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Helping You Navigate Complex Legal Issues

Dean Smith's trust offers gift to former players

Gregory A. Lang

As some Minnesota residents may have heard, when Dean Smith, the late college basketball coach, left $200 to about 180 of the players he had coached during his career, the news spread because players posted pictures of the letters and checks on social media. However, if they had not done so, the press would never have known about the gifts because they were distributed through a special estate-planning tool called the revocable trust. In addition to ensuring privacy, revocable trusts provide a buffer against estate taxes, which makes them in states that tax estates upon transfer.

A revocable living trust allows a person flexibility in planning their estate. After creating it, they are free to change their mind at any point and dissolve the trust. If it is left intact, the assets in the trust do not go through probate after the person's death, remaining unfrozen and protected from public view. However, in many cases, a pour-over will is necessary to cover any assets that remain outside the trust.

Trusts tend to be more costly than wills since they involve drafting the trust, the pour-over will and other considerations. The costs can run from $2,000 to $4,000 per person. Trusts also involve ongoing expenses.

An estate attorney may be helpful to a person interested in creating a revocable living trust, because of the legwork involved in determining assets and ensuring that they are placed under the name of the trust during the person's lifetime. An attorney might also help a client decide whether this is the best estate vehicle, depending on the likely value of the estate and other factors.

Source: BloombergBusiness, "Dean Smith's Generosity Got Lots of Press. His Estate Plan Deserves Some Too," Suzanne Woolley, March 27, 2015

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