If Armstrong saw this coming, he may have taken his earnings and, before he had any suits against him, placed them in an irrevocable trust and he may be in a very strong position to negotiate with a creditor.”
Boston, MA (PRWEB) January 23, 2013
Lance Armstrong let down those that invested in him - using his success and his image for advertising. In a sentence: Lance Armstrong’s cycling legacy is dead. No longer will he be known as a legendary cyclist, but instead a cheater and a doper. Now comes the tough part. What is to become of his wealth after his asset protection and estate planning?
He was stripped of his seven Tour de France medals, but continually denied using performance enhancing drugs, until now. Lance Armstrong finally admitted to doping on the Oprah Winfrey Show. This doping occurred while he was arguably the best cyclist in the world. He let down fans, friends, and teammates.
Armstrong’s current net worth is about $125 million. Because of his drug use, he lost endorsement deals of over $30 million. Armstrong could also lose $4 million in prize money, $7.5 million in bonuses paid to him by an insurance company, and many millions more in damages to his past sponsors such as U.S. Postal Service.
Additionally, he could be sued under the whistleblower act by teammates who tried to report his doping and were let go. By the time he gets done paying lawyers, experts, consultants, and settling lawsuits, Armstrong could be near broke. The question is: how well did Armstrong protect his money?
“Although Mr. Armstrong has gained his wealth unscrupulously, he may have taken some preventative measures, such as placing vast amounts of wealth in irrevocable trusts. The plaintiffs in the cases against him may get nothing as a result,” states Rocco Beatrice, Managing Director of Estate Street Partners, LLC.
“If Armstrong saw this coming, he may have taken his earnings and, before he had any suits against him, placed them in an irrevocable trust with an independent trustee, and he may be in a very strong position to negotiate with any creditor.”
“I can’t condone his past actions by any means and this is not to condone or encourage people hiding assets or executing asset protection planning to knowingly defraud creditors - especially when gained in such a sinful manner,” explains Mr. Beatrice. “But I believe people should be given a second chance. His admission of guilt could be his form of repentance.”
When a person correctly places assets in an irrevocable trust, they generally don’t own it anymore. If Armstrong doesn’t own assets, someone suing him may not be able to get access to those assets. In some cases, if things are not done correctly or timely, a court can pull this money back into his estate. If done correctly, however, chances are slim that the court will be able to reverse the transfers. At the very least, however, Armstrong may have made it more difficult for a creditor to collect. In the meantime, how will he start over?
Even a fallen celebrity is still a celebrity. Armstrong is still a household name and still has future earning potential. In fact, he probably made some money from his interview with Oprah, either directly or indirectly. “Mr. Armstrong’s wealth is in jeopardy, but there is no reason why his future ability to make a living should be in jeopardy too. The lawsuits can collect from his current estate, but with careful planning and the combination of LLC’s and irrevocable trusts, Mr. Armstrong’s creditors will never be able to collect his newly created wealth earned in the future,” explains Mr. Beatrice.
“Even if Mr. Armstrong didn’t protect his assets the first time, I’m sure he won’t make the same mistake twice,” expounds Mr. Beatrice. “We have a ton of customers who come to us after they lost their shirts, and I always tell them, that they made money once and they can do it again. I also tell them that anyone can make a mistake and end up losing what took them so long to build and then I recommend they start over in a way that can limit losses in the event of a future disaster like Mr. Armstrong’s.”
Using methods of estate planning and asset protection, Armstrong can create a snapshot of the wealth he has now. Then he can effectively separate his new earnings from what he had when the lawsuits started.
He can still protect his assets from lawsuits. He can easily use an LLC and an irrevocable trust to isolate this income and save it for his children. Armstrong will certainly still want to provide for his kids and even his charity work. He can’t do that if there is always a creditor trying to take his earnings from him.
“Mr. Armstrong needs to start fresh. He made his admission and now he needs to leave his stress behind and look to the future. A good solid wealth management plan with a solid irrevocable trust, such as the UltraTrust® will help provide for his family for years to come. It is time for Armstrong to pick himself up and begin again.”
“Haven't we all fallen short of God's glory at some point? Let's see what Mr. Armstrong does with his second chance to a new life.”
About Estate Street Partners (UltraTrust.com):
For 30 years, Estate Street Partners has been helping clients protect assets from frivolous lawsuits while eliminating estate taxes and probate and ensuring superior Medicaid asset protection for both parents and children with their Premium UltraTrust® Irrevocable Trust. Call (888) 938-5872 to learn more.