Estate Planning
For most individuals, estate planning takes into account income and wealth that will be, or has been, accumulated over many years. This is not the case for professional athletes who often generate substantial wealth in their 20s and 30s with highly lucrative contracts. However, the playing career of a professional athlete is often very short. A MLB baseball player has an average career of approximately 5.6 seasons along with the luxury of a guaranteed contract. In contrast, a NFL football player has an average career of about 3.5 years and a non-guaranteed contract. In the best of cases, careers may last from 10 to 20 years.
This means an extreme emphasis must be placed on preserving and protecting wealth for professional athletes to ensure their money lasts for a very long time. A comprehensive estate plan should allow both lifetime and death goals to be accomplished and pays close attention to the selection of domicile, marital agreements, revocable trusts, wills, benefits of planning with life insurance held through irrevocable life insurance trusts, disability planning, lifetime gifting and leverage transfer strategies, and asset protection.
As part of ETA’s process, an athlete’s personal circumstances are considered together with any existing estate planning. ETA’s attorneys and CPAs either confirm the estate plan fits the needs of the individual and his or her family, or make recommendations to change or enhance the estate plan. Where no estate planning is in existence, the ETA team advises the athlete as to what estate planning tools should be employed to minimize tax and costs as well as meet his/her estate wishes.