Popular singer-songwriter Jimmy Buffett died in 2023. Many people were curious about how much Buffett might have been worth, but the news about his estate plan provided very little information. What we do know, however, is that Buffett’s estate relied heavily upon trusts. And while it’s no secret that wealthy and famous individuals use trusts for their estate planning, anyone of any means can also use these important instruments. If you’ve never created an estate plan or you want to know more about the role trusts may play in it, talk to the estate planning attorneys of Palmer & Slay.
Details Revealed About Buffett’s Estate
Not long after Jimmy Buffett’s death, his last will and testament became public record. This isn’t unusual because probate is a court proceeding that necessarily involves the will becoming public. However, the will shed little light on the nature of Buffett’s actual estate assets. The New York Times reported that most of Buffett’s money and property, which includes his intellectual property rights and the rights to his music, are held in a trust.
It is estimated that at the time of his death, Buffett owned:
- $20 million in annual music royalties
- Numerous houses, cars, planes, and a yacht
- Several holdings related to the Margaritaville brand, including restaurants and casinos
- Stocks and investments
- Watches
- Memorabilia
Why Trusts Make a Difference
Of course, the above is only an estimate of what Buffett might have owned. The reason that a more definite valuation of his estate cannot be ascertained from public records is simple: Buffett built his estate largely on trusts.
A trust is an arrangement by which a legal entity (the trust) holds title to assets, which are managed by a trustee for the benefit of third-party beneficiaries. Trusts serve a number of important estate planning purposes which include:
- Privacy: Most notable in Buffett’s case was the relative obscurity of his estate, but this is by design. Trusts are private legal arrangements that are generally not open to the public. This is an advantage for individuals like Buffett who may have substantial holdings but do not want others to know about them.
- Avoiding probate: The reason that trusts are private is that they do not have to undergo the probate process. Unlike a last will and testament which must be probated to prove its validity, trusts are not subject to this public court proceeding. Since probate is expensive and time-consuming, avoiding it can save money and bring a degree of finality to an estate.
- Avoiding or minimizing estate taxes: Trusts are one of the most effective ways to reduce the size of one’s taxable estate. This is because, when established properly, a trust takes assets out of an individual’s name and places them in the name of the trust. By retitling property in this manner, it is possible to minimize or avoid estate taxes.
- Reducing liability: The same concept of retitling property in the name of the trust also helps a settlor (the person who creates the trust) shield certain assets from creditors. As with strategic tax planning, however, care must be taken to ensure that the trust is set up in such a way as to legally avoid creditor claims. Be sure you work with an experienced estate planning attorney.
- Supporting beneficiaries: Trusts are generally established for the benefit of third parties known as beneficiaries. Because they can save money in taxes and probate, more of the estate can be preserved for beneficiaries’ use. Trusts, in other words, are great tools for ensuring the continued financial support of your loved ones even after your passing.
Is a Trust Right For Your Estate? We Can Advise You
Jimmy Buffett’s estate is a testament to how sound estate planning can pay off. You may be wondering whether you should also use a trust and, if so, how to create one. The good news is that not only can anyone establish a trust, many different types can meet the specific estate planning goals you have in mind. Learn more by contacting Palmer & Slay to schedule your initial consultation.