It’s not over until the last papers are signed, but if the truce between his widow and many children holds, this estate could stand as a planning model for large blended families. Far less complicated estates have taken longer to settle.
Compared to other celebrity estate disasters, the Muhammad Ali estate has been relatively straight-forward, as long as the heavyweight champ’s nine children don’t pull together to battle their stepmother, Ali’s widow. Writing the checks and some venting of personal grievances are the only things outstanding, according to TrustAdvisor in a recent article, “Muhammad Ali Kids Fight Stepmom Over $80 Million Estate Plan.”
Most of Ali’s kids—children of several different mothers—aren’t too friendly with their dad’s widow Yolanda or “Lonnie.” They claim that she tried to isolate Ali as his Parkinson’s disease progressed. Another sore point: the will reportedly gives Lonnie a double share of the estate.
Only the youngest of the kids, Asaad, is on Lonnie’s side. She adopted him as a baby, and they’ve always been close. The other kids resent her, especially since she’s going to get $12 million from the estate … compared to their $6 million apiece.
The kids dislike each other only a bit less, so chances are good that a unified front against stepmom Lonnie will fade. But Ali’s estate plan at least eliminates most of the classic disagreement that drives families apart permanently. All of the Champ’s kids get an equal share, so there’s no favorite and no special treatment.
Yolanda’s double share is much less than it would have been naturally. Ali’s attorneys helped him make some decisions when he was still in his peak earnings cycle.
Ali died in Arizona, where he and Lonnie had lived since 2005. It’s a community property state, so Lonnie could simply claw back half of the money Ali earned since he married her 30 years ago—like the $50 million Ali earned for selling his personal brand and a secondary $2 million rights package he cashed out three years before his death.
Lonnie was Ali’s third wife, and his lawyers insisted she sign a prenuptial contract. However, Ali refused to enforce it. She ended up with the house, the art collection and half of a $2 million bond portfolio. He kept the real estate, so the proceeds from the eventual sale of those assets go to the kids, not Lonnie. They also get their share of his holding companies.
Ali had done a lot of planning over the years with skilled estate planning attorneys who understood how to manage both the legal and personal aspects of a big estate and a complicated blended family. This made all the difference for his family and his legacy.
Living Trusts are not just for the rich and famous. They are a great way to avoid probate, keep your affairs private after death, and provide for your beneficiaries. Please call Legacy Counsellors, P.C. today to schedule an initial consultation about creating your own unique estate plan.
Reference: TrustAdvisor (January 9, 2017) “Muhammad Ali Kids Fight Stepmom Over $80 Million Estate Plan”