Jan 28, 2020 The Untimely Death of Kobe Bryant
I don’t think there has been a death that has captured the world’s attention since the tragic car accident of Princess Diana at the age of 36 that comes close to the media coverage of the death of basketball legend Kobe Bryant. I am not writing this blog as a basketball fan in general or as a Los Angeles Laker fan in particular (people know my loyalties lie with the Chicago Bulls), but rather as a U.S. tax accountant.
Kobe Bryant was a young man (41) with a wife and young children. He is survived by his wife and daughters aged 17, 3, and 7 months. Kobe’s estimated net worth was nearly 500 million dollars! While our clientele does not fall into this wealth category, I have had many conversations with young parents who are objectively wealthy. Whether this wealth came from a successful exit, wise investments in real estate or an inheritance from a rich uncle, there are important issues that someone in this situation should be aware of. I will summarize what I believe to be the three most important things that should be addressed.
- Make a Will – I see many people with young children who never sit down to draft a will that would ensure proper economic protection for their surviving spouse and children. This document does not have to be complex but should incorporate your values and plans should you die young.
- Create a Trust – I highly recommend creating a trust when there are children involved. In the event that both parents perish, your wealth should go into a trust that protects the funds and ensures that your children will receive what you believe to be fair and sensible. Inheriting too much wealth as a child or even in one’s 20s can have very unpleasant consequences on development.
- Buy Life Insurance – Young healthy people have access to life insurance at an economical cost. You can structure things in order that the insurance proceeds are not part of your estate and will provide liquidity to your heirs.
All of us hope and pray for good health and long life, but unfortunately, as we have just witnessed by the premature death of Kobe Bryant, we should have a plan in place for the worst scenario. From my decades of experience, I can say that those who follow the three simple steps above may not take away the pain their families will experience from one’s untimely demise, but it will allow them to open a new chapter in their lives more easily.