We initially wrote a piece on Kobe on our blog – you can check it out here: https://trustcounsel.com/2020/02/nba-superstar-kobe-bryants-estate-plan/
Honestly, I did not follow Kobe Bryant during his lifetime. I knew of him and knew of his career but nothing more than what was in the mainstream. However, in the wake of his passing in a tragic helicopter accident I have been struck by his legacy and have thus been anxiously waiting to hear about his estate plan and the arrangements he would have made for his loved ones. Passing away is inevitable for everyone, but it is especially jarring when it happens to younger people. Nothing is certain, and these incidents remind us of this harsh reality.
It is reported that Kobe Bryant established a trust to provide for his 37-year-old widow, Vanessa and their children. According to Forbes, Bryant died with a net worth of about $600m; he was the second-highest-paid NBA player of all time with career earnings, endorsements and investments.
Kobe Bryant created the trust in April 2003, shortly after the birth of his oldest daughter Natalia, now 17. The Trust was amended several times over the years including every time the couple had a new baby. He amended it following the birth of his daughter Gianna, and again in 2017 after the birth of his third daughter Bianka, 3. It thus currently includes their eldest daughter Natalia, the late Gianna who was killed along with her father, as well as a further revision effected in 2017 soon after Bianka’s birth. This was the last revision of the document.
Unfortunately, 41 -year-old Kobe Bryant never got round to updating his estate plan to include his youngest daughter Capri following her birth in June 2019. Therefore, Capri is not included in the trust and it is silent with respect to Capri and her future descendants. The issue with not amending the trust is that “the Bryant Trust will be divided into two shares, and not three” after Vanessa’s demise.
Of course, it is most unlikely that Bryant deliberately disinherited his last daughter but this unfortunate oversight has caused his loved ones some stress. In the midst of her grief, Kobe Bryant’s widow has reportedly requested for a judge to make an amendment to the trust deed to include their youngest daughter, Capri, in the trust distribution claiming that it was always Kobe’s intention to provide financial support for all of his children upon his death.
Even though making changes to a trust posthumously can be a challenge, indeed this is one of the advantages of setting up a trust, it is expected that the judge will approve this request. In complicated circumstances, such a posthumous amendment could create an argument that the child was intentionally left out of the will or trust.
Kobe Bryant named Vanessa and his agent as co-trustees to manage the trust fund and make discretionary payments to the beneficiaries of the trust. It is important to protect minors to inherit large sums of money too early.
There are so many powerful lessons for us all in this tragic situation. Particularly with our extended family social system and exceptionally large families, the importance of estate planning cannot be over emphasized; it is more important than ever to put things in place to protect your loved ones should anything untoward happen to you. Indeed, the reluctance to organize one’s estate and legacy is even more apparent in our own environment where estate planning is often seen as tempting fate or pre-empting one’s own demise.
But it is not enough to put an estate plan in place; just as important is the need to ensure that the plan is updated to reflect evolving circumstances throughout one’s lifetime. A marriage, a divorce, new beneficiaries or a significant change in one’s fortunes are important life events to warrant an update of an estate plan.
Without the periodic review of your estate plan, you run the risk of disinheriting those whom you love and to whom you intended to bequeath your assets.
If one of your to-do is to review your estate plan, just do it. Stop procrastinating. Here are some pertinent reasons why:
Probate avoidance is one important reason to have a plan in place. With no estate plan, your family and loved ones may need to go through the stressful, lengthy and expensive probate process.
Make sure your assets go to whom you want. Without an estate plan, it is the court that decides who will receive your assets. Furthermore, if you want some assets to pass to a non-family member, that may not happen unless it is specified.
Have you nominated a guardian for your minor children? Don’t leave it to someone else to decide who should look after your minor children should something happen to you. A decision, particularly one that you can change, is better than no decision at all.
You can reduce the risk of a family feud. Making no decisions regarding what you want to happen to your assets, can lead to long-term family disharmony and friction. Deal with potential issues now, and leave fond memories and a lasting legacy and not a devastating family fight in your wake.
Deal with incapacity issues even though they probably won’t ever be needed. Putting a Power of Attorney and health care proxy in place along with other estate planning documents will help your loved ones carry out your wishes in case you ever become incapacitated.
Minimize the impact of taxes on your estate. It is so important to plan ahead as the impact of estate taxes can be devastating to family members who are often forced to sell properties, even the family home, to pay the bills.
Use this period of “lockdown” to review your entire financial plan; from your banking, budgeting, savings, investments, insurance, retirement plan, philanthropy to estate plan. Make a review of your estate plan one of your top financial goals.
Vanessa Bryant’s unfortunate situation highlights the importance of making sure your trust documents are up to date. Trust documents should either contain provisions that provide for after-born children, or be updated immediately after the birth of any children or any other significant life event. At Trust Counsel, we provide our clients with trust reviews to determine if any changes need to be made. Contact us today to schedule your Family Wealth Planning Session.