Law Offices Of Connie Yi, PC
Tell Us About Your Case

For the safety of our community, clients and staff, we have suspended all in-person meeting effective March 17, 2020. All consultation meetings will be via Phone or Zoom Video Conferencing. Please contact us at 925-484-0888 or email us directly at [email protected] to schedule the consultation.

Bay Area Estate And Tax Planning Law Firm
Estate Planning
Trust Administration and probate

Get
Started

NBA player’s trust creation sets example for financial planning

| Dec 5, 2013 | Uncategorized |

A personal trust set up by rookie NBA player Michael Carter-Williams is making the news as a surprisingly wise decision from a first-time professional athlete. Players from the NBA declare bankruptcy at a startling rate of 60 percent within their first five years of retirement, indicating that financial management may not be a top priority for players in the league.

The young man’s trust will set aside his salary from his first contract and prevent him from accessing it for three years, according to reports. Trusts are often set up to provide for children, benefit charities, or as a part a tax minimization plan. In this case it is not clear what the player’s long term intent is with the trust since he does not yet have any children. However, he could certainly change the terms of the trust and add beneficiaries over time, such as charities, friends, or close relatives.

Trusts can also be used effectively by high-asset individuals to manage taxes and to protect assets. There are very specific regulations that go along with setting up trusts to delay tax liability, so it is important to be up-to-date and seek the advice of an experienced professional who understands both estate planning and tax regulations.

Setting up a trust to delay the receipt of money is something that a lot of parents and grandparents do in order to give a gift to their children or grandchildren. By putting time limits or other restrictions on a trust, families can help protect younger members from potentially foolish financial decisions that they may regret later. In this case, Mr. Carter-Williams is being advised by his mother, who told reporters that they are creating a plan for long-term financial health for the 22-year-old professional athlete.

Source: ABC News, “Philadelphia 76ers Rookie Puts Salary in Trust: A Smart Choice?” Susanna Kim, Dec. 3, 2013.

Categories

Archives

FindLaw Network

Recent Blog Post

What are reasonable fees to charge as a trustee in California?

When implementing an estate plan in California, it is essential to ensure that you receive the proper compensation for the amount of time and work you are putting in. The probate court will look through the amount you charge to see if it is reasonable, especially if...

What to know about life insurance trusts

California families have an exemption for their estate that keeps it from being subject to income taxes. However, above that $11.7 million, the estate tax bill could get large. This is why they need to take measures to reduce the size of their taxable estate. Life...

Are estate taxes headed for changes?

Not every inheritance involves paying estate taxes, but some estates rise above the federal exclusion amount. California residents that feel familiar with state and federal tax rules might not realize changes could happen. Namely, proposals intended to raise tax...

View More Blog Posts