate plan.
***Pro Tip: You can make adjustments to this in the future. I say that because we often have athletes who think one person is the right fit today but might not be in the future. That is ok, this can be adjusted in the future. The key is making sure you have a financial team that is reviewing these documents on a regular basis.
6. Estate Taxes
What is it?
You pay taxes when you make money...and you thought that was it? No, no, no the government actually imposes a tax on dying if of a certain net worth.
As it stands in 2024, an individual with an estate (all your assets plus life insurance) over $13.61M will owe estate taxes. Today that estate tax rate ranges up to 40%!
Let me say that again... if your assets + insurance benefits total more than $13.61M in 2024 you will owe a tax for dying ~ a significant one at that.
Why it matters?
It matters for a host of reasons as a professional athlete.
The estate tax laws are always changing.
You can build a significant net worth at a young age.
That $13.61M number is set to get cut in half by 2026.
Proper estate planning can reduce or eliminate estate taxes
***Pro Tip: The sooner you start planning for potential estate taxes the better off you are as a professional athlete. You can start to get compounding growth (investment returns) outside of your estate. Said another way ~ you can grow your money clear of estate taxes if planned for properly.
My promise to our professional athletes is they will never walk into an estate planning meeting like I did.
Deer in the headlights, wondering what is going on here.
We coordinate, educate, and are in everything estate planning meetings with our clients.
It is our job to take legalize (you know what the lawyer says) and help it make sense.
After all, we either plan now or regret it later.
If you are a professional athlete looking for a financial team specializing in you schedule a call and talk to a Moment founder.
Not sure what questions to ask, check out this video on 10 questions you should ask when interviewing a financial advisor.
Get in Touch With An Advisor
Frequently Asked Questions
Here are some answers to questions I received frequently about this topic.
1. Does Moment Private Wealth help athletes with estate planning?
Moment does not draft estate documents but we do help coordinate, advise on, and execute estate planning strategies for professional athletes.
2. Who does Moment Private Wealth use for estate planning?
Moment has a vetted group of nationwide estate planning attorneys to help clients draft and execute on their estate planning needs.
3. Are you a fiduciary?
Moment Private Wealth serves clients as a fiduciary 100% of the time.
4. How does Moment Private Wealth make money?
We are only paid in one transparent way, by our clients. We receive no kickbacks or participate any profit-sharing arrangements. Our fees are simple, transparent, and clear for our clients.
5. How are you different than other financial advisors?
We are specialists in working with professional athletes and entrepreneurs. We limit the number of new clients we take on. This allows us to provide unparalleled value and highly personalized service to professional athletes. We work as a team to service our clients. We believe in building a team of “A” players. This ensures our clients receive world-class tax, estate, insurance, and investment strategies. We focus on educating first, then executing.
*Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.
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