David Bowie’s Creative Estate Planning Helped Preserve Assets, Says Virginia Estate Planning Attorney
Mar 14, 2016
Fairfax, VA (Law Firm Newswire) March 14, 2016 – Legendary pop music icon David Bowie, who recently died at the age of 69 of liver cancer, exercised much creativity concerning his estate planning in an effort to preserve his assets for his family.
It was reported that he experienced financial problems in the 1970s and 80s, almost to the point of bankruptcy. However, in the 90s, he took charge of his finances by selling an interest in his archive of music. Investment banker David Pullman was instrumental in helping Bowie develop “Bowie Bonds,” which permitted him to sell a 10-year investment, which functioned like an annuity, and yielded a fixed rate of return of 7.9 percent. The sale price was $55 million.
Prominent Vienna, Virginia, estate planning attorney Lisa McDevitt states, “It is important for individuals to engage in proper estate planning so as to preserve assets for their families and loved ones, and in a manner that also protects their privacy.”
His royalties and copyrights from the music secured the payouts. Prudential Insurance Company of America bought the Bowie Bonds, and was fully paid off within the 10-year period. This occurred in spite of the change in the music industry caused by Napster and comparable Internet-based distribution, which significantly diminished royalties accessible to performers and songwriters.
In a recent interview concerning the financial creativity that permitted Bowie to realize economic security for the remainder of his life, Pullman stated that Bowie made the arrangements to protect his family, which consists of his wife, Iman, their 15-year-old daughter, Alexandria, and his son from his first marriage, Duncan Jones, who is a film producer. Pullman also revealed that Mr. Bowie was curious about estate planning when he was much younger, and wished to make certain that his assets were transferred to his family. He carried out the Bowie Bonds transaction for the purpose of tax savings, and to ensure that his estate would realize advantages from his music catalogue.
It was reported that Iman Bowie will in all likelihood receive the bulk of Bowie’s estate, which is believed to be approximately $200 million, excluding the predicted rise in sales that will continue in light of Bowie’s death. David Bowie’s children will also receive significant bequests. Considering the accounts about his sophisticated estate planning, David Bowie probably used one or more trusts, which may have increased the value of assets he left to his heirs in a way that reduced estate taxes. In addition, the use of a trust would have allowed his assets to be transferred confidentially, and without a probate proceeding, the details of which are made public.
Learn more at http://www.mcdevittlaw.net
Lisa Lane McDevitt
2155 Bonaventure Drive
Vienna, VA 22181