Leaving a large sum of money to a youthful heir can often create unexpected challenges and difficulties but a case study of what happens to the wealth of some professional athletes could provide insight.
Some professional athletes are often as famous off the field as on but not always for positive reasons especially when they end up broke after their playing days are done. NFL player Clinton Portis is now in the forefront of the notorious cases after filing for bankruptcy despite earning more than $43 million during his career.
Portis owes over a million dollars to a mortgage company. He owes the IRS. He owes a casino. He owes four different women for child support. He owes car dealerships. He claims to have only $150 in his checking account.
USA Today reported this story in an article entitled "Clinton Portis owes nearly $5 million, counts mother as creditor."
There is an estate planning lesson here.
Professional athletes are given large sums of money at a young age and have almost no training in how to handle that money. They fall victim to unscrupulous financial advisors who invest in risky ventures. They live extravagant lifestyles that cannot be maintained when they are no longer receiving a salary.
These are the same things that tend to happen to inherited wealth when the heirs are younger people who also do not have a background in financial management. In fact, the list of heirs who have blown large sums of wealth and ended up with nothing is a lot longer than the list of professional athletes who have done the same.
And, if you are concerned about the managing of wealth, perhaps the advice of an estate planning attorney could help with a plan that protects the assets of the estate until the heirs are capable of managing it.
Reference: USA Today (Dec. 19, 2015) "Clinton Portis owes nearly $5 million, counts mother as creditor."