Yesterday day, August 23, would have been Kobe Bryant’s 42nd birthday. But tragically, as almost everyone knows, Kobe died suddenly and unexpectedly in a helicopter accident. Kobe’s death underscores why proper estate planning is important. You never know the time and hour when you will pass from this world.
If you have young children it is exceedingly important to have a proper plan in place. Even if you already have a plan, it is equally important to have that plan updated as your life and circumstances change.
In this first “Celebrity Monday” post, I will review Kobe’s estate plan and identify a huge, and costly flaw, which has caused his wife, Vanessa, additional heart ache.
The Kobe Bryant Trust of 2003
Kobe & Vanessa Bryant had four children, Natalia, Gianna, Bianka, and Capri. Tragically, Gianna died with her dad in the helicopter crash leaving Natalia (age 17), Bianka (age 3) and Capri (7-months).
Initially, nothing was known about how Kobe’s $600 million estate would be dispersed. Since his wife, Vanessa, survived him, legally she would inherit his entire estate. But in the months that have passed, we have learned a lot about Kobe’s estate and estate plan.
On March 13, 2020, the trustees of the Kobe Bryant Trust filed a probate petition to modify the terms of the Trust. Usually, the terms of a trust are completely private. The only time the public gets to know about the trust is if something goes wrong and the trustees have to file a probate petition. That is exactly what happened to the Kobe Bryant Trust.
Thanks to this new filing, we now know a great deal about the Kobe Bryant Trust. According to the Petition filed in Los Angeles Superior Court, the Trust was created on April 9, 2003 by Kobe Bryant. The current version of the Kobe Bryant Trust says that on Kobe’s death the estate is split into several shares, which each share going into separate trusts.
Smartly, Kobe updated his trust on a regular basis after the birth of each child. But, sadly Kobe and his attorneys never updated the trust after the birth of his youngest daughter, Capri. Thus, Capri is not a named beneficiary of the Trust and has absolutely zero protection or provision under the terms of the Trust.
According to the Petition, the “material purpose” of the trust was to provide Vanessa and all of the children with lifetime distribution of income. Therefore, the trustees of the Trust are asking a Probate Judge for permission to amend the Trust to name Capri as a beneficiary of the Trust.
Three Lessons from the Kobe Bryant Trust
So, what can we learn from Kobe’s estate? First, I really admire Kobe for having his act together and the foresight back in 2003 to create an extensive estate plan. Second, Kobe’s estate plan also demonstrates why it is important to revisit the terms of an estate plan to account for changes in life circumstances.
It is clear that Kobe took great care to amend the trust while he was living to account for changes in his life. For example, the trust was amended to include each child as named beneficiaries. But Kobe died before he could amend his Trust to include his newest daughter, Capri.
Which brings us to the third lesson we can learn: don’t wait. Our time on this earth is never guaranteed. We never know when an accident may happen, or an illness may arise. We all (myself included) need to act diligently to care for our loved ones so that if we pass unexpectedly they are not forced to confront the added pain of a probate lawsuit.
Kobe’s Story is Not Unusual . . . It is Typical
As an estate planning attorney, I see this kind of thing happen all the time. In fact, one of the most common estate planning mistakes (aside from failing to plan in the first place) is failing to update an estate plan. I get calls all the time from the loved ones of someone who has died or become incapacitated with an estate plan or living trust that no longer works because it hasn’t been updated. Unfortunately, waiting for incapacity or death is too late and the estate’s fate will be sealed by a probate judge and probate court.
We recommend you review your plan annually to make sure it’s up to date, and immediately modify your plan following events like births, deaths, divorce, and inheritances. Atlantis Law has built-in systems and processes to ensure your plan is always up to date, so you won’t need to worry about forgetting anything. For example, all of our estate plans come with FREE triennial reviews just to make sure everything is still in place and working as it should.
Keeping an Inventory of Assets Is Also a Best Practice
When someone dies all of their property is inventoried. If the person died with a trust, the assets are inventoried by the trustee. If a person died with a will or without a will, the assets are inventories by a court-appointed representative. Of course whoever inventories the assets after death can only do so if they know what assets the person had.
Thus, if assets go unclaimed after someone died, they go to the California Department of Unclaimed Property. There is over $9 billion (With a “B”) of unclaimed property held by the California Department of Unclaimed Property.
At Atlantis Law we encourage all of our clients and potential clients to create—and regularly update—an inventory of all their assets, including digital assets like cryptocurrency, photos, videos, computer passwords, music libraries, and social media accounts. By doing this, your family will know what you have and how to find everything if something happens to you. More importantly, none of your assets will end up in the California Department of Unclaimed Property.
We not only help you create a comprehensive asset inventory, we also make sure it stays regularly updated throughout your lifetime. And with the COVID-19 pandemic still raging, creating such an inventory is something you should take care of immediately.
As Kobe’s sad story illustrates, death and illness can strike at any time, and even the most extensive estate plan can fail without the proper systems in place to keep it updated. To ensure your plan works exactly as intended for the ones you love most, contact us, as your Family Legacy Lawyer, today to review and update your current plan, or create one if you have yet to do so.
This article is a service of Atlantis Law. We believe that your legacy is not about what you have, it is about who you love, what you love, and what you believe. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love.