One of the most critical pieces to success in professional sports is planning. Yet, the interesting part about that planning is you know that the game certainly won't go according to plan.
In fact, a good game plan maps out specific situations based on certain outcomes of the game.
Said another way, you want to plan for the inevitable unknown of the outcome.
Your team could be leading down the stretch or could need a miracle comeback, your game plan better have the right levels to pull for each scenery.
Well if we think about our money in the same mold, this is where estate planning for professional athletes plays a critical role in athlete wealth management.
In this blog, I am going to break down the role estate planning plays for professional athletes and five biggest mistakes I see.
Estate Planning for Professional Athletes
Here is my best pitch as to why you should get estate planning done as a professional athlete ~ you already have a plan in place and you won't like it.
You see everyone has a plan in place ~ The Government's One.
Turns on that plan is littered with costs, publicity, and total disregard for what you want to happen.
To revert back to our gameplan analogy that would be like putting a random fan in charge of your team's next gameplan. You still have a plan but it surely isn't optimal or going to get you where you want to go.
So it is your choice, you create the plan or you stick with the government's plan.
For today's blog, we are going to focus on five critical mistakes I see professional athletes make.
If you want a deeper dive into the nuances of estate planning make sure you check out my estate planning guide for professional athletes.
In that guide, we talked about how your estate plan is like 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.
A proper plan provides protection and direction of the things you care about.
Yet to build the right plan, we have to avoid the common pitfalls that come with estate planning.
Here are five ⬇️⬇️⬇️
Pro Athlete Mistake 1: Failing to Start
It is hard to plan for the future much less create a plan for decades in the future. Well, Lord willing that is what you are doing with your estate plan as a professional athlete.
You are planning for the day that you either can't make those key decisions or won't be there to make them.
It is grim to consider but the number one mistake I see professional athletes make is assuming they should do this later.
Well let me reframe your perspective on this ~ consider how hard you have worked to put yourself in the position you are in today.
It is typically decades in the making. All of that work and the rewards can be misplaced in a second without proper estate planning.
That means getting started today.
Pro Athlete Mistake 2: Crack In The Foundation
To revert to our house analogy, all houses (and estate plans) are not created equal. In fact of the dozens of estate planning documents I have reviewed, the vast majority need upgrading.
This can be anything from:
Changing names
Adding additional details
Updating your wishes and desires
Putting in key elements for the next generation
Your estate plan is a list of documents filled with names, wishes, and desires for all the things that matter to you.
The reality of life is those names, wishes, and desires will change over time. You need to make sure you are working with a qualified financial team that is reviewing those documents.
Our goal at Moment is to ensure that those documents continue to match up with a client's goals.
Remember, don't build the house and fail to maintain it.
Pro Athlete Mistake 3: Building Just One Level
My first house was a one-bedroom apartment with my wife. It had all the features and space that we needed. Well, four kids later our house has two levels.
Just as my needs progressed with my house, so can your estate planning documents.
They can start with things like:
Pour Over Will
Health Care Directive
Revocable Living Trust
Financial Power of Attorney
These building blocks can quickly turn into more complex structures like irrevocable trusts and generational planning.
The key is ensuring your plan, investments, and future goals are relayed into an estate plan that matches those desires.
Remember you might need a one-bedroom apartment or a five-bedroom two-story home.
Pro Athlete Mistake 4: Set & Forget
Forgive me for sounding like a broken record but this is not a set and forget it thing.
No, you don't need to be reviewing this every quarter but each year you should be giving thought to any changes that need to be made.
Remember done right these documents are your current thoughts on a lifetime's worth of work.
To me, that is valuable enough to be reviewed each year.
Pro Athlete Mistake 5: The Next Generation
If you are anything like me, the single biggest factor in me playing professional sports was my ability to put the work in. Yet, that was innate.
It came from seeing how hard my parents worked and the lessons that taught me.
Many of our athlete clients, they have or are creating generational wealth. This means we need to be thoughtful about how our estate planning decisions (and the money involved) affect the next generation.
For me, it is a balance of passing along wealth carefully while keeping the same values that made you the person you are today.
This can be done through proper estate planning and the conversations that follow the document creation.
Remember this entire estate planning process isn't about you, it is about everyone that comes after you.
Estate planning is one of the most underutilized and misunderstood tools professional athletes have in their wealth management playbook.
The key is ensuring you have a financial team that is a specialist in athlete wealth management.
You want someone who understands the nuances that come with estate planning for someone 18-30 years old.
You want someone who can take a complex legal term and explain it to you in a way that is easy to understand.
After all, you have worked your entire life to put yourself in this position. The next step is planning for the inevitable time you pass those resources to the next generation.
If you are a future or current professional athlete looking for help with estate planning schedule a call with our team.
Get in Touch With An Advisor
Frequently Asked Questions
Here are some answers to questions received regarding estate planning for professional athletes:
When should professional athletes get an estate plan? We believe every athlete should understand the pros and cons of getting this in place today.
What is the cost of core estate planning documents? Document creation costs between $3,000 - $6,000 but Moment also provides clients access to a tech platform at no additional cost to the client. This varies depending on the clients specifics need and complexities.
Can you change your estate plan? Yes, the majority of documents (revocable trusts) can be changed at any time. You do not need to create a full set of new documents and instead can just make minor adjustments along the way.
Is my information protected if I share it with an attorney? Yes as part of attorney client privilege, everything you share with an estate planning attorney stays between you and the attorney. This is especially important for high-profile public figures like professional athletes.
*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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