Why Did Burt Reynolds Create a Trust for His Son?
Burt Reynolds died unexpectedly, but he did leave a will, drafted seven years prior. Reynolds intentionally left his son, Quinton, out of the will, stating that he had provided for Quinton during his lifetime with a Declaration of Trust. Reynolds' niece, Nancy Lee Brown Hess, is the personal representative of Reynolds' estate. Why would Burt Reynolds intentionally leave his son out of his will, and instead, provide for him with a trust? Three good reasons are taxes, probate, and financial management.
Trusts Are Not Taxable
As the old saying goes, the only two things that are unavoidable are death and taxes. Or are they? Estate taxes can be avoided through an irrevocable trust. Currently, the first $5.6 million of an individual's estate is not taxed. If assets are left in trust, they are no longer part of the taxable estate, and therefore do not fall under the $5.6 million exemption.
Reynolds' estate was estimated at $5 million, so it is likely that there would have been no, or very little, tax on the estate. However, the will was written in 2011, when the gift tax exemption was lower. Also, he may have thought at the time there would have been much more value in his estate.
Trusts Avoid the Publicity and Delay of Probate
All estates left to be divided through a will, rather than a trust, must go through the Probate Courts. This is a long, drawn out, public process. If Reynolds wanted to protect the privacy of the assets in his estate, they are best given to a beneficiary through a private trust.
Also, if he wanted to make sure his son didn't have to wait a few years to have the Probate Courts in every jurisdiction in which he owned property complete the probate process, that might have been another reason to leave assets to his son in a trust, rather than in a will.
Trusts Create a Built-In Financial Manager
Generally, when assets are in a trust, there is a trustee that serves as the financial gatekeeper of the estate. That trustee holds the assets "in trust" for the beneficiary so that the beneficiary cannot spend them any old way desired. Rather, with a trust, assets are usually trickled out, according to the desires of the grantor. The trustee serves as the financial manager of the trust, for the benefit of the trust and the beneficiary, but not for the benefit of the trustee.
In this case, we know that Reynolds' niece is the personal representative of the estate. We don't know if she is the trustee, or if a financial professional is the trustee. We also know that Reynolds made a lot of money during his lifetime, and spent a lot, almost too much, of it. He declared bankruptcy in 2004, and according to an interview he gave Vanity Fair in 2015, he knew poor financial management had been part of his demise.
"I've lost more money than is possible because I just haven't watched it," Reynolds told Vanity Fair in 2015. "I've still done well in terms of owning property and things like that. But I haven't been somebody who's been smart about his money." Reynolds probably wanted to give the gift of a trust to his son in order to better provide for his long-term future.
Trusts are a fantastic and often misunderstood financial estate planning tool. If you would like to learn more about wills and trusts, contact a local estate planning attorney, who can review your estate and offer you great advice on how to best go about having your financial wishes carried our for your chosen beneficiaries.
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