After the beloved and multi-talented celebrity chef and television sensation, Anthony Bourdain passed away, it didn’t take long before questions regarding his financial legacy arose. Unlike more than half of Americans and other well-known celebrities we’ve lost, Bourdain left behind a will. Now, his estate plan is at center stage and has left some wondering if it will create more problems than it is intended to solve.
Bourdain’s daughter will be a millionairess – but not just yet.
The New York Daily News reported the chef’s estate to be valued at $1.21 million. His estate includes savings cash, brokerage funds as well as personal and intangible properties. In his testamentary trust, Bourdain named his 11-year-old as the primary beneficiary. As a minor, a guardian will need to be appointed to oversee the funds on her behalf. But, while many beneficiaries receive their inheritance upon receiving adulthood, Bourdain’s daughter will have to wait a little longer than most. This is due to Bourdain’s wishes that she receives the funds in staggered distributions.
What are staggered distributions?
His daughter will receive her first distribution from the trust at age 25, the second upon reaching age 30 and the remainder when she celebrates her 35th birthday. Testators choose to include staggered distributions for a variety of reasons. Some want to ensure that the inheritance lasts their beneficiary throughout their lifetime and that they will benefit from it for years to come. They may also want to protect against creditor, marriage, or even substance or alcohol abuse issues that could compromise the inheritance in the future.
The potential pitfalls of withholding inheritance
After the details of Bourdain’s estate plan came to light, some are worried about how the potential drawbacks to staggered distributions could affect his daughter’s life. Depending on the provisions, the language does not allow for the same flexibility as a discretionary trust does. In many discretionary trusts, trustees can make exceptions to staggered distributions to assist with a beneficiary’s health, education, maintenance or support. For example, if a beneficiary was diagnosed with cancer and needed money to receive medical care, a trustee may be able to distribute funds to their discretion. However, this is not always the case with staggered distributions that do not allow for exceptions. In these types of cases, even if a beneficiary finds themselves in desperate need of financial assistance, they cannot use trust funds to do so.
Not all testators consider such drawbacks when creating their estate plans which can leave their beneficiaries in compromising positions. The consequences of overlooking potential problems may not even be realized until years later. However, many are hopeful that Bourdain’s daughter will benefit from the staggered distributions that enable her to live a long and happy life even decades after her father’s passing.