Simon Cowell's Most Famous Band Performing at Staples Center in Los Angeles
With a charitable trust of this size, there needs to be a professional trustee that knows how to invest,” explains Mr.Beatrice, “and who better than someone who wants to carry on their father’s legacy.
Boston, MA (PRWEB) September 24, 2013
Recently, UltraTrust.com, founded by Estate Street Partners as an informational website on expert irrevocable trust and estate planning, reviews and analyzes Simon Cowell’s estate plan to give his money away to “kids and dogs,” as reported by CNBC (2), rather than pass it on to his legal son to be born in February of next year and gives some sage financial planning advice.
Simon Cowell, age 53, had an affair with Andrew Lloyd-Webber’s wife, Lauren Silverman, age 36, and afterwards she split up from Andrew as reported by The Mirror (3). Simon has been fielding many questions on the subject of what he will do with his $350 million as reported by CNBC (2).
The Mirror has quoted Simon saying, “I’m going to leave my money to somebody. A charity, probably — kids and dogs. I don’t believe in passing on from one generation to another.”
Suze Orman said, “Thoughtful financial planning can easily take a backseat to daily life.” (4) It seems that Simon Cowell has taken this backseat and perhaps has not thoroughly thought through his options or perhaps this flippant statement alludes to his decision to keep these matters private.
Regardless of the reasons, UltraTrust.com decided to take a close look at the situation and figure out how Simon could help his son and give his fortune to charity - at the same time.
“There are only so many options to use to pass on wealth in this day and age,” explains Rocco Beatrice, managing partner of Estate Street Partners, LLC.
“Using the options available with subtle changes, however, allows a good estate planner to do whatever the client wants.” Judging by Simon’s decree giving his wealth to “kids and dogs”, UltraTrust.com believes that he may simply do so using a simple will.
UltraTrust.com regards wills are generally good for two things: determining who will take care of minor children and giving wealth away directly to beneficiaries with nothing in the way of tax and/or Medicaid planning.
“For the vast majority of people, a will is probably not sufficient alone to take into account all variables in estate planning,” claims Mr. Beatrice, “and especially not for someone with wealth like Mr.Cowell.”
UltraTrust.com deems another option for Mr. Cowell is a testamentary trust or revocable trust. These types of trusts would work for him to control his wealth after his death; however, these trusts would not help with estate taxes, causing his charities to get less.
“Revocable trusts and testamentary trusts both have the person leaving the wealth, owning the wealth until their death,” explains Mr. Beatrice. “This means that when they die, that wealth is subject to estate tax.”
“I think the best option for Mr. Cowell is an irrevocable charitable trust,” suggests Mr. Beatrice.
An irrevocable trust is a way for assets to be held outside of one’s estate but under the rules of the person who placed the assets in the trust. For Mr. Cowell’s purpose, his option could be to place the assets in the trust with instructions to grow the money and pay the proceeds to various charities of his choice.
“With a charitable trust, the trust can continue to fund charities in Mr. Cowell’s name forever.”
Without the trust, Mr. Cowell’s donation to charity could be a one-time act. With the trust, the $350 million can keep earning money in perpetuity for the charities that Mr. Cowell enjoys.
“With a charitable trust of this size, there needs to be a professional trustee that knows how to invest,” explains Mr.Beatrice, “and who better than someone who wants to carry on their father’s legacy.”
Mr. Cowell can write the trust in such a fashion that his son has the choice to work for the trust if he so chooses. This way, Mr. Cowell would help his son but not directly. His son would have a job with a moderate salary if he so chose.
Simon could name his charitable trust “The Cowell Charitable Trust” and it could fulfill all of Mr. Cowell’s charitable causes as well as help his son get started in the workforce. Even if his son took the position as trustee, the trust could be drafted so he would not be able to use the funds in the trust for his personal use.
“Often, the drafters of trusts put language in that allows the trustee to be paid a reasonable amount,” clarifies Mr. Beatrice. This clause would allow the son to be paid a salary and not anywhere near $350 million.
UltraTrust.com concludes that Mr. Cowell could satisfy his own desires and probably garner kudos from the public sentiment for taking care of his progeny as well as appease dog lovers and charitable organizations.
To learn how to protect assets save on estate taxes and probate costs visit UltraTrust.com, the irrevocable trust experts. Visit MyUltraTrust.com to set up a DIY irrevocable trust plan.
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Sources:
1- forbes.com/profile/simon-cowell/ June 2013
2- cnbc.com/id/101014482 September 6, 2013
3- mirror.co.uk/3am/celebrity-news/simon-cowell-baby-not-inherit-2252368 September 5, 2013
4 - brainyquote.com/quotes/keywords/financial.html#sqtvboOxvC6LXwm3.99 September 5, 2013